Phil Anthropy

Pick Up Undervalued Financials - Barron's Interview

The only question is where the bottom will come. As a practical matter, the U.S. and the rest of the world cannot permit major financial institutions to go into Chapter 11. It would disturb the sacred cash cow. Therefore, the financials will indeed improve over the next few years, and probably very well, but I think it is important to take a cautious approach to putting on a position. I have tried unsuccessfully on several occasions recently to catch a bottom in Citigroup (C), and have taken losses in the process (could have been worse, but wasn't fun). The Cramer strategy of putting on 25% and then adding in increments (dollar cost averaging down, essentially) as the stock falls is one method. Another is to use technical indicators and charts to try and hit the bottom with precision, and then put in most of the marbles at that point, in hope of a rapid rally early next year. It is clear that tax loss selling will weigh on the financials throughout December. However, if they don't trend upwards in early January, then there is cause for concern that the recovery may take a long time, in which case there could be other investments with better returns and less risk.