Companies are Lugging through Foreclosures, Resetting and Re-chalking their Loan Programmes

There is nothing new to the fact that banking is all about getting proceeds on your own dollars and of your own dollars. David Ellison of FBR Equity Funds recalls it being dinned in at the beginning of his career. He said, “It’s probably one of the things that’s most important to remember. And now we’re all working on the ‘of ’part and it’s not working out so well.”

From 1985 Ellison has been specializing in stocks (financial) and is now attached to FBR Small Cap Financial Fund and FBR Large Cap Financial Fund. He commented that the banks are still suffering for having lowered their lending levels during the years of the boom in the housing sector. Recently he discussed his views with The Associated Press.

There are both positive and negative indications coming through regarding economic recovery. Ellison thought that from a bird’s eye view there are things both good and bad. At present the bad seems to dominate because the going up rate of the economy has somewhat slowed down.

The housing sale had gone up but then leveled off. It was the same with car sales. But unemployment has not improved. Thus the improvement currently can hardly be noticed. If one looks at the firms, talks to their representatives then one will see how much work is going on. They are lugging through foreclosure, resetting and re-chalking out the loan programmes.

If the level of the economic health remains at this level and does not worsen, then the position of the firms will improve because the healing process has already started.

The average investor should keep his eyes and ears open taking in what the public is saying. At times this is necessary. Then one should watch what is being done. Only by listening one gets an impression of doom but looking at the work being done the impression alters.

The best thing would be for investors to locate an experienced manager with a proven record and then to stick with that person. It is not prudent to buy one stock and then two more. The approach should be to give the group a hug. There are innumerable mistakes and various kinds of loans that are not good. The regulators too are trying to make dollars while the economy is on a recovery path – however timid.

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