Citigroup (C)

[Dee]

this restructuring within citgroup/ old lane hedge fund, is this going to be good for citigroup's stock or bad?

[Airelon]

That's the billion dollar question. I never try to predict whether a particular move will be profitable or not. Especially single news items. A single bit of news may, or may not affect a stock for just a few ticks. The real question becomes the long term health. Which is all about earnings.

[Fredledingue]

The most boring with financials is that you are flooded with irrelevant news and sorting out the important events is a royal pain.

I would rate C as "hold" or "moderate buy".
The sector will be tough for another one or two quarters but I think C and the likes are near the bottom. I don'tsee the largest bankin the world still losing value as dramaticaly.


HTH

[Airelon]

Indeed.

I've thought about buying up some C.

But it would violate a huge rule I have when it comes to investing. Which is: "Never invest for the long term with a company, when the entire sector is in the midst of a crisis." To my mind, investing when the whole sector is in trouble, would be like investing in a Brewer at the end of 1919. The trick is to determine when the crisis is over, and buying into a 'Brewer' in 1932. Unfortunately, the transparency isn't quite there yet, where I'm entirely comfortable buying some C.

Now mind you, sometimes I ignore my rules. And at times it's worked out profitably. I bought FRO a year or two ago now, when it was at $31.00. Worked out great. Violated my rule of "Dividend Invest only with companies that have a proven track record of paying dividends". I set that rule aside, because I believed in the management team.

The other trick, is my set of Investing Rules are my rules, because they work. Setting them aside means I'm getting awfully speculative, which many times I'm not comfortable with.

I guess it all comes down to risk tolerance. I'd watch C very carefully before putting anything down, and even then, I'd probably only give them about 1% of my overall capital as an 'initial' buy, just to see how it pans out. And only if it reached $27.00. That way, you're letting market action confirm the buy.

[Fredledingue]

Yes, I would not buy C at the moment. Under $30 it can be a speculative buy, $27 seems a better entry point to me too. It's near half its value before the crisis (a value once relatively stable) and when a stock fell 50% there is much less downside risk.

BAC seems much more attractive to e due to historical valuation and prospect.
MS (which I still own) is also better positioned for a quick recovery of their busness but IMO, that's already factored in in the share price. Too expensive to play with.
C may have more skeleton in the closet and poised for a long term decline and asset sales.

I didn't follow much other banks.

[Novice Investing]

Hmm... I think the banking sector has improved as of late, no? Fed is done with cutting the rates and it is not working. Hence, it now resolves in using its power to give short-term loans to the bank. This gives them a breathing room. Yes, housing will be bad for quite a while. This is the big question mark. How low will price fall this year? If price only falls modestly, then most banks has already written that off.

Of course shares like C has risen from its low of the $ 18s. I personally haven't bought C but have a gut feeling that now it is the time to buy this banks before they go back up. I would say, buy on weakness.