Enterprising Investor Forum

Entering the market – 3 Tuesday, November 27, 2007

This is the last part of our short series of buying in thirds, where we not only talk about this investing method but also talk about 3 potential candidates in these troubles times. After talking about Precision Drilling Trust (link) and Safety Insurance Group (link), we would like to turn your attention to Citigroup (C).

We had already talked about Citigroup in October (link) and we continue to believe that long-term buyers will be rewarded. However, we are also convinced that all the troubles aren’t over but we also believe that it is impossible to try and call the bottom. How to deal with this? Well, as we have been discussing, buying in thirds is a great option. Once you feel that the upside potential is bigger than the downside, you can start to take an initial position in the stock. Seeing that Citi will probably see increased volatility, one strategy could be to add to an initial position either on a -10% or +10% move in the price.

Citigroup remains a:

• highly respected company
• premium brand name
• cash machine
• good dividend paying stock

Furthermore, other ‘big investors’ are starting to see some value: here.

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