- My Dreman screen managed a total return of 39 per cent over the last 12 months compared with 22 per cent from the FTSE All-Share
- The long-term eight-year record is more patchy at 86 per cent versus 58 per cent
- Covid has broken the screen and aspects of my fix are dubious based on Dreman’s investment techniques
- The amended screen highlights six deep-value shares including one offering a 5 per cent shareholder yield and some growth prospects
My screen based on the approach of famous American, deep-value, contrarian investor David Dreman just is not working this year. The likely cause of this is that it seeks to identify companies that both have cheap shares and show strength based on their recent financial performance. The type of companies that tend to have cheap shares are also the type that were severely hit by Covid. My Dreman-inspired screen has not highlighted a single company this year.
My solution to the problem has been to screen against forecasts this year instead of historical results.