Did I miss Citi
Did I miss the boat on Citi. It seems so expensive to buy right now even though I believe it is headed higher. There is just so much risk with this company. Here’s why I believe it’s headed higher and why I should buy but won’t until it comes back some.
1. Uptick talk – a committee is meeting, with suggestions from financial guys, to determine the best way to deal with the short selling frenzy. I think Citi has been a real target of short sellers. If the uptick rule is put back in effect or something similar that keeps short sellers from “picking on stocks” then Citigroup might get some more breathing room.
2. Reverse stock split – There’s been talk of reducing the number of shares to send the stock price higher. This might allow more blue blood institutions to own Citigroup again.
3. Economy – The economy is going to get better at some point. The stock will appreciate by virtue of that.
4. Earnings – Looks like this bet is already driving the stock. People are buying on the hope Citigroup earnings are as good as Wells Fargo and Goldman.
5. Bailout – I just don’t personally believe the government will let banks fail. I just don’t think the American public would handle that very well. It’s just a guess. Some articles out there make a compelling argument for the government allowing C to fail or be nationalized. I just don’t think the news of that would go over well…at all.
Bottom line…I’m nervous I’ve missed Citi or will be buying at the top. We are so far from out of the woods I just don’t want to gamble right now. Our government is taking stabs in the dark with billions of dollars and helping anyone who did the wrong thing. Those of us who have managed to stay afloat, pay are bills, etc. are asked to just keep our heads down and work.
We’ll see.
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