Don't Lament In a Couple of Years How You Should've Bought Financials...

| About: Citigroup Inc. (C)

Why do they get what we refuse to?

The WSJ reported Thursday:

Merrill (MER) is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund. Citi (NYSE:C) could get as much as $10 billion, likely all from foreign governments.

One possible source for fresh capital for Citigroup could be the Government of Singapore Investment Corp., or GIC. Mr. Pandit already has a relationship with the fund, which was one of the original investors in Old Lane Partners, a hedge fund that he co-founded and that Citigroup bought last year.
Earlier in the month I commented after the last round of funding:

When you are not at the vortex of the panic, it is far easier to see through to the the other side of it. Eastern investors are placing massive bets on US banks and financial services firms while US investors are running scared from them. The reason? My guess is that these foreign firms see the international operations of a Citigroup and recognize they are still earning money in their other areas of operations and that the US housing issue is a temporary one.

Personally, I am hesitant to commit more money into the sector before earnings come out the next two weeks. Before you comment that I am not taking my own advice, I do have about 55% of my personal portfolio in the financial sector now. I do want to pick up more, and most likely will once I get clarity after the next two weeks. There are plenty of them to pick from that are great operations trading at painfully low valuations to their book value with yields, based on cash flows that are safe and around 6% to 7%.

I think a couple years from now there are going to be a whole lot of folks out there lamenting "I wish I bought financials back then."

Disclosure: Long Citi, None in others.