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Citigroup Inc. Message Board

  • geac_computer geac_computer Jul 27, 2007 3:18 PM Flag

    Citi is $2.00 below Graham value


    Every body knows Ben graham Right LOL???

    OK his formula is root of (22.5XEPSXBPS)=

    root of 22.5 X $4.40 X$24.48= $49.22 for Citigroup

    You buy at fire sale price.....

    This mean that Citigroup is darn cheap COPY HOUSTON??? LOL

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    • geac computer,
      Benjamin Graham argued that a true buy was at the net asset value per share of a company. By net assets, he was referring to cash, accts rec, invesntories less current liabilities. It is very difficult to find stocks that fit that catagorey

      I am not familiar with your formula.

      Graham argued that after you calculate a fair price, you must allow a margin of safety to allow for Mr, Market's short term irrational moves.

      I do agree that buying C <10x fwd pe is a good entry level for longer term investors. You can also get some comfort by using a discounted earning model. Assuming only a lomg term growth rate of 8%, gives a fair value of $65+

      good luck

      • 3 Replies to typea1949
      • Wasn't there a famous value investor or economist who said that the fair value of an asset with a long term growth rate of 8% is infinite?

      • typea
        I see that you are buying into market on the dips. Don't you think that there is a credit problem?

        I also saw that you are buying DHI. How can you possibly be buying a homebuilder with all the bad news out there?

        You should have drunken the beer instead of the water when you were in Mexico

        You will need more than good luck to make money in hb stocks

      • Hate to say it but I totally agree that the bleeding should stop when PE goes below 10... See BAC and JPM today

        At the PE of 10 and 18% growth, it will put C PEG to 0.6 with div of 4.9%...

        Until then people will start to realize that it is a deal of the century.

        Funny how people think all loans are bad. C still can make $ from those even if they have to hold it (assuming they are smart enough to manage those loans, i.e. not to sell at 90% discount)

        Short term i see the irrationality continues for 2 more weeks at least. As long as XLF is shorted day after day, I cant see C rebounds..

        disclosure: i owned C Jan08 and bull spread...

        Like Mr Bollings said "Not only I lost my shirt, but I got
        it ripped off"
        That's exactly what happened to me this week.

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