no_free_lunch

Richardgibbons declaring yourself the victor , insulting cardboard and saying the right cant field an argument is very self righteous behavior.

The country list was chosen because obama originally came up w the list. I dont think anyone is arguing it is ideal. Just more politically palatable.

Fair enough, maybe my case is worse. I'm just trying to point out that I don't view it as some black swan but a plausible scenario. If they need to raise equity then why can't this happen? Fact of the matter is there is no equity in fannie. Even if NWS is reversed there is no equity. It's not really a taking just what it is. If they only need to raise $60b equity and some of that comes from new preferred's and you get a $150B market cap then you will probably do okay in the preferred's. If they decide they want $120B in equity (they don't want this coming back on them and that is around what they drew in 08/09, maybe a bit less) then it will get ugly. However, the preferred's are already heavily discounted so maybe not the end of the world. The more I think about it, the more I think the lower interest rate preferred's might be the better buy.

It is funny how all of a sudden the left is concerned about Russia. Nobody seemed to care when Ukraine was invaded or Syria crossed the red line. It seemed it was the right pushing for action. Now suddenly Russia is a big issue since the left can attack with it. It just shows how unprincipled these guys are.

I just haven't done the work on RGR yet. AOBC has a PE backward or forward of around 8-9. It looks like RGR is around 12-13. Entirely possible that RGR is the better investment but I haven't been able to figure out why RGR is more expensive. My preference would be that we identify 3 or 4 decent companies and I just build a basket.

That is worst case scenario rat for sure. However I don't think it's too likely. What I see is a more likely scenario (I don't know the odds but may 1 in 3) where it is released but the terms are such that equity is nearly wiped and preferrred's are getting 10 to 20 cents on the dollar. If they have to raise a lot of equity and the government considers it's warrants ahead of the preferred's it could get ugly.

Good dig. I bought more but at $18.50. Now a 2% position. I don't like that there is so little moat within this industry, so I think I will just leave it as a smaller position. I keep thinking that these firearms were produced 100 years ago with very similar designs. I am really just trusting to the historical precedent that they have maintained good margins and the low price. Having read a bit more, the speculation is that weak 2017 guidance pushed the price down. So there was something behind it. However, apparently they have a history of delivering low estimates and then exceeding them. Current quarter EPS was about 20% higher than average forecast for instance. There is a decent seeking alpha article on it if anyone is interested.

AOBC released earnings. Revenue up 11% for the quarter ending Jan 31. So this takes into account 2 months post election. If the bear case was fear of firearm legislation then this provides evidence against that. Still not sure about the company in general, whether this is a good industry that sort of thing but at 8x basic earnings per share the future is heavily discounted. http://www.nasdaq.com/article/american-outdoor-brands-aobc-tops-q3-earnings-up-yy-cm755911

Flynn, it's just a reference to the original infowars story. You really need to see this on different media outlets to take it seriously.

Personally I bought in after Mnuchin's comments in November so haven't been holding for years and years. There is just more information available now than then. I am not a lawyer but ripping through the legal documents it sounds damming, the government is within it's jurisdiction based on some legislation from 08/09 and arguments regarding the legality of NWS or just about anything else are irrelevant is what I got. So I have that info, I didn't have it before and the price is the same. I am also concerned that with all the problems Trump is running into as far as pushing his agenda forward he might have to make compromises. This could be one of those compromises. However, still long, still hold preferred's but just not as confident as I used to be in the outcome.

Common or prfd? Preferred. Mostly T series. I just don't like all the ways that we can "win" and still do poorly on the preferred's. If they stop the NWS but not retroactively and we have to rebuild capital, we might lose. If they convert the preferred's and then exercise the warrants we lose. If they convert the preferred's under difficult terms we might lose. Whatever, I am not bearish overall as I still have a 3% position but I couldn't keep it at 6% of portfolio.

Sold half my position. I bought in in December and sold at effectively the same price which is unfortunate. However, with the court case going the way it did I feel getting even money out is a good deal.

