Yogidad

Citigroup: A Simple Analysis of a Terribly Complex Company

Terence - I like your decision to argue that owner's should hold while others should refrain from buying C. Your instincts were correct. First: Many people holding C will realize losses or gains if they changed position. Given the dubious nature of valuation (which you concede) it may not be worthwhile to transverse the ramifications of a change in position. Second: Johnsond's comment ignores a fact of investing - especially for individual investors. Choosing to purchase a stock begins a long-term relationship that will take up your time in the future. You have now chosen to watch that stock specifically and research and read as much background as you can. Once again, given the unique factors in valuing C, one must take special note of the unique factors affecting the values, and despite the outcome of your C valuuation, it may be wise to move to stocks that don't have the valuation difficulties. I vote a strong yes on your instincts.


On Sep 04 11:57 PM Terence Chow wrote:

> Hi Johnsond,
>
> You make a very good point. Holding stock or cash should be irrelevant
> to an investment decision as you should simply move your money to
> the best return per risk investment you can find.
>
> My only caveat is that I find it odd to advise selling something
> undervalued. I'd rather wait for it to be fairly valued before I
> suggest selling it.
>
> If you are in cash however, I would suggest looking for a better
> reward/risk investment because I believe a better relationship exists
> than Citigroup at this moment.
>
> These are the reasons I have a different stance on what to do if
> you own the stock or not.
>
> However your point is still very strong and I am definitely thinking
> about changing my stance. The final argument I would have against
> it is that the vast majority of individuals who try to time the market
> are unprofitable. It is much safer to wait until Citigroup is fairly
> valued, sell it, then look for something undervalued again.
>
> Thanks for your comment though I will definitely think about that
> next time I make suggestions to people to continue holding a stock
> just because they own it and then turn around and suggest people
> who have money not to buy the stock.
>
> On Sep 04 02:54 PM johnsond wrote: