A 90% haircut is about as good as 100%
Reader comment on: Citi's Losses
Submitted by Lyle (United States), Jan 27, 2013 23:32
Citi is down by 90% from its peak, because the managment did not give a damn about the ordinary stockholders who were just schmucks to be taken advantage of (I got stuck with some, and bought a bit more when they were supposed to be the best thing since sliced bread). I agree the managment should have been changed, but note that neither in the case of CiTi or AIG were the stockholders totally wiped out, while with GM they were (but GM/MOT did provide a nice way to write off some other gains) In either case it would teach one that banks that do not do only vanillia banking should be avoided for investment purposes unless you are wishing to speculate. Perhaps a seperate unlimited liability class of stock for the execs that makes the corp more like a partnership for them. (Recall that for the first 50-60 years national bank stock was sold with a par value of twice the price paid, meaning that you could be assessed the other 50% if need be.) (Of course then banks were not widely held)
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