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David Dreman: Bad Times Ahead?

April 09, 2007 | About:
10qk

Was it only two months ago that market conditions couldn't have looked better? The Dow Jones industrial average ran to new peak after new peak, accompanied by five-year highs for the S&P 500 and the Nasdaq. Then whammo, all three indexes were staggered following the Shanghai exchange's 9% plunge in late February. Huge selloffs rocked Asian and European markets, as well.

Many gurus have called this simply a blip, an overdue correction in a market destined to move strongly higher. And indeed, starting in March stocks regained some of their lost ground. So should you be nervous or not?

Buy: BAC,WB, and VSE

Read the complete commentary


Rating: 2.7/5 (3 votes)

Comments

dowalker1
Dowalker1 - 7 years ago
At first blush there's a real cause for concern. The nasty hit the subprime market took in March has continued, and the damage is frightening. Several subprime lenders, such as New Century, NovaStar and Accredited Home Lenders (nasdaq: LEND - news - people ), are down 80% or more from their highs. Their loose underwriting standards suggest that more rot exists at these lenders than we know about. Investment and commercial banks have shut many of the subprime lenders off from fresh capital, which makes their survival questionable.

Why is David Dreman putting NFI in same line as LEND adn NEW, one can not file 10k and their auditors quit and the other bankrupt, while NFI filed a 10k on time 3.1 and received a non qualified opinion clean that is from Deloitte Touche. Has a 16.4 billion portfolio which should toss off 200m in cash + 50M from their Service Opns + cash on hand of 200m + 100m line from Wachovia one of Dreman picks. WHY
kfh227
Kfh227 premium member - 7 years ago
I was reading about BAC and felt this article is worth a bump. Go read about some of hte financials that are getting dragged down with subprime worries even though their exposure is limited or non-existent.

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