Citigroup (c)’s long-term outlook: Bullish

By Daniel at 19 January, 2010, 3:38 am

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C has a tentative price target of $8.97 nominal with an upper limit of $10.77 for now on the monthly chart if a rally should follow immediately.

Tentative until proven correct or wrong.

Longer Term:

Over 5 years, most of the tech wreck stocks of 2000 to 2002 were able to recover 38.2% of their losses from October 2002 to October 2007.

Those wrechedly hammered tech stocks were running 1000’s of multiples way back year 2000 before their downfall. They should have gone bankcrupt beyond any reasonable doubt. And yet, too many of them were able to survive and recover a portion of their loses.

How many 1000’s of multiples was Citigroup trading in later part of 2006 (not 2007 since C started going down in Nov 2006)?

Assuming that Citigroup survives in 5 years time from March 2009. How could they not? Too many disposable tech wreck companies were able to survive without government assistance, how could Citi be worst than them?

Then C should be able to recover at least 38.2% of it’s loses from Nov 2006 to March 2009 in 5 years.

That will be $22.37 price tag for a 38.2% recovery rate.

I bought lots of C in March, sold some in May and bought some more last month down to $3.15 selloff.

All under the assumption that Citigroup is not as crappy as most tech-wrecked companies of 2000 to 2002. The probability of C going bankcrupt is far much less than those tech stocks. And the probability of Citigroup performing a lot better than those high falutin tech stocks will be a lot better than 38.2%.

Those who had been too bearish with Citigroup better start comparing how zombie tech companies of October 2002 were able to recover at least a portion of their loses in 5 years from 2002 to 2007. Then compare them to Citigroup of now.

And don’t tell me we are not in a recovery mode right now similar to what had happened in 2002 to 2007.

This recovery has a lot more fuel under it’s belly than that of 2002 to 2007.

Do the math = $787 Billion +$2.3 Trillion + some more coming along the pipeline for the US of A alone.

How much fuel had been expended for the recovery period of 2002 to 2007? How much of the total amount had been allocated for those zombie tech companies to recover during that period?

- aarc