orthopa

Any reason to not add more at this point? Both preferred and common both still below par value and projected diluted value for common. Obviously reversal of current thought, momentum etc but can the future be any more clear then what Mnunchin said about privatization?

Who do you guys think holds more sway with Donald Trump? The hedge fund/money guys that he knows and helped get him elected....or political people/factions within the government? It seems to be if Fannie/Freddy were hated so bad and wanted to be dealt with why didn't legislation go through? Weren't a couple of the bills that were drawn up bipartisan? What was the issue? I don't think now that congress is republican it changes things much as you probably wont find an administration that had it out for the GSE's more then Obama, Parrott, Sperling etc. If the GSE truly wanted to be gotten rid why didnt it happen? I understand that a certain treasurer could be very good or bad for FNMA/FMCC but could it be any worse then what shareholders have been dealing with for the last 8 years with the Obama admin? If the treasury appointments are not favorable then turns back to a litigation story and not an event driven story.

Old article and we knew Icahn had a position but remember this was the guy who left Trumps party early to invest a billion dollars. http://www.forbes.com/sites/nathanvardi/2014/06/03/carl-icahn-joins-bill-ackman-in-bet-on-fannie-and-freddie/#25ea267f326b

I have looked in a couple places and couldn't find what Paulsons holdings are. If memory serves its preferred correct?

Excerpts from the Huffington post article “John Paulson made a big bet on Donald Trump’s campaign and it’s going to pay off in a big, big way,” said Michael Kink, president of the Strong Economy for All Coalition that sponsors the group Hedge Clippers, which investigates hedge fund influence in American politics. Through the DCI Group, Paulson and other big investors in Fannie and Freddie have hired economic experts, including former Clinton administration honcho Robert Shapiro, to pen papers favorable to their cause. They’ve paid money to civil rights groups to sign their name on to policies that would benefit the hedge funds. This type of shadowy blending of private profit and the public interest was a centerpiece of Trump’s campaign, as he vowed to “drain the swamp” and put an end to corruption in Washington. But the Trump campaign has been filled with DCI Group alumni throughout the election. Former DCI Group lobbyist Doug Davenport was traveling with the Trump campaign as an advisor. Jim Murphy, former president of DCI Group, was hired as Trump’s political director in June, but departed with 18 days to go on the campaign. Joining Paulson on the Trump transition team is another supporter of his favored Fannie and Freddie policy: former Ohio Secretary of State Kenneth Blackwell. The far-right politician was tapped to lead Trump’s domestic policy transition team. In 2014, while working for a nonprofit founded by investors in Fannie and Freddie stock, he penned many op-eds calling for the hedge fund-backed policy of recapitalization and release. Trump has routinely sided with the hedge fund campaigns throughout the campaign. The Republican Party platform enacted at the Republican National Convention in Cleveland included support for the recapitalization and release of Fannie and Freddie. He also endorsed the hedge fund campaign to pressure Puerto Rico to pay back debts to them first.

250k a crack dinner Fireside chat in September I think one is very naive to think that Trump isnt VERY aware of Paulsons', Berkowitzs', and Icahns' FNMA, FMCC positions and how he could reciprocate. Not to mention the guy who likely raised 10's of millions for the president elect is an adviser on housing. Its almost too obvious.

If you are a shareholder, your cash holding can be just this much. I'm near certain that I would pee away more of it than the Omaha boys. +1. Tough to get that kind of discipline. Agree. Just need to keep it black and white in regards to valuation. Surely no crisis now. Perfect time to just keep building cash but tough as value can be so easily self perceived.

In taxible account PM MO V BP BRK-B AIG-WT FNMA FNMA preferreds

Would need significant evidence of e car adoption and then there is run off of current as vehicles. Looks probably be quite a ways off at this point.

Yes it is. The main capitalization is the government guarantee. I am no expert on this matter, but I think the preferred will notwork out. I don't understand the legal issues very well, but my 10000 foot high perspective goes like that: 1) You are suing the US government on technicalities. Fannie and Freddie were broke many times at the time they were seized. now, they are profitable, but possibly because they have access to cheap capital, due the government guarantee. The lawsuits will be endless, because the government will not easily accept a loss. 2) If the lawsuits do work out and Fannie/Freddie do become private again, they need to raise a lot of capital. More expensive mortgages would be a huge political issue and not likely to happen. The government will compete with them, by opening up a government sponsored institution doing the same thing, capitalized with $1 US, and a guarantee by he US government. Good Luck competing with that. If you don't understand the legal issues then this entire investment should make no sense to you. Very specific actions are being challenged here nothing of which you summarized . This isn't an investment where a 2 bullet point summary and general understanding will suffice.

