Quote from 1flyfisher:
The smart value investors DON'T buy when stocks are falling and in a down trend. Why because you never know how far they will fall. They wait for the light at the end of the tunnel. They wait for the stock to reverse direction and sacrifice a few points in lieu of safety. They wait for the light at the end of the tunnel as far as the fundamentals and stay on the sidelines patiently watching and waiting for the proper reversals in the fundaments and technicals to occur.
That's smart value investing 101.
You're welcome.
We can agree to disagree about some of what you said. The most unusual part of your statement is the part about value investors waiting for technical reversal. Value investors are primarily looking at fundamentals.
How do you know which bounce up is the bottom? You don't. What you do is look at the valuation and make an educated guess about the possibility that a stock is trading at a price that does not fairly reflect its value in the marketplace. Most stocks trade at multiples of their earnings, right?
You might correctly take issue with the idea that C can't go to $1. Of course, it might. Value investors won't agree; they'll say there's a certain point at which they will start buying the stock and accumulating a position. I don't really agree that we don't know how far C could fall. It's a matter of the fat tail scenario. 5 sigma events can always happen, but I still drive my car.
Please remember, a fairly good investor once said you must 'buy when blood is running in the streets'. Making big money in stocks like C is accomplished by acting in a contrarian manner.
To be honest, I have no dog in the fight about C's correct valuation or its worth as a value investment here. I just don't think that C at $30 is a bad longer term hold.
The guy I responded to said 'It's a bear market!'. He meant the overall market, probably because he's never seen a real bear market. I gave him the out by saying 'You mean it's a bear market in C?" and he took it.
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Quote from Silentmax:
Can we have a show of hands here who believe Citigroup will file for bankruptcy within the next 2 years or so?
During trading, I sometimes wonder who is on the other side of my trades. Then I come to ET, and I realize - it's the same guy from the checkout line. You know, the guy who stands there watching the cashier punching in every digit and checking the numbers on the screen. Then when the cashier gives him the total, he stand there for a minute, then slowly reaches for his wallet. Then he searches around in his wallet for a while, and then finds some bills. He then puts the bills on the counter and reaches into his pocket for change. Then he gets the change out. He looks at the screen, and starts to count change out. Each coin is placed individually on the counter. He roots around, occasionally pulling a coin out and looking at it, then rejecting it and putting it back in his pocket. Finally he finishes the process and looks around to see who's watching the display.
That's this guy.
