I Bought Citigroup At $30 Dollars A Share

[Joey122]

Hi All,

I ve always been very bearish on property in the UK, but have squirelled away quite a bit of money and have saved it in Icesave and kaupthing as well as a few other instituitions.

I have never really bought shares before, but about 3 months ago I decide to but Citigroup at 30 dollars a share (and I bought 4000 shares which set me back £60,000).

If you want to know what made me do this

1) I heard Citigroup had lost 50% of its value and thought it was a good time to buy given how much it has fallen

2) I heard that the dollar was going to strengthen significantly against sterling.

I AM NOW SITTING ON A 20K LOSS and am really worried.

All this cash has been earned over many years (and whilst I m not close to retirement), I worked *VERY* hard for this cash and scrimped and saved whilst others were enjoying themselves.

I ve still got some cash, but thought (at the time) that shares would perform better then cash which will likely be inflated away by Gordon &co

What are peoples thoughts on Citigroup and my dilema?

They actually have a well diversified business - Right?

[Far Out Bear]

Hi All,

I ve always been very bearish on property in the UK, but have squirelled away quite a bit of money and have saved it in Icesave and kaupthing as well as a few other instituitions.

I have never really bought shares before, but about 3 months ago I decide to but Citigroup at 30 dollars a share (and I bought 4000 shares which set me back £60,000).

If you want to know what made me do this

1) I heard Citigroup had lost 50% of its value and thought it was a good time to buy given how much it has fallen

2) I heard that the dollar was going to strengthen significantly against sterling.

I AM NOW SITTING ON A 20K LOSS and am really worried.

All this cash has been earned over many years (and whilst I m not close to retirement), I worked *VERY* hard for this cash and scrimped and saved whilst others were enjoying themselves.

I ve still got some cash, but thought (at the time) that shares would perform better then cash which will likely be inflated away by Gordon &co

What are peoples thoughts on Citigroup and my dilema?

They actually have a well diversified business - Right?

yeah, this all sounds genuine

[Loggy]

Hi All,

What are peoples thoughts on my dilema?

Well, makes me feel a bit better about my euro mortgage losses.

[microbe]

I had Marconi shares. Not 60K worth, thank God. I think you are unlikely to lose the lot as I did on Marconi, but you may have to wait a while....

[Joey122]

yeah, this all sounds genuine

For many years people have always said to hold 80% of your assets in shares - Right?

I was always in cash and then decided to buy some shares.

There are many reason for this :

1) Income from shares is CT and therefore the first 10K is tax free whereas profit in the bank is taxed at 20%

Do you see what I mean?

Are you suggesting that you should ever hold shares?

[InternationalRockSuperstar]

Buy Gold.

Job done.

[Joey122]

Buy Gold.

Job done.

Its been posted here before - Gold at 1K an ounce is overpriced and does not grow - You have to pay to store so you are losing inflation returns.

THE QUESTION HERE IS WHAT PEOPLE THINK OF CITIGROUP? It could never fail (Far too big)!

[scuuzeme]

What are peoples thoughts on Citigroup and my dilema?

That one should only bet what one can afford to lose.

[sossij]

I have never really bought shares before, but about 3 months ago I decide to but Citigroup at 30 dollars a share (and I bought 4000 shares which set me back £60,000).

If you want to know what made me do this

1) I heard Citigroup had lost 50% of its value and thought it was a good time to buy given how much it has fallen

2) I heard that the dollar was going to strengthen significantly against sterling.

They actually have a well diversified business - Right?

Just in case this isn't a wind up... you parted with sixty thousand pounds on the basis that you "heard" just those two pieces of information? And you have to ask whether the business is well diversified? Don't you know????

[R K]

Hi All,

I ve always been very bearish on property in the UK, but have squirelled away quite a bit of money and have saved it in Icesave and kaupthing as well as a few other instituitions.

