Trade: Citigroup (C)

Today I decided trim a small portion off of my Citigroup position in order to build up some cash reserves as well as take advantage of the sudden and dramatic price moves we've recently seen.  This sale is a matter of both discipline and fear.  The stock has moved about 8% in the last week on news that a Tax Bill has been formed and approved in the senate.  The bill is exceptionally favorable for businesses and high income earniners and therefore you're seeing quite the surge in the banks.  At the same time, you're also seeing a rotation out of technology - particularly the semiconductors.  This move doesn't feel normal or natural - despite the fact that Citigroup is cheaper than its peers and I was feeling I was taking on too much risk of a downturn.  Combine that with the size of the position in the portfolio (approximately 15.6% of my portfolio), I felt it was time to protect some gains to rebalance my portfolio some and have some cash for the next downturn.

I want to reiterate that I don't see anything wrong with the company.  I expect growth to continue and potentially accelerate over the next couple years as we watch interest rates rise.  This makes the company an excellent long-term holding.  In the short-term, I felt the price increase isn't sustainable and am awaiting an opportunity to buy back at lower prices (most likely around $70).  Ideally, I won't be paying over $76.10 to buy the shares back, should I prove to be wrong in my execution.

Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

Nothing on this site should be taken as advice, research, or an invitation to buy or sell any securities.  All views expressed are solely of my own and I am not a professional money manager.  Please consult with your financial adviser before taking any action in your own portfolio.