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Market Disconnect

2 October 2007
Written by: average_joe Posted under General Investing

How is this for a market disconnect.

Citigroup Inc. (NYSE:C) announces that its quarterly earnings will PLUNGE 60% on $5.9 billion in losses and write-downs from subprime and leveraged loan difficulties.

And what does the market do? They drive the stock up 2.25%! In fact, the Dow’s surge was led by the financial sector.

Meanwhile, Walgreen Co (NYSE:WAG) announces that net income has fallen by 3.8% and what does the market do? They sell off the stock to the tune of 15%!

The good news is that WAG has finally dropped below my model price of $42.65 (see my dividend analysis of Walgreen Co).

The Money Gardener took Mr. Market up on his sale price of WAG to double his position.

These are interesting times we live in. Stay disciplined.

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3 Responses to ' Market Disconnect '

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  1. The Dividend Guy said,

    on October 2nd, 2007 at 8:58 am

    This was a weird day - happy short tern because I own C, but not sure how the market will view this longer term? We shall see…

  2. moneygardener said,

    on October 2nd, 2007 at 9:57 am

    Not for the faint of heart….

    Thanks for the link.

  3. NeverStopBuying.com said,

    on October 2nd, 2007 at 11:19 am

    2 Canadian bank acquistions today
    TD stock went down 2~3%, while
    RBC stock went up

    What gives…
    I was surprised to see Citi went up yesterday
    Investors are not rational!
    Although the same scenario applied to RIM, when RIM settled the lawsuit with NTP, despite a big settlement, stocks went up due to the clearning of the dark cloud surrounding RIM’s patent

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