I could have spent a few pages extolling the virtues of David Dreman and his book, Contrarian Investment Strategies: The Next Generation. Fortunately for you, I did not do that. Instead, I tell you simply to buy the book. It deserves a spot on your library shelf adjacent to Ben Graham’s Intelligent Investor. It is one of the most important investment books you will read. In the book, Dreman discusses at length the problems with estimating future earnings and psychological impediments to effective investing. He also lays out the key reasons why value investing works so well and he gives much data that support his arguments. Much of the data in my forthcoming article on regression to the mean is taken from this book.