I have never really bought shares before, but about 3 months ago I decide to but Citigroup at 30 dollars a share (and I bought 4000 shares which set me back £60,000).

Tad rash wasn't it?

By the way, I think I am correct in saying that neither Icesave nor Kaupthing are covered by the UK deposit protection scheme should they go t*ts up since they aren't UK banks, they're Icelandic. I would check this.

All bad experiences teach us something don't you think?

[Joey122]

Just in case this isn't a wind up... you parted with sixty thousand pounds on the basis that you "heard" just those two pieces of information? And you have to ask whether the business is well diversified? Don't you know????

I heard and read a lot about them - And I was always concerned that cash was going to get inflated away.

I m happy to stick with these shares for a long time and wanted exposure to the financial sector - But with the whole Bear Stearns fiasco I m very very worried.

[InternationalRockSuperstar]

For many years people have always said to hold 80% of your assets in shares - Right?

I was always in cash and then decided to buy some shares.

There are many reason for this :

1) Income from shares is CT and therefore the first 10K is tax free whereas profit in the bank is taxed at 20%

Do you see what I mean?

Are you suggesting that you should ever hold shares?

You certainly shouldn't hold shares in financial stocks at a time when the international monetary system is literally falling apart.

I would not recommend you hold any shares at the moment, although if you insist in holding shares you should go for things like forreign utility companies, since they are relatively immune to consumption slowdown, and of course from our own sh1tty domestic economy here in the UK.

Make sure you get a physical copy of the share certificate though (as opposed to a niminee account) as there is a reasonable chance that you broker will go tits up in the next 6 months.

[Uriah Heap]

If it is any consolation, I don't think your logic was too far out when you bought. You could have been sitting on a £20,000 gain just as easily.

[the end is a bit nigher]

For many years people have always said to hold 80% of your assets in shares - Right?

I was always in cash and then decided to buy some shares.

There are many reason for this :

1) Income from shares is CT and therefore the first 10K is tax free whereas profit in the bank is taxed at 20%

Do you see what I mean?

Are you suggesting that you should ever hold shares?

First rule, just because something has lost 50% it doesn't mean it can't lose the rest.

Second rule, don't put all your eggs in one basket (case).

Having said that, I think it unlikely the really big banks will go bust (Bear Stearns isn't that big in the grand scheme of things). I also note that Bear Stearns was bailed out and itself is unlikely to go bust. The most likely scenario is that you will have to sit on your loss for the next 2 or 3 years.

[theblacksheeple]

Citi are one of the banks i am most worried about at the moment. I keep thinking back to that documentary on the downfall of Enron on C4 about a year ago. The large investment banks were all involved in it up to their necks and Citi was one of those names that came up, over and over again.

I can't help but shake the feeling that Enron was simply a proto-type for the banks in how to run their businesses and hide the truth that the system had been breaking down for many years, this was there chance for a last hooray before a very nasty and long overdue downturn.

[bobthe~]

Tad rash wasn't it?

By the way, I think I am correct in saying that neither Icesave nor Kaupthing are covered by the UK deposit protection scheme should they go t*ts up since they aren't UK banks, they're Icelandic. I would check this.

All bad experiences teach us something don't you think?

I think all banks to trade on the retail side in the UK have to sign up for the FSCS don't they?

This is a wind up post though, surely?

Nobody just blows all their money on one company do they?

Might as well pop out to Vegas and spunk it all on Red

[Joey122]

First rule, just because something has lost 50% it doesn't mean it can't lose the rest.

Second rule, don't put all your eggs in one basket (case).

Having said that, I think it unlikely the really big banks will go bust (Bear Stearns isn't that big in the grand scheme of things). I also note that Bear Stearns was bailed out and itself is unlikely to go bust. The most likely scenario is that you will have to sit on your loss for the next 2 or 3 years.

Thank you

I just kept on balking every time the monthly interest from Icesave was paid and 20% was going straight to the joke Gordon Brown is.

