Realmoney.com contributor Chris Laudani penned a few brilliant words on
Citigroup (C) today and I thought his BEARISH argument was both noteworthy + concise so I'm including it below :
" Why does Citi have to go up? What's so great about Citigroup? Citigroup has underperformed the S&P 500 since 2004. Didn't we just go through the greatest lending boom in modern times and the stock STILL underperformed the S&P 500? How'd that happen? Those guys couldn't get the stock up then, what makes you think they will now?
Why can't the stock trade between $20 and $22 for the next three years? All the mutual funds that invest in the financial sector have been decimated and probably have had huge redemptions. Those guys don't have any fire power left. Who's left to buy the stock? Who wants to believe the story now? So they got a new guy at the top - big deal. It will take three years to boot all the dead weight and restructure the joint. Performance based funds don't have that kind of time.
Just because it's cheap, doesn't mean it can't STAY cheap. After the dotcom bubble, JDS Uniphase (JDSU) and Sun Microsystems (JAVA) were left for dead. Those stocks struggled for years and years. "
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Data Courtesy: Realmoney.com (subscription site)
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