There's no doubt that there's some serious blood in the water when it comes to the financial sector. Bank of America (NYSE:BAC) is down 23% over the past year, Morgan Stanley (NYSE:MS) has lost 35%, the behemoth Citigroup (NYSE:C) has been darn near cut in half, and Washington Mutual (NYSE:WM) ... let's just say that things are grim at WaMu.

Blood continues to spill, too. No doubt there are more big writedowns yet to come to light, and the scramble that banks will have to make to stay well-capitalized will put even more pressure on the stocks. Yesterday, a Goldman Sachs analyst suggested that Citigroup may have to slash its dividend by as much as 40% to cope with the writedowns on the horizon.

As the water continues to turn a deeper shade of crimson, though, there are signs that some investing sharks think it may be safe to start feeding. The biggest moves recently have come from Davis Selected Advisors -- a great white when it comes to value-investing sharks. Early this week, Merrill Lynch (NYSE:MER) announced that, together with Singapore's Temasek Holdings, Davis would be pumping some fresh blood into the struggling investment bank, to the tune of $5.6 billion -- with the potential for it to grow to $6.2 billion. Davis followed that up with the disclosure that it had boosted its stake in bond insurer MBIA (NYSE:MBI) to 5.1%.

Of course, if these stocks are good deals, then it's news to CAPS players. Both MBIA and Merrill Lynch carry lowly one-star ratings on CAPS. Furthermore, some investors, like CAPS All-Star lowellfield, thought the market got a bit too excited about the MBIA news. He noted that this was "just open market buying" that doesn't help MBIA at all and thought that the news didn't "[justify] a 10% move."

Do you think there's more to be bullish about? Or will these stocks continue to be dogs? Click over to CAPS and let the community know what you think.

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