Monday, March 17, 2008

Fear as thick as butter .....

Pervasive, terrifying fear in the financial markets. The US$ fell 3 yen within 45 mins after the Federal Reserve announced that it will inject more money into the financial markets. Traders interpreted this as the Fed trying stop something more sinister from happening and that there are banks and brokerages about to collapse like Bear Stearns.

When I got home, I checked the price of Citibank stock it had fallen from $21 to $18. I've been checking and checking the numbers from Citibank for sometime - even if it takes a hit from the SIVs assets and Level 3 assets, it should be able to survive this crisis. I've been waiting for months to buy this stock....although I prefer to buy it at $15, I'm not too sure that it will ever get there - $18.30 will be my entry point for Citibank....lets see how much this stock is worth 6 months from now.


"Be fearful when others are greed and greedy when others are fearful" -Buffett.

3 comments:

Anonymous said...

haha! To think you can beat Ho ching and MM Lee in their game and buy cheaper than them....good one!!

Anonymous said...

Bear Sterns sold for less than the value of its new building, yup! I am very sure we are there. I am going in with you on Citi. Good Luck to both of us.

LuckySingaporean said...

anon 5:01 PM,

Cowards live longer. How do you know Citi isn't worth $3 per share?

Our esteemed govt was quite sure of that when they put in $10B for tax payers' money at $29 per share. Way to go Ho Ching...no cowards at Temasek and plenty of accountability.

Life thought me the truth is always somewhere in between. Citi was making billions without those SIVs and CDOs, through its traditional banking services...and Citi has a global operation, I don't see the Asia go down (yet?). It should be able to ride this one out.

I'm not sure that it won't go to $15...not as sure has those guys in Temasek that are handling tax payers' money. I just sense that the probabilities are in my favor at $18....