March 5, 2009 5:11 pm at 5:11 pm #589562
If by pull out you mean sell C, then by all means, yes.
If you mean pull it out of the bank account to give to Citi, then no. They may be a great company again some day, but think about what you are buying into right now.March 5, 2009 5:45 pm at 5:45 pm #1075522
Ever heard of the FDIC?
Your money is insured ($100,00 per account, and maybe it was even changed to $250,000 -check the YWN News archives for that story).
And they won’t allow Citi to go under. They will need to cover it somehow.
Many banks have gone bust, and did you hear of anyone who lost their money?
If they do go under, and no-one comes to their aid, it’s a complete meltdown of the banking system, and by then you will only need canned-food and ammunition……
OK…..back to work.March 5, 2009 5:49 pm at 5:49 pm #1075523
I’m thinking of buying AIG – for just under $500, I can have 1000 shares. If they really go defunct, I lose $500. If not, I can probably retire on the profit.March 5, 2009 5:51 pm at 5:51 pm #1075524
… and as appointed counsel for YWN, I will append the following statement to the Editor’s above:
The views expressed by the YW Editor here are intended only as good advice offered conversationally and should not be construed as professional investment advice. Readers are advised to consult with their financial professional before making any financial decision.March 5, 2009 5:59 pm at 5:59 pm #1075525
Oh. I wouldn’t worry about FDIC funds drying up while Bair is in charge. Last time there was a threat of the FDIC running out of funds, she ordered a seize of Washington Mutual and then sold the assets to JP Morgan. The FDIC (OTS) earned an easy $1.1 Billion on that transaction. You’re in the clear.
I look forward to the Bair Witch Trial at some point in the future, but until then depositors need not worry.March 5, 2009 6:06 pm at 6:06 pm #1075526
SJS, your feeling is typical of a young, inexperienced investor. I hear from lots of inexperienced investors that “Oh, this is cheap, I’ll buy it and either get rich or lose very little”. That’s not investing, it’s gambling. Buying a lottery ticket is the same thing but better – smaller loss, bigger prize amount.
There’s nothing wrong with doing this here and there. You’re actually doing someone a favor by buying their worthless shares (why do you think people are still selling instead of everyone holding). But there are better uses for your money. And don’t even think of buying in again as it drops to average down; that is a deadly downward spiral.
An experienced investor understands that you buy a winner, not a loser who was once a winner. You won’t “get rich quick” by doing so, but then again, neither will you by chasing AIG, Ford, GM, Citi, or others.March 5, 2009 6:09 pm at 6:09 pm #1075527
i believe we covered that ames your bank accounts are federally insured up to 100 or 250 grand depending on the policy of the bankMarch 5, 2009 6:24 pm at 6:24 pm #1075528
If you’re offering, I’d prefer the Macy’s one because I wouldn’t be caught dead in Bloomy’s. Thanks.March 5, 2009 6:36 pm at 6:36 pm #1075529
Ames, where do you shop more?
Macys has better coupons, but Bloomingdales better merchandise!March 5, 2009 7:19 pm at 7:19 pm #1075530
People, we are getting off topic here…March 5, 2009 8:08 pm at 8:08 pm #1075531
ames- didn’t realize my Citi thankyou points might go under. Why not get cash back to your statement? or- travel?
I better go take care of this ASAP. (Anybody care to join me on a free flight to…)March 10, 2009 5:15 pm at 5:15 pm #1075533
I’m thinking of buying AIG – for just under $500, I can have 1000 shares. If they really go defunct, I lose $500. If not, I can probably retire on the profit.
not necessarily if they go bankrupt and the government takes over then the shares are not worth anything (i dont really know what i am talking about or how this works but this is what my dad told me, so if someone could explain this i would appreiciate it) 🙂March 12, 2009 6:25 pm at 6:25 pm #1075534
citi is up to 1.60 now.
btw, squeak, I understand what you were telling SJS that her strategy is gambling not investing but I still thinks her idea makes sense IMHO. If I had $500 to blow I would definitely do it. Your comparison to the lottery is off because even if the odds of citi bouncing back to $50 per share are low its not nearly as low as winning the lottery.
I am definitely far from being a seasoned investor, but am I missing something?March 12, 2009 9:41 pm at 9:41 pm #1075535
Yes, you are.
Kids are always buying into “get rich quick” schemes. Buying a stock because it has a low price tag but a big name is certainly one. You can win, you can lose; but mostly you lose. Citi going to $50 is not likely gonna happen. Neither is AIG, Ford, GM, WaMu, or others (WaMu is bankrupt since October, but some still think it can come back). Will one of them hit the ceiling? Maybe. So which one should you throw $500 at? You can’t know.
If it’s “one and done” then why not, go ahead and throw away your money. But these things usually turn into a constant search for the “Deal”. You end up throwing good money after bad, and there’s nothing to be gained except a $3000 capital loss deduction on your Form 1040.
