Citi - Very Rewarding

Citi
The "Very Rewarding” Campaign

April 12 Update
Sold for Gain
FEED - $950
Total Gain - $950
Holding C and up $4086

A few years ago Citi Bank ran an ad campaign called Citi - "Very Rewarding.” At the time, Citi was trading at around $50 a share. With the fall of the financial's Citi has just recently come off it's low of .97. Now Citi is again living up to it's old campaign as those who were buying were definitely flying as others blindly looked on. All last week there were those who were writing Citi as done and a are still surprised even as it printed an AH high of 4.30.

Because of the R/R factor on this one I went in on Thursday in PM as I wrote in the last blog at $3.00. I dont think many realize all that's at play with Citi this week so I'll share some of the highlights and interesting sub plots to this developing play.

Number one, is the obvious, we have Earnings reporting this Friday BEFORE the bell which generally means good news. This after WFC blew the doors off of their earnings report in an early suprise Thursday before the bell.

C

So the FINS are setting up for some good numbers as M/M and fuzzy math with derivatives combined with help from the Fed all sync to build consumer confidence that the economy is turning. Now there is no doubt this is very much a CONfidence game, but if you know what they are doing, then play along and reap the reward. No need to be cynical and blind.

So a few intersting points that led me to believe this was in play other then earnings.

First, In a letter to his employees the CEO of Citi states,

"In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007."


Second - The arb story that could lead to a VW type short squeeze.A Graphic Representation Of the Citi Arb Carnage

Three because Citi is the number one shorted stock on the NYSE short interest at 22.28 % of the float or 1,209,885,200 shares.

Third - Cramer posted a video of a BUY for Citi here April 7th.

Fourth - The Stock was at $3 and lagging behind and giving ht e above, the upside out weighed the Risk.

Today my account gained $6900 thanks to FEED. As I've written before I've had to average down on this one and have been very patient for 5 months. Yes, 5 Months! Sometimes patience pays. So today I went green enough for me to sell and release $16K in capital that was dead money. The China AG plays look to be a sector that is heating up. Apparently Jim Rodgers made some positive comments and the stock soared. So seeing GRO as a possible play in the coming days I bought some.

FEED

GRO

Another buy today was MGM. I've been liking the story behind the both Vegas plays MGM and LVS. So today I bought on the dip at $5.75 and am looking to add here with the news just out.

MGM Mirage gets bank funding for CityCenter construction

8:22p ET April 13, 2009 (MarketWatch) LOS ANGELES (MarketWatch) -- MGM Mirage said late Monday that it has received an amendment of its senior credit facility from banks lending to it. This will allow it to fund the entire current construction cost of its CityCenter project, regardless of whether Dubai World goes ahead with a $35 million investment in the project. The costs total $70 million, due no later than April 17, MGM Mirage said in a statement. The casino operator said it "remains committed to finding a long-term solution to the financing of CityCenter to ensure the completion of this important project."

MGM

And finally I took a position in TUES and BEE on that dip at the end of the day. I won't be staying in this one long, but that dip was attractive, so we'll see where this goes. The REIT's have been hammered but we might gets some positive movement here in the short term.