Citibank stock buy NOW?


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I am thinking about investing into citbank stock. The price is currently real low and its seems like a smart investment. What are you folks thoughts? Thanks, Erin

symbol C


Answer (3):

Common Sense

It's real smart to get investing suggestions from strangers. They really know what's best!

CitiBank can be a great investment. I prefer banks with a greater footing (less likely to drop by 50%, because of all their problems). For example I love PNC & Bank Of NY. I'm up quite a bit.... there's much more room to grow.... & they're not in terrible shape.

The price of CitiBank should have nothing to to with your investment decision. In fact, as a general rule lower price means a higher chance of failure. If you're going by what the talking heads on TV (radio, etc). are saying...... you're really going to sink your portfolio sometime in the future.

Learn investing. Make your own decisions.

John W

If you believe that they are undervalued then they may be a good investment candidate.

You can try to verify if they are undervalued by estimating their cashflow and discounted that cashflow to a net present value as per the book "The Dhandro Investor" by Mohnish Pabrai or if it pays dividends by discounting expected dividends to compare with current share prices (the DVM, dividend valuation model). Both approaches are similar to doing an internal rate of return calculation and indeed you can do an IRR calculation to help decide if the investment is worth it.

You can size your investment by calculating your expected log utility of wealth essentially optimizing for the Kelly Capital Growth Criterion or for proportioning your portfolio amongst multiple investment opportunities to find an optimal balance between diversification to reduce risk and maximum growth of wealth. You can use the random walk based upon the volatility defined as the standard deviation of the growth factor (closing price divided by previous day's closing price) with the general drift (average of the growth factor) factored in to calculate the probabilities for the log utility of wealth optimization.

If you are worried about timing the bottom, you can either start dollar cost averaging the stock or you can try to wait for a technical indicator such as a MACD to indicate a change in trend. Dollar cost averaging is more reliable.

wrestler94

I suggest that you wait unti citigroup publishes their earnings. You should wait to see if they beat analysts earnings. Usually if they don't, the stock takes a crucial hit within the first month. If they beat analysts earnings of 8 cents. Then I would invest because the price would most likely rise. Remember to properly analyze all stocks and prioritize all risks.