In this video, I will be comparing the investment merit of Bank of America Corp. versus Citigroup Inc. I will be comparing these two money center banks and evaluating them based on income, growth, and total return potential. Of course, the primary factor to determine which I consider the better investment will be based on valuation. A better valuation can be a real equalizer. When valuation is attractive it provides the investor a better margin of safety, greater current income, and the opportunity for a better total return and a much lower level of risk.
A second benefit of this video will be the clear perspective of the importance of business results relative to shareholder returns. If you are a long-term investor, as I believe most people should be, then business results will be the primary determinant of how well the investment performs on your behalf. Nevertheless, this principle mainly applies when valuation is either sound – or better yet – attractive. In the long run, earnings determine market price. Consequently, when you see a FAST Graph with earnings and price correlated, the evidence becomes clear and indisputable.
FAST Graphs Analyze Out Loud Video Citi and Bank of America