Visa testing blockchain technology now as expected. http://seekingalpha.com/news/3206533-visa-looks-harness-blockchain-technology

In this market I find most stuff compared to historical multiples to be very fairly valued to over priced. My assumption that this "new normal" is due to super low interest rates. When I look at a stock now and find it on the higher side multiple wise in the back of my head I find myself saying... Well interest rates are super low... Same effect to what was cheap and expensive in the late 70s/early 80s with stocks trading at mid single digit multiples. Not sure if this is right or wrong thinking and then how to account for it? Any opions on this? Who knows how long interest rates will stay low for but if it's "years" my assumption is that most failrly valued to expensive stocks will get even more expensive making It even harder to find fair valuations In an environment with a 3-4% 10 yr treasury yield I bet everyone of my dividend stocks is 25-30% cheaper. Question I struggle with in regards to valuation is when will that occur again?

I added to both common and preferred today, both additions were below my avg cost so I was able to avg down even near the highs of the day. My reasoning is that these docs make a plantiff decision more favorable then yesterday before the docs were released. Reading the emails are disgusting. You don't have to be a shareholder to see that this county is run by a bunch of dishonest thieves. Its amazing the U.S. has grown into the country it has when there have been so many scumbags through its history. I think the more these documents come out the more the govt leans towards a settlement. This makes the treasury, FHFA, and the office of the president look so dishonest.

You can tell Corker takes this personally. He says FnF cost tax payers 189B and then Ackman said, yes and were paid back 260B and Corker quickly moves along. He didnt seem to have a good retort or want to continue that part of the discussion. Corker says Congress is going to "reform" FNF over the next 2 years. Ill take the over on that one. Rhetorical question but...Why are hedge funds making $$ so bad?

So more documents are going to be coming out?

I dont know shit about law and appreciate the law stuff you guys work through and granted some has been very in depth and theoretical and I think thats where some have become leary about plantiffs chances. As a non law lay person this stuff is just flat out lying. Ulogetti signs one thing then says he doesnt know. "a former Treasury official who was a former special adviser to the director of the Federal Housing Finance Agency, the conservator overseeing Fannie and Freddie. In December 2013, Mr. Ugoletti signed an affidavit for the case stating unequivocally that neither the Treasury nor the Federal Housing Finance Agency envisioned that the companies’ deferred tax assets were about to be reversed in the months leading up to the profit sweep, generating huge profits. He also said that the move was not intended to “increase compensation to Treasury.” But in the deposition in May, Mr. Ugoletti said he did not know whether the Treasury or the Federal Housing Finance Agency officials knew about the potential for the profits at Fannie and Freddie at the time of the sweep." Unbelievable.

Questions is... Does this change the % chance of favorable plaintiff outcome and do you increase your position with both the common and preferred trading a low levels as a result?

Did the UST plan on giving all of that business to the big banks all along? I forget the name of the guy who was accused of playing both sides of the fence ie the gov and big banks but that would make sense if he played a large roll as suspected in the negotiations. Maybe Berkowitz's lawyer did give him a wink at some point after all...

Looks like they made a few documents public. This will make Friday very interesting. Was just going to post something to this effect. Looks like @JoshRosner and @gmorgenson on twitter have posted some of the documents. One of his tweets say 3rd amendment to PSPA a political sham to hand over GSE business to big banks and that UST knew Fannie and Freddie would return to profitability and death spiral a lie.

I booked min middle of feb, Buffalo to omaha, 2 hour layover in Detroit, friday through sunday at a countryside and rental car entire time 1200 total for two people booked through priceline. I had the samething happen to me with priceline so cleared my cookies, and went back and got it at the original price again.

author states: "There are some pitfalls, though. For one, current investors in Fannie and Freddie, many of whom have mounted vigorous legal challenges to the government sweeps, would probably be out of luck" obviously she doesnt understand that if NWS invalidated, govt will have to buy shareholders out...which is why this plan will go nowhere. govt only wanted to set stage for reform by paying zip to public shareholders through NWS. when govt goes to plan B, i dont think it will want to pay the price...especially to greedy hedge funds (like you and me...ha!) Yep thats what I was thinking.

http://www.marketwatch.com/story/this-plan-to-overhaul-fannie-mae-and-freddie-mac-just-might-pass-congress-2016-03-24

