Saudi Prince Very Close

Prince Alwaleed bin Sultan,a leading investor in U.S. companies,has been expressing his thoughts about the state of the country he clearly feels deeply involved with.The prince,who will be 55 in March,said he's not sure the U.S. is on the right track.It is down,but not out.Mr.Obama needs more time.He has a tremendous amount on his plate:the deficit,the health care situation,as well as the financial crisis.There are so many issues under the table:Social Security,Medicare-they are time bombs.I'd like to get health care behind us and focus on job growth and the Middle East,Prince Alwaleed remarked.
President Obama has to prove he is as tough as former president George W. Bush was,the prince feels.The U.S. cannot be at all lenient on terrorists.Thank God their latest attempt was prevented.On the other hand,profiling is wrong.Remember Oklahoma City bomber Timothy McVeigh?Are all Oklahomans terrorists?the prince asked rhetorically.
Prince Alwaleed,a slight man with a full head of salt-and-pepper hair,owns 5.7% of NewsCorp,parent of Fox News and The Wall Street Journal.He considers it an alliance.It's a core,strategic investment that will never be sold,he insisted.It's a well-run empire by Rupert Murdoch and son James.Prince Alwaleed also owns stakes in Time Warner Communications and Citigroup.The owner of a stable of fine horses,the prince is more than an investor in the U.S.;his evident passion and knowledge confirms that he is also a close friend of America.

Citigroup Tagged By Credit

Credit losses weighed down Citigroup's Q3 earnings.The company lost 0.27 cents a share.CEO Vikram Pandit said that,while consumer credit trends are improving internationally,the U.S. environment is still challenging.Citigroup experienced eight billion dollars in net credit losses.There was some improvement in late stage delinquencies,but there was still some stress in early stage delinquencies.Citi wrote down losses in leveraged loans,and it is likely that toxic asset losses will never be recovered.
The U.S. government owns a one-third stake in Citi,and Citi must pay the government and other investors dividends on preferred stock holdings.Prince Alwaleed bin Talal of Saudi Arabia,one of Citi's major shareholders,has urged the government to divest its position as soon as possible.This is unlikely to happen for some time,however,out of an abundance of caution.
Despite Citi's problems,Deutsche Bank has initiated coverage of the stock with a buy rating,and a target price of 5.50 a share.Citi did realize a Q3 profit of 101 million-much better than last year's Q3 loss of 2.8 billion dollars.An independent evaluation approved of Citigroup's management.

A Big Investor's View

Prince Alwaleed bin Talal of Saudi Arabia,a Citigroup investor since 1991,described Citi as a core investment for him.The fact that CEO Vikram Pandit was left in office proves that the government doesn't want to run the company.I expect to see Citi's dividend raised in three years,the prince said.Until then,we are prepared to accept the dividend cut.We need to give Mr.Pandit some time.He's a man of a mission,of strong vision.Citi is still far from being a nationalized entity,Prince Alwaleed insisted.The deal allows a bounce-back if the markets improve.Frankly,the recent share price destruction is the fault of Citi's previous management,His Royal Highness observed.

Shop Talk

Hello to the U.K.,where I advertised this week.The U.K. and the rest of the world are focused on a truly global firm today,Citigroup,whose stock has fallen below five dollars a share.One of the most impressive aspects of the news is the loyalty of Citi's investor, Prince Alwaleed of Saudi Arabia.His Royal Highness has not only not sold his stake in the financial giant;but increased it from less than four up to five percent.He is more than an investor;he is a great friend.Anyone with an interest in the firm should be thanking Prince Alwaleed for being indefatigable.If only the trading floor of the New York Stock Exchange were inspired by his judgement,instead of bolting like a herd of crazy buffalo.