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Dreman: Terrified of Bonds, Stick to Stocks

By    |   Wednesday, 01 Jul 2009 10:04 AM

David Dreman, the contrarian investor, says he’s avoiding bonds and sticking with stocks and real estate because he is "terrified” of bonds, Reuters reported.

"I think we’re going to have some of the worst inflation, with all the printing presses around the world running 24/7,” Dreman said.

"Probably the two worst investments over the past two, three years have been stocks and real estate. They could be the best investments two or three years out.”

Dreman recommended purchasing stocks, but said he will not invest in U.S. Treasuries, corporate bonds or TIPS (Treasury Inflation-Protected Securities).

"I'm terrified of bonds," said Dreman, the chief investment officer at Dreman Value Management. "People are starting to worry about inflation.’’

Although he predicted the recession is almost over, the banking issues won’t disappear soon, he said.

"I think we came off a bottom, but it's probably going to take a couple of years before we get out of this, or have the banking problem solved," Dreman said. "That's still what we're working through and what's being done."

Alan Greenspan, the former Federal Reserve Board chairman, said in a Financial Times editorial that he is a fan of buying stocks.

"I recognize that I accord a much larger economic role to equity prices than is the conventional wisdom," he said.

"From my perspective, they are not merely an important leading indicator of global business activity, but a major contributor to that activity, operating primarily through balance sheets. My hypothesis will be tested in the year ahead. If shares fall back to their early spring lows or worse, I would expect the ‘green shoots’ spotted in recent weeks to wither."

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David Dreman, the contrarian investor, says he’s avoiding bonds and sticking with stocks and real estate because he is "terrified” of bonds, Reuters reported. "I think we’re going to have some of the worst inflation, with all the printing presses around the world running...
david,dreman
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2009-04-01
Wednesday, 01 Jul 2009 10:04 AM
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