Do Contrarian Strategies Work Within Industries?

Journal of Investing Abstracts, Fall 1997

Posted: 17 Apr 1998  

David N. Dreman

Dreman Value Management, LLC

Eric A. Lufkin

Dreman Value Advisors

Abstract

Here is a different tack on the study of contrarian stocks. It attempts to cut across the traditional line of value and growth measures by analyzing the performance of favored and less attractive stocks within an industry (a relative rather than absolute value approach). The findings indicate that there is a regular mispricing of growth and value stocks within industries themselves. There is also evidence that relative value accounts for some variation in returns that absolute value does not. The results shown are consistent with mispricing, which is difficult to reconcile with risk-based explanations of contrarian effects.

JEL Classification: G12

Suggested Citation

Dreman, David N. and Lufkin, Eric A., Do Contrarian Strategies Work Within Industries?. Journal of Investing Abstracts, Fall 1997. Available at SSRN: https://ssrn.com/abstract=76708

David N. Dreman (Contact Author)

Dreman Value Management, LLC ( email )

Harborside Financial Center
Plaza 10, Suite 800
Jersey City, NJ 07311-4037
United States

Eric A. Lufkin

Dreman Value Advisors

Harborside Financial Center
Plaza 10, Suite 800
Jersey City, NJ 07311-4037
United States

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