Stay Out of the Citi

(Editor's Note: RealMoney is free to all TheStreet.com readers until Monday night. We hope you enjoy this article. If you would like to subscribe to RealMoney, please click here.)

Everyone, everywhere I go wants to own Citigroup (C - commentary - Cramer's Take). I am not kidding.

I am down at the Coca-Cola 600 in Charlotte, N.C., a big fun NASCAR race, and people keep asking, "How about it? How about Citi at $21?"

It would be darned tempting if -- and this is a big IF -- they were asking about selling it, not buying it.

No, I am not saying to bet against the everyday working person. I am saying that in 1990, when Citigroup bottomed, nobody -- not institutions and not retail -- had any desire to speculate or invest in the darned thing. It was beleaguered, bedraggled and ugly. It was left for dead.

Now, all it has going for it is the piecemeal selling of divisions and the endless capital raisings. It is being run by a hedge fund manager who has distinguished himself by getting the direction wrong at a crucial moment. And Citi has a hedge fund that was every bit as stupid as the Bear Stearns (BSC - commentary - Cramer's Take) funds that started that company's slippery slope down -- except the problems occurred a year later when the "trade," in which you levered up short term to buy lower-quality assets in order to capture the spread for an easy percent a month, was so discredited that I can't believe Falcon was still playing that game.

I think that this stock is one that you leave alone. You can buy Wells Fargo (WFC - commentary - Cramer's Take) if you really believe in a mortgage turn. I think it is possible if we get $300 billion from Congress for the FHA, as it would make a great deal of difference to head off more foreclosures and forced supply on the market. Citigroup is not as good a bet on that turn as Wells Fargo.

You can buy JPMorgan Chase (JPM - commentary - Cramer's Take) if you think it will happen, as you will get a nice increase in market share. And you can buy Bank of America (BAC - commentary - Cramer's Take) if you believe because of Countrywide Financial's (CFC - commentary - Cramer's Take) potential turn, although that's a real stretch.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.