Would you buy this fund Citigroup (C-symbol) Fund???

[abumhira]

I am thinking of jumping into that Financial bandwagon band.....even right now most banks have taken a huge bit down....

[humandraydel]

Are you referring to the ticker symbol "C"? That isn't a fund, it's the stock of a single company: Citigroup. Single stocks are a lot more risky than a mutual fund, but they can have their place in a well diversified portfolio. However, if you are confused in thinking that C is a fund, you probably shouldn't be buying individual stocks.

[abumhira]

Well I meant to say Citigroup stock... (C symbol)

[Broken Arrow]

Sorry guy (or is that gal?). I had posted something about it, but I'm going to take it back because I still don't know where you're going with all these stock questions. I don't like retracting in general so, again, my apologies.

[disneysteve]

abumhira - I have to agree with Broken Arrow. You are posting this series of question of what to buy but you aren't giving us any info with which to answer the question. How old are you? Are you talking about retirement accounts or taxable accounts? What does your current portfolio look like? Do you have any debt? What type of plan does your employer offer?

You can't just ask, "Would you buy this stock?" and expect any worthwhile answers. Just because I would or wouldn't buy a particular stock or invest in a particular fund has no bearing on whether or not it is an appropriate investment for you.

[sweeps]

I would buy Citigroup -- along with thousands of other stocks -- in a diversified stock index fund.

[toboramai]

Citigroup Inc. Chief Executive Officer Vikram Pandit faces an ``impossible feat'' in turning around the biggest U.S. bank as it faces ``seismic'' costs to restructure, Oppenheimer & Co. analyst Meredith Whitney said.

Citigroup will be forced to announce the sale of major businesses toward the end of this year or in early 2009, Whitney, who recommends investors sell the shares, said in a Bloomberg TV interview today. One of the units could be Banamex, the company's Mexican branch, she said.

Whitney, 38, correctly predicted on Oct. 31 that New York- based Citigroup would cut its dividend to shore up capital after mortgage-related writedowns. Pandit on May 9 outlined plans to sell $400 billion in assets at the bank, which has booked more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year.

``I think it's an impossible feat,'' Whitney said. ``They don't have the revenue power, they don't have the earnings power in so many of their businesses. Even Stephen Hawking could not pull this off,'' she said, referring to the British physicist.

Whitney said she expects Citigroup, which lost a record $10 billion in the fourth quarter, to post ``de minimis'' profit during the next three to five years. She repeated her prediction that Pandit would be forced to lower the dividend again, and didn't give an estimate for restructuring costs. She estimated a loss this year of 45 cents a share.

I cannot link because I do not meet the 15 post requirement but the quote is from bloomberg article.

Do not buy Citi and tread lightly with any other financial stock. If you do not understand the current financial crisis, you should not be speculating on financial stocks.

[Broken Arrow]

Originally Posted by toboramai

I cannot link because I do not meet the 15 post requirement but the quote is from bloomberg article.

Do not buy Citi and tread lightly with any other financial stock. If you do not understand the current financial crisis, you should not be speculating on financial stocks.

Aye, I read that dire editorial, and I can agree with your warning as well.

As I had mentioned and then retracted earlier, this was the result of last week's federal mandate for full disclosure of the subprime exposure. Citigroup's exposure is huge, to be sure. However, at least they are all in the open now, and to his credit, Pandit is also taking some very drastic measures to shore up the impending losses.

So, what it means to me anyway, is that Citigroup remains... not necessarily a buy for others. That you will have to determine for yourself... but a hold for me. Because we are seeing what should hopefully be the worst of it.

I don't know if Citigroup will recover to its original size and shape. I don't know if it should. But what it should do, at least it's doing it now.

[toboramai]

Take it for what it is worth but the announcement that Citi was going to sell 'non-core' assets was the last straw for me and shouted that it was still significantly capital impaired and now forced to sell assets to remain solvent.

If you look at the financial statements of these banking institutions, they have significantly increased their level 3 assets. This in itself is not bad but a dire warning that they are fudging on the valuation of their assets until the value either rise or they are able to raise more capital.


Search google for 'naked capitalism' and the first listing is a good economic \ financial blog that recently discussed the Citi situation.

[Broken Arrow]

Yeah, again, I agree with the bearish stance on Citi.

The truth is, CDO in and of itself has been a very difficult entity to valuate. So, what Citi (and many other banks in this situation) have done is feed the public with their best case estimate.

That is, until last week, where by federal mandate, the banking industry had to disclose exactly how much subprime they are exposed to PRIOR to estimates.

And of course, when people saw the numbers in its entirety, they practically ran for the hills. And ALTHOUGH the entire subprime exposure COULD be considered as a total loss, that may or may not be the case still. Again, when it comes down to it, nobody knows for sure.

And again, this is why I am standing firm with my hold. The exposure disclosure represents the worst case scenario. People think it's a total loss, and I can't blame anyone for thinking that way. However, because it also represents the worst case scenario... I THINK (and I could be wrong) that this also the worst of it for Citi.

Which for a ballsy contrarian, is exactly the kind of entry you want into a buy. That is, assuming that you believe their non-core assets is enough to cover their entire subprime exposure AND that their core banking business is still stable and sound. Which I do, and hence my hold.

One thing is for sure though. Citi isn't for the faint of heart right about now.

[Brokemofo]

I work for Citi, and tomorrow is my last day as they are closing my whole division completely. As much as I hate Citi right now I will admit the company will bounce back. They are taking pretty drastic measures to make it happen. I say now is not really a bad time to buy Citi stock as it will likely go up in the long run.

[Broken Arrow]

Originally Posted by Brokemofo

I work for Citi, and tomorrow is my last day as they are closing my whole division completely. As much as I hate Citi right now I will admit the company will bounce back. They are taking pretty drastic measures to make it happen. I say now is not really a bad time to buy Citi stock as it will likely go up in the long run.

I'm very sorry to hear that. It's one thing to talk about a stock, but it's another to talk about a man's livelihood.

I too hope that your career will bounce back, better than ever.

[JBinKC]

If I were to bottom fish for a financial stock I would be more apt to pick a regional bank where the real estate market is not depreciating but do you have the ability to know all of the variables in your decision?

I am not the type to follow the herd but that is why MA and V has done so well in this market. Those companies are not subject to credit risk.

The stocks in the pawn shop industry has corrected some on rumors of detrimental legislation in some jurisdictions. I would be more apt to take my chances on a company that has a loan that is well secured by an undervalued asset than one that is in many cases the loan is valued much higher than the asset.