June 13 (Bloomberg) -- Scott Rothbort, president of Lakeview Asset Management, comments on the outlook for Lehman Brothers Holdings Inc. and the financial industry.

He spoke in an interview from Millburn, New Jersey.

On the financial industry's difficulties:

``It's been like Chinese water torture, really, for a lot of people, because everyone's been saying enough is enough already. We think that we're at a bottom'' and ``think that perhaps these companies have written off enough.

``Personally, I think that at some point, we're going to see some write-ups, rather than writedowns. But until we hear from one of the major financial institutions, a bank or an investment bank who says, `The writedowns are over, we're very happy with our capital, we don't have to raise any more capital,' I think that we're going to continue to see a lot of these companies under pressure.

``Unfortunately, most of this pressure is in the form of rumors, rather than real news,'' and ``that's what's really hit Lehman this week.

``It was rumor upon rumor upon rumor, which kept pummeling the stock and then taking down along with it the rest of the financial-institution stock prices. And at the end of the day, that rumor really has not turned into reality, with the exception perhaps of Erin Callan being fired, or being replaced.

``And now, we're going to be turning to next week, when companies like Lehman Brothers and Goldman Sachs, a stock which we own, are going to be reporting their quarterly earnings.''

On investing in Lehman now:

``That's been the $64,000 question. That has been very, very tough. I don't think Lehman Brothers is going under. I can't really value the company, but certainly, it looks like it's very washed out. If you're going to dip your toe into some of these companies, whether it's Lehman or it's Citigroup, I think you've got to do it very gingerly. You buy a little position and you play it with stops, so that if the stock does come off another 3 or 5 percent, you really take yourself out. If you buy a little bit right now and the stock starts to run, well, then, you can add to it.

``Eventually, that'll pay off because eventually what will happen is we know these stocks will improve, that the outlook for the economy will improve, that the mortgage crisis will be behind us.''

To contact the reporters on this story: Ken Prewitt in New York kprewitt@bloomberg.net; Julie Vaughn in New York at jvonwettberg@bloomberg.net.

Last Updated: June 13, 2008 11:23 EDT