I think the idea of buying Citi is a good idea in theory, but I have to agree with jackg in that the housing market has not fully bottomed and will not bottom for many months. Some analysts say it may not even do so until next summer. Some markets still have plenty of people who are trying to sell their properties that they overpaid for at pre-bubble bursting prices. Until these morons wise up and lower their asking prices to a reasonable level, they will simply sit on their properties until they are fed up or foreclosed upon. This will also make potential buyers all the more hesitant. You can tell just by looking through some asking prices for people in DC and Chicago and LA, that there are still plenty of morons out there asking way to much and frightening off buyers. Until housing turns around, any bank play is iffy at best.
Personally, I think the turn around for Citi and most financials in general will take longer than the one year you predicted. It may take two years or more. But I agree with you in thinking that Citi will easily get back to $50 a share in due course. It just might take a little more time. If you have the patience to wait it out that long, I am sure you have to patience to wring a couple more bucks out of the buy price, maybe even to the $18-$19 dollar range. And then just sit on that 6% dividend and pray that ole Vikram Pandit doesn't cut it on you.