Thomas Jefferson once said that banks are more dangerous than standing armies. Certainly with Chairman Alan Greenspan at the helm of the Federal Reserve this was the case. Under his leadership the Fed was instrumental in creating two bubbles. The dot-com bubble of 1995--99 was followed by a grand loosening of credit that resulted in a second bubble, the housing mania of 2001--05. Still, when a bubble implodes there are always good opportunities for folks who have the courage to take risks.
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For all my recommendations in this column, I advise acquiring positions gradually. Who knows how close we are to the bottom of this very jumpy market? Still, those who buy bank stocks should be well rewarded over the next couple of years.
Direct Link - David Dreman : Seize The Day.
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