My .02 as I think this is a great exercise to improve. I have a hard time selling a position that has appreciated thinking it will continue to remain over valued. Unless the story has "changed" things should continue right? Problem is the downturn is often very violent. Thankfully I have missed out on JCP, ZINC, VRX, SHLD, OUTR and the like. Maybe it was luck but didn't past my gut test or I didn't feel like I understood them and the story to make it a large part of the portfolio. Laziness may have protected me here somewhat. What I find hardest is sitting and doing nothing. Letting cash build and just waiting. This is what "alot" of the greats do, Buffet, Klarman and it is hard since it feels like one always needs to be doing "something". Cash just sits there and earns nothing but much better then losing $$$. I believe it was munger who said sometimes your best investment is not making one. FWIW I think a lot of recent mistake some have made is because the market is not cheap. This is a slow/frustrating time for truly value investing or buying with a good MOS so right away a lot of great businesses that are not candidates. You then widen your circle of competence to start to include some more risky investments. I also think there is a lot to be said for boring investments. If the business is very simple to understand it takes a lot out of the equation and I think the number of risks to the business is less as a result. Valuation plays the larger role. In a more complicated investment there are many more moving parts and much more to understand and get right. Valuation becomes a smaller part of what you need to get right in addition to many other things. A small change in one of those many things can could really decrease the value of the business. Hard I think for most people to counter act that with research. I have made the mistake of taking a position or wanting to buy a company and then using figures/valuation ranges that fit my thesis. Not the other way around. I have also cornered my self in positions such as OCN with a simple thesis that proved very wrong. "I convinced myself that someone had to service these mortgages and no one can do it more efficient then OCN." It cost me 3% of portfolio as a result. When the facts change, time to get out. I also find myself thinking its better to get 8-9% a year plus 3-4% in divs from a boring steady investment with a very high probability of success then finding that gem that "could" compound at very high rates with synergies, acquisitions, all of which will eventually justify the premium being paid, etc. Definitely always learning and trying to improve that for sure.

I like trump and I think the reason he has so much support is because he puts it out there the way it is and ALOT of Americans have hidden behind political correctness because they were embarrassed to seem "racist" "prejiduce" etc. I think there are many people who in public willnot say they do not like " radical muslims", "mexicans" etc but will vote in a manner that limits the freedom they have to abuse immigration etc. Some very general statements I think many Trump supporters agree with but as a society we have danced around because it wasnt "PC" include. 1. If your overweight your fat and its your fault. Thats it, unless you have a medical condition (I would be well aware of it, and there aren't many) its your fault because you have chosen the diet and put the food in your mouth. If you cant fit in a seat at the ER because its too small, the hospital doesnt need to get a bigger one, YOU need to lose weight. You should also pay more for healthcare because your costing the system more. Anyone who doesn't agree with above, know anyone who has been force fed into obesity? I dont. 2. We should take care of the disabled, retarded, etc but everyone else should have limited access to life long social programs. If your able bodied get out and work and get off the system. These people who abuse the system should be harassed, not coddled. 3. If you come into the country illegally against the law leave. Anyone have a good reason to tolerate illegal immigration? If you have skills and are beneficial to the country great, if not and doing it illegally makes it even more intolerable. 4. All lives matter, We are all human. Black, white, brown, asian etc doesnt matter. Get over it. Blacks kill more blacks then anyone else. Don't give these people a stage. 5. If you have been greatly wronged by society( don't exactly know what this would be ) then you should get help to get on you feet. Otherwise you have had access to a free education up to grade 12 that has in most cases allowed you to take as much advantage as you may have wanted. You also had an opportunity to further your life either in trade/college loans/scholarships etc. If your in your late 20's/30's and things arent going your way the first person to look at is yourself. 6. No one "deserves" anything free. Yes help those in legitimate need. Any suggestion it is being abused and it is taken away. 7. If you want the privilege of public assistance then you have to take a drug test/prove your looking for work/no criminal record etc. If not its stealing from those who aren't of public assistance. 8. If China/Russia are abusing us in trade/politically we become less tolerant. Not turn and look the other way and hope it goes away. 9. Taking from haves and giving to have nots doesn't work. First maybe as I person I should figure out why I am a "have not". Its unlikely its someone else's fault. 10. Being successful isn't evil and should be a goal. Instead of criminalizing successful people, question those who have a problem with others success and position. Not necessarily my views but I think this is a small sample of why Trump resonates with many of people.

FWIW and Im catching up here but I think the preferred is trading based on whether or not it will pay a div after. (I have no idea or strong feeling if they will or will not). I base this on the fact that those preferreds with a higher original dividend are trading