And then I would have to pay a further 20% to the tax man - There is no incentive to save hard cash in this country!

[gasket37]

...I think I am correct in saying that neither Icesave nor Kaupthing are covered by the UK deposit protection scheme...

You think wrong

http://icesave.co.uk/financial-protection.html

[Joey122]

I think all banks to trade on the retail side in the UK have to sign up for the FSCS don't they?

This is a wind up post though, surely?

Nobody just blows all their money on one company do they?

Might as well pop out to Vegas and spunk it all on Red

I made it very clear that this was not all the money - But it was all my investments (If that makes sense...)

[DabHand]

You bought shares in a declining market sector that was only just starting to show the signs of sub prime losses and possible global recession led by the bursting of a credit bubble. I think that was about the time l got rid of all my shares, l'm no options trader and didnt see much hope for buy and hold.

Did you do any research? Seriously 60k on a passing hunch?

You are right though, Citibank won't be allowed to fail completely, it'll get salvaged by the Fed or another bank with a zero equity value = you may lose all your money.

[Garry AKA Pod]

Its been posted here before - Gold at 1K an ounce is overpriced and does not grow - You have to pay to store so you are losing inflation returns.

THE QUESTION HERE IS WHAT PEOPLE THINK OF CITIGROUP? It could never fail (Far too big)!

Roman empire was rather large.

[R K]

I think all banks to trade on the retail side in the UK have to sign up for the FSCS don't they?

This is a wind up post though, surely?

Nobody just blows all their money on one company do they?

Might as well pop out to Vegas and spunk it all on Red

I have something in my head about the Icelandic banks. It may be that they if they are covered by the FSCS, then they wouldn't be bailed out by the BOE as for instance NRK were. You would be reliant on the Bank of Iceland. That could be it. Either way, I personally would not want to be resident in UK, buying shares in a US bank and putting my cash in Icelandic banks. I think the bank sector will outperform once we are through this stuff, but there are times to hold 'em and time to fold 'em and for me this ain't a time to hold 'em.

Edited March 15, 2008 by Red Kharma

[Joey122]

You bought shares in a declining market sector that was only just starting to show the signs of sub prime losses and possible global recession led by the bursting of a credit bubble. I think that was about the time l got rid of all my shares, l'm no options trader and didnt see much hope for buy and hold.

Did you do any research? Seriously 60k on a passing hunch?

You are right though, Citibank won't be allowed to fail completely, it'll get salvaged by the Fed or another bank with a zero equity value = you may lose all your money.

Only just starting? It had announced massive writedowns which had been factored in by the markets and was paying a nice dividend.

No one expected it to get this bad - Me included - I expected a gradual house price retreat - Not people just walking away and handing over their keys

[InternationalRockSuperstar]

Gold at 1K an ounce is overpriced

You'll see.

and does not grow

It grows a hell of a lot more than citi(group)

You have to pay to store so you are losing inflation returns.

Gold went up 20%+ last year. There is NOWHERE that charges anything like that in storage charges

THE QUESTION HERE IS WHAT PEOPLE THINK OF CITIGROUP? It could never fail (Far too big)!

No it's not too big to go bankrupt and default. Argentina wasn't too big and neither was Russia.

Bear Sterns, Freddie Mac, Fannie Mae, Countrywide have already gone bankrupt and are on Federal Reserve life support.

[AteMoose]

shares are volitile only gamble what your willing to loose, and it is best practice/reduces risk if you have a well diversified portfolio, a range of different stocks etc etc. As for your current punt, er whats done is done, decide a limit or stop on how much your willing to loose and how much your willing to gain, get out of the stock when you hit either limit/stop.

Hmmm crazy got a first go, they have been trading at about $50 since 2000, not cant see why you expected them to breach that and go higher, and thats a lot of money to risk if you through 30 would return to 45...

http://finance.yahoo.com/q/bc?s=C&t=my...&q=l&c=

Edited March 15, 2008 by moosetea