Tuesday, October 16, 2012

Tax-Payers, Not Pandit Kept Citi Afloat

My post will be short today.  I normally do not make my opinions known on individual stocks or companies but todays Citigroup (C) featured headlines are forcing me to comment.

A lot of personal friends have been in-and-out of the financial networks today commenting on the respect they have for Vikram Pandit, and applauding the job he did for Citigroup by bringing the bank back from the brink.  In fact, Byron Wein said just that as I am typing this post.  I simply ask, how hard is it to bring anything back from the brink when the government supplied you with all of the tax-payer cash that you need?  Any of us who are experiencing some type of financial hardship can do a good job of coming back from the brink if we are given the money to do so. 

In the real world we are judged based on performance.  Pandit had been at the helm of Citi since December 2007.  In that time period shareholders were rewarded with an 89% decline in shareholder value.  I know he inherited a mess, and that seems to be the culture at Citi, with or without Pandit, but let’s please take into consideration the tax-payer help (via the Fed) that Mr. Pandit received to help avoid falling off the cliff.

Thank you and good luck everyone.


Jon R. Orcutt, founder of Allocation For Life, is an asset allocation strategist and author of “Master the Markets with Mutual Funds: A Common Sense Guide To Investing Success”; Manager/Creator of the AFL Model Portfolios available for members of Allocation For Life in self-directed accounts at Folio Investing