I don't trade stocks, nor do I own them. I have always had the belief that investments should not be made for purposes of cash flow. Investments should be made for growth. And buying stocks makes you focus your timing decisions on frustrating fluctuations. That's psychologically a handicap when investing.
Therefore, knowing full well that the stock for Citibank is completely fixed and bobs at the machinations of the specialists, I would COMPLETELY short Citi in times like this. First of all, Citibank is going to go tits up.
Do you know what also drives me batty? Kenneth Lewis, CEO of B of A - today said that biz was good, and the stock jumped. This reminds me of when Angelo Mozillo said that Countrywide had a "kitchen sink quarter" (as in, everything bad got thrown at us except for the kitchen sink - as if that makes any sense...) and that Countrywide would return to profitability in the next quarter. PEOPLE BOUGHT THAT STOCK FOR 29 AND IT'S WORTHLESS NOW.
The same thing is going to happen to Citibank, but I won't short stocks. It is highly risky and a stupid, stressful thing to watch.
3 comments:
The government is picking winners and losers. There's no doubt in my mind that Citibank and Bank of America are going to zero. Bank of America bought Countrywide and Merill Lynch. Both of these companies are laced with toxic shit that will go to zero once the companies mark these assets to market. A dead cat usually bounces twice before resting firmly dead on the ground.
You can read the headlines now "Citibank is taken over by US Bank" for $10 a share the day after you short it for $2 and you lose $8 a share.
Okay let's see, Simple Jethro Bodeen Math...
If you had bought $10,000 shares Citi Bank at the end of the day on Monday for $1.00 that would give you 10,000 shares of Citi Bank stock.
If you had sold your 10,000 shares of Citi Bank stock today (friday) the high was $1.89
So for a $10K investment in 4-5 trading days would have netted you a profit of $8900 dollars or an 89% gain in 4 to 5 days...Not Bad!
Well lets make that 100K shares of Citi Bank and sold for $1.89 today. Your Net profit $89,000 in 4 or 5 trading days! Even Better!
Forget Photography... learn to play the Market both ways. It beat working for a living!
Jack
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