The Black Box

[michalel97123]

am thinking there is still more downside in financials. Buffet is nibbling here in mortgage insurance and the sovereigns are buying financial stocks. I think the Merrill buy was very telling. They bought 10% below what ML is right now. If i am right, ML will find a way to make that price the new low before the entire sector moves back up. That would knock citibank down 10% to along with many others. BTW, GS predicts that citi will lower dividend by 40%. To justify that cut and the required dividend (to attract new buyers) going forward, citi would drop by about 10% too. I think any nibbling can be done on stocks not really too involved in subprime but i am too dumb to know which is which so i wait for a further 10% drop and buy XLF. Sometime in first quarter of 08 and i think news on group will be at its worst so it will seem like a real dumb buy.