4 November 2007: Citigroup's Chuck Prince steps down
Citigroup chief executive Chuck Prince resigned at an emergency Sunday board meeting as the bank warned of up to $11 billion in additional subprime-related writedowns. Just months earlier he had famously said that as long as the music is playing, you have got to get up and dance. Citi's troubles were only beginning, and within about a year it would need a massive government rescue.
The lesson: Dancing because everyone else is dancing is not a risk management strategy.
What it meant for investors
$1,000 in Citigroup at the start of 2007 → $182 today, vs $4,789 in the S&P 500.
We start the clock at the start of 2007, the year it happened. That is a loss of $818, while a plain index fund over the same years made $3,789.
What Citigroup teaches: When a stock falls more than 90 percent, it must rise more than tenfold just to get back to even; some losses are effectively permanent.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2007 | $550 | $182 | $4,789 |
| 2008 | $290 | $345 | $4,626 |
| 2010 | $33.00 | $3,030 | $6,071 |
green = beat the S&P 500 · red = lost money
What if you bought Citigroup? Every starting year and the full story →
More Citigroup history
- 6 April 1998: Citicorp and Travelers announce the merger that made Citigroup
- 12 November 1999: Glass-Steagall's wall comes down
- 23 November 2008: The government throws Citigroup a lifeline
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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