Time to Buy Financials
With the market looking like it put some kind of bottom on Wednesday, an financials rebounding the way they did, it is time to buy the beleagured names like Citigroup (C) and maybe even some Merrill Lynch and Morgan Stanley here. These stocks have gotten too cheap and the risk/reward is certainly favorable at current levels. Keep in mind that foreign investors in Abu Dhabi and Saudi Arabia own almost 50% of Citibank. These are the same investors that bought almost 15% of Apple after the dotcom fiasco when the stock traded down to the single digits.
Patience is required for these stocks, but I do expect a 40% return in Citi over the next 18 months.
– Faisal Laljee
Full Disclosure: I do not own any of the stocks mentioned here but my position can change anytime without notice.
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