Bought Citigroup on Expectations of European Financial Appeasement

Updating a few trades completed recently.

Today I opened a 2% position in Citigroup (Ticker C) as I expand my exposure to financial companies during the market pullback this morning. My Sagflation thesis has turned inflationary and so I continue to increase exposure to companies that likely benefit from a steepening yield curve. Citigroup's stock was down to start the day largely due to concerns about a solution in Europe. While admitting Europe is a risk to financial markets, I also believe that this week or next Europe arrives at some sort of financial appeasement that satiates the markets for the next couple quarters. I don't expect a solution but instead just enough to make the markets move their myopic focus from Europe. With a forward year PE in the mid-single digits I believe I have some cushion on the downside.

Citigroup Inc. (Ticker: C)

Price Purchased	$30.97	Mkt Cap	$90.8 Billion
52-Wk Low	$21.40	Beta	2.55
CY+1 PE	6.8x	Rating (# of)	Overweight (29)

Citigroup Inc. is a global diversified financial services holding company. Citigroup businesses provide consumers, corporations, governments and institutions with a range of financial products and services. As of December 31, 2010, the Company had approximately 200 million customer accounts and did business in more than 160 countries and jurisdictions.

Kimberly Clark Corp. (Ticker KMB)
Also, yesterday I exited my position in Kimberly Clark (Ticker KMB), booking about a 4% return for holding it about a half year. I exited KMB due to worries that rising prices on commodities may pressure margins going forward. The fact that management lowered revenue growth expectations for 2011 only reinforced my decision to exit the position. My take on the lowered revenue guidance is that competitive pressure is growing from generic brands with lower prices, a concern longer-term.