Next thing to share

Next  I will share on what I read about David Dreman,


now let's talk about David Dreman strategy,
actually after I read about it,
I found that most of them are investing and value and ensure that there didn't invest in overvalued stocks
so, according to Dreman, he uses his strategy which called as Contrarion Strategy which about differentiation and doing things differently compare to what others do.

There is one chinese book I read, he mentioned about this too and called as clock that go the other way round which is moving in anticlockwise saying the same thing which have to act differently compare to other people.

So, what mean by act differently with others?
Normally people will buy the company shares when the stock is in favor and purchased by people around and cause the company share price went up very high all because of overreaction of people.
Therefore, Dreman mentioned that is better for us to buy stock with share price undervalued which has a higher opportunity to gain capital gain in terms of raising in share price in the future.

Therefore, these are the requirements that stated in Dreman
1) P/E ratio (Price to Earnings), P/C ratio (Price to Cash), P/B ratio (Price to Book Value) & P/D ratio
    (Price to Dividend Payout) must be lower than 20%.
2) Company with market capital of top 1500 companies, which show improvements.

3) Earnings Trend EPS of Quarter 1 must be more then EPS of Quarter 2.
     Based on this point I agree what my girl told me, is because Dreman looking for low price share which
     didn't overvalued therefore if the company EPS keep growing everyone will purchase the company
     share and cause the company share price overvalued.

4) EPS must growth better than the country market indices. For e.g. US=Dow Jones, NASDAQ & S&P
    500, Malaysia = KLCI

5) Company current ratio must be more than 2.

6) Dividend payout must be lower in the pass so that company able to pay higher dividend in the future.

7) Return on Equity (ROE) must be more than 27%

8) Pretax profit margin which is pretax profit/sales must be more than 22%
9) The return must more than the market indices at least 1%

10) The Debt/Equity ratio must be 0 will be better. 

John P. Reese with Jack M. Forehand,CFA,2009,The Guru Investor, How to Beat The Market Using History Best Investment Strategies,Hoboken,New Jersey,John Wiley & Sons.Inc

Based on what I read, I found that more of the great investor who using value investing very focus on the company book value, which is the main part, if the company book value is less than the current share price therefore it's not a good choice to invest in it.

Other than that, focus on company assets, has low liabilities, able to generate more dividend increase shareholder maximization of profits.

These are all about my own thinking. If there is any other more sharing do drop by some comments to strengthen my points. Thank you.

Happy always.