Sunday Funnies: Was the Citigroup Board really in the dark?

Several weeks have passed and I still can't help thinking about how tough it is to invest in individual stocks and how many ways there are to be blind-sided. When the Board of Citigroup (NYSE: C) finally asked for the resignation of CEO Chuck Prince at an emergency Sunday meeting, after the company announced that an earlier released figure of a $6.5 billion write-down was actually going to be $11 billion, were they surprised of just disgusted?

Was that the last straw or were they in the dark as to the magnitude of the losses. As investors we have to consider a vast array of issues to determine if a company is worthy of investment. I know most people do not, but lets give them the benefit of the doubt and say they do. So you look at the sales and services offered, the quality of management, the various performance metrics like P/E, P/S, P/B, ROE cash flow, debt and more. You may look at the macro economic environment, interest rates, even the weather but in the end what do you know?

After you analyze everything you can get your hands on you are still just giving it your best shot (in the dark) and hope for the best. If the Board of Citigroup can't keep track of it's own company, its management structure, its risk analysis and it's exposure to major market conditions that will greatly affect the company, how are we supposed to?

Just one more good reason to stay diversified. If you are not, you should give that as much consideration as you do any individual investment. Was the Citigroup Board really in the dark? I don't know, but you should not allow yourself to fall prey to their folly.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.