*****Whitney Speaks Again
*****Rant of the Year
depressing forecasts for the big banks from the best big bank
analyst out there, Meredith Whitney. You may recall it was Whitney
who forecast the dividend cut at Citigroup (NYSE:C) back in
October 2007. That was three months before Citigroup actually cut
its dividend. Whitney should also be credited as one of the few
analysts to see the financial meltdown coming.
doesn't like Citigroup and would be a seller at current levels.
yesterday she said, "Most of the big banks would be lucky to break
even or earn a little bit of money this year. I don't think any of
the banks that I cover will continue to pay their existing
fund giant picked a bad time to double down on Citigroup. Apparently
a few different fund managers thought it would be a good idea to add
104 million shares of Citigroup at a roughly average price of $10
and change a share. Bloomberg reports that Fidelity is down $874
million on this round of purchases.
previous holdings and the losses are well over a billion.
If you've ever
heard the expression "Don't try to catch a falling knife," this is
what it means. I don't think it's so much about trying to bottom
fish for quality stocks. I think it's more about assuming that one
knows more than the market.
always clues and hints in the stock market... Sometimes they're
subtle (like Meredith Whitney predicting a dividend cut), sometimes they're
obvious (like Citigroup actually cutting its dividend). It's the
investor who seeks to derive meaning from the signs (as opposed to
imposing meaning on the signs) that has the most success.
that never ceases to surprise me is how long it takes for trends to
manifest in the consciousness of investors. The government is
selling Treasuries like there's no tomorrow. Next week, a record $94
billion in short- and medium-term notes hit the block. The old
record, $78 billion, was set just a month ago.
There can be
no doubt that this is ultimately inflationary. And we got a taste of
that from a larger-than-expected jump in the producer-price index
Thursday morning. Eventually, investors will demand higher yields
for Treasuries, which will really light a fire under inflation.
that, long bonds still trade near record prices. I tell you, I feel
better about my short Treasury bond position in my Recovery
Portfolio every day.
things, and I'm done for the week. First, last night's video
conference went really well. My analyst Jason Cimpl gave out a stock
that you shouldn't miss. It's a healthcare tech stock that's got
nearly 25% of its market and growing.
HERE if you missed it.
case you missed it, here's a
LINK to the phenomenal video clip from CNBC's Rick Santelli that
everyone's talking about today. He's got a great solution for
stimulus spending. This is something we'll discuss for sure. Email
your comments to
Have a great
P.S. Just breaking: Gold broke $1,000 today. I was going to wait until Monday to share my new Gold Rush report with 5 great stocks in the gold mining sector, but this thing is too hot, so please see this link for more information on which gold stocks to buy.
02-20-2009 4:28 PM
Filed under: Ian Wyatt, Ian, Treasury Bills, bank nationalization, Rick Santelli, CNBC, Meredith Whitney, Santelli, gold price, gold, small cap, Fidelity, inflation, CitiGroup