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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (41257)	12/28/1998 10:55:00 PM
From: Skeeter Bug	Respond to of 132070

>>Putting contrarian theory to the test What exactly is a contrarian investor? Morningstar's Kevin McDevitt delves into the subject at Morningstar.net's Stock Analyst Journal and he's not so sure most investors would have the stomach for the pure contrarian approach. (maybe we like da flamer boys and girls ;-) McDevitt is using the principles of contrarian fund manger David Dreman of the Kemper-Dreman High Return Equity Fund (KDHAX) to put the theory to the test. He says Dreman's method is based on simplicity. He buys the cheapest blue chip stocks without worrying too much about forecasting earnings. (how much is this guy pulling to use all this high tech research to "manage" his fund?) In fact, McDevitt says Dreman thinks more information can sometimes lead to worse decisions. (weeee brain disease, maybe? ;-) McDevitt put together a list of candidates based on price/earnings multiples. The names that came up look scary. Farm equipment manufacturer Case (CSE) has lost 67 percent this year. Oil services firm Tidewater (TDW) has dropped 60 percent. Liz Claiborne (LIZ) is closing stores in the wake of poor sales and falling overseas demand. But McDevitt says buying companies like these is the very spirit of contrarian investing. (sissy contrarianism requiring no brain power) Will they beat the S&P 500 next year? McDevitt plans to follow the portfolio for a year, but points out Dreman himself has topped the S&P benchmark by an annualized one percentage point over the past 10 years. (hey, he's better than most of these portfolio managers ;-)