You are missing out on investment opportunities too. Let’s say you hit the jackpot and C goes to $50/sh in 30 years. You’ve made 5000% profit in 30 years, or 32-33% per year (CAGR). Very nice. But how certain is that investment? Close to zero.
Now invest wisely. Choose a solid company with a good balance sheet (not that I’d trust anyone’s balance sheet these days). Say you end up with a 4% dividend and a long term growth rate of 6-8%. This is a much more likely event to occur, and it is also pretty nice. Picking this kind of company is not a 100% thing either, which is why it is important to diversify (spread the risk; most companies will perform this way and only a few will fail). But this $500 investment ADDS value to your holdings, SJS’s (while very popular for its instant gratification qualities) DETRACTS value. Your $500 is a write-off at the time of purchase.May 7, 2009 5:01 pm at 5:01 pm #1075536
So who’s mad at me over this?
I still stand by what I said, even though you obviously would have a short-term gain right now…..
P.S. ames, I’m sending you back that Macy’s card now. Happy birthday to you!May 8, 2009 5:33 am at 5:33 am #1075537
ames: Its your birthday?May 8, 2009 8:08 am at 8:08 am #1075538
ames: Well Happy Birthday! (how old are you now how old are you now how old are you now? just kidding lol)May 12, 2009 3:31 pm at 3:31 pm #1075539
What is the value of citigroup/citicorp? There’s a lot of speculation, and a lot of gambling, that’s for sure. It is not a value buy.
But I’m curious to hear what others think. And I’m curious to know what they analyzed in order to develop their opinion. Because the normal sources of information (income statements and balance sheets, etc) are as worthless as the promises of a politician.
The only arguments I’ve heard for buying Citi are 1) Little to lose vs much to gain (which doesn’t account for the relative likelihood of each) and 2) Citi can’t and won’t fail so eventually it must go up.May 12, 2009 4:37 pm at 4:37 pm #1075540
lol, ames, you’re on a roll! I’m glad they let you out from rehab!
I don’t like the can’t fail approach. Once Obama finishes nationalizing them then there won’t be any common stock anymore(ie stock that us commoners can buy, lol).May 12, 2009 5:17 pm at 5:17 pm #1075541
1 – Why would you go long term with Citi and not have a growth/value portfolio instead? I’d bet that a portfolio beats Citi for returns over 20 years, plus the downside risk is minimized. You’re not going to have the up and down swings that Citi would have along the way.
2 – Who says that the Citi shares you buy today are going to give you a part in the bank that gets saved (assuming that it will get saved)? How do you know that the shares won’t be diluted/dissolved/reverse split? Not too long ago Citi was allowed to split into two companies – the good Citi and the bad Citi. What if your shares give you ownership of only the bad Citi (next time) and the good Citi gets to issue new shares?May 12, 2009 5:29 pm at 5:29 pm #1075542
i’m not an expert, but i would think that if the gov’t nationalizes it then the stock would become worthless. Squeak, is that true?May 12, 2009 5:34 pm at 5:34 pm #1075543
charlie, I don’t know. If there is a simple out there I’m sure I would know it, though.May 12, 2009 5:35 pm at 5:35 pm #1075544
ames – one word: Diversify.May 14, 2009 8:25 pm at 8:25 pm #1075545
you’ve been spending too much time in the CR and not enough maintaining google. I hope you dumped your shares.May 14, 2009 8:42 pm at 8:42 pm #1075546
hey chaaaarlie- nice to see ya 🙂
good point!May 14, 2009 8:55 pm at 8:55 pm #1075547
I will try to spend less time here, then.May 14, 2009 8:59 pm at 8:59 pm #1075548
you do that and I’m a monkey’s uncleMay 14, 2009 8:59 pm at 8:59 pm #1075549
Closed at $3.55 today.May 15, 2009 10:19 pm at 10:19 pm #1075550
hey chaaaarlie- nice to see ya 🙂
Thanks, and good to see you too, dude!May 18, 2009 4:31 pm at 4:31 pm #1075551
From the guys who brought you Mathematica, now comes Alpha. Let me know when they get the answer to Life, The Universe, and Everything.May 18, 2009 7:51 pm at 7:51 pm #1075552
>> Thanks, and good to see you too, dude! <<
Vuss iz ah dude? 😉May 5, 2015 2:14 am at 2:14 am #1075553
They’re over $54 a share now. Hopefully you bought them when they were selling for pennies.May 5, 2015 2:08 pm at 2:08 pm #1075554
did all of ames’ posts get deleted?May 5, 2015 2:11 pm at 2:11 pm #1075555
aig is @ 58 tooMay 5, 2015 3:00 pm at 3:00 pm #1075556
Joseph, they also had a reverse split, so the $1 value from 6 years ago would be like $10 today. So yes, if you invested at $1, you would have about 5.4x the amount now. Not enough to retire on!
AIG also had a reverse split – 1:20. I believe that if you invested when they were near their lowest point, you would have about doubled your money there.
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