This is the thing. At the end of the day if it was really being leaked by the WH then it would be leaked to multiple sources. If you don't see it more wide spread soon then it's made up.

Can't believe we are quoting infowars on this site but I have to admit it's a good link. Too early to tell but this could be part of the narrative shift. I would watch for this to appear on breitbart.

I think that taxes are very low in a lot of banana republics Not ARE low, are being lowered. That's the difference. No one in a real banana republic is thinking of stimulating the economy by shrinking their own piece.

Probably one of the first banana republics to do wide spread tax cuts.

To continue my last comments. I can see firearm sales continuing to do well. Not 100% certain but it seems more likely than not. However I am not sure which companies will benefit. I did some digging on AOBC and have a small position but I am not crazy about the company. Yeah they have done some share repurchases but also they have been acquiring. Acquisitions are not always bad but unless management is exceptional I prefer organic growth. At least with the acquisitions they are trying to diversify. It is definitely cheap on a PE basis, probably around 8.5-9x and maybe a bit higher to free cash flow. However there is also a lot of competition. So it is sort of some good, some bad, etc. However, at the end of the day it should probably trade at a higher valuation if sales don't plummet, or even stabilize 10-15% lower than they are now. If sales stabilize at current levels they could probably trade 50% higher or closer to where they were earlier this year. Since I am not crazy about any one company, perhaps a basket approach is best. Any suggestions to add to the list?

The way I see it, this is happening one way or the other. With or without AOBC & RGR. I also believe that it's criminal to prevent people from having a firearm given the gun violence levels you see in some areas. I agree, I should have elaborated but that was the point I was trying to make.

I am with basically everyone here, there is too much that has happened that it's hard to ignore. I don't like doing business with people who won't admit a mistake. FFH tries to emulate Berkshire but yet misses the key ingredients of humility and consistency in investment approach. I think if the ffh bet is now long the market while their equity selection under performs then aren't I better off with an index fund? At least VT is clear on what they own and why. :)

There are some good FBI stats on firearm background checks here: https://www.fbi.gov/file-repository/nics_firearm_checks_-_month_year.pdf/view You can see in the link that there wasn't any kind of dip when Bush took over. There was a steady increase after Obama took over but then the numbers were already ramping up during the last few years of the Bush jr presidency. I have also read that there may be increased efforts at the state level to introduce gun control laws now that national efforts are shut down.

https://www.bloomberg.com/politics/articles/2017-02-17/kushner-s-use-of-u-s-backed-apartment-loans-poses-conflict-risk This is both good and bad. Good in that it argues against a wind down of the enterprises. Bad in that it doesn't help with public perception. Overall though, net positive.

Started a position in AOBC. This is just Smith & Wesson after a name change. RGR is no doubt a great brand but it's a bit harder to get a handle on their financials.

Can't believe I am referencing them but there was a good vice video on gun ownership in America the other day. I can't seem to find the link and their site is down, perhaps I will add it later. The key take aways I got: - They break out gun ownership by ethnicity and it is roughly 40% of whites, 20% african american, 20% latinos families own a firearm. So maybe not a completely tapped out market. - Since election, vice claims, gun clubs for minorities have seen surges in membership. I am interested in this industry and will be investigating. Some ethical issues here for sure, I will have to think about that.

There was an article out today with greenspan where he said an alternative to financial regulation is for financial companies to just hold more equity. If Mnuchin put in place fairly high thresholds of equity would that not address much of the concern about the government having to backstop them while also getting them out of conservatorship? It would also be relatively easy to set in place. It also can be deemed as going after equity holders from an optics perspective. Of course for the same reaons not so great for equity holders but it's such a profitable enterprise it would still be okay for them once they build up the capital.

Very interesting Luke. His comment that FHFA would have approved the language change was informative. I am trying to stay impartial here but it just keeps adding up. If the plan was to wind down fannie/freddie, I don't think they would be considering repealing NWS.