Why Citigroup

Citigroup is  a stock widely loved by both professional and retail investors. I have read countless positive recommendations on Citigroup in the past year and cannot remember reading anything negative. Retail sentiment can be summed up in something that an acquaintance said to me: "If I had any money to invest I would buy Citigroup because it has to be worth more than $3".

It is very possible that everybody is right about Citigroup. But as long as the government is in the market selling shares every day I see no reason to buy. Talk to me when they are done or almost done.

1 comment:

Anonymous said...

I cannot for the life of me understand why John Paulson and other intelligent people would go long Citi. If its books were opened up and its assets marked to their true values, it would almost certainly have a profoundly negative book value. It might be able to earn its way out of the hole by the year 2100, but why not invest in businesses with clean balance sheets that actually make money? Citi seems not to be able to generate even the simulacrum of strong returns except through absurd leverage and insane risk-taking. So I guess I need to go buy myself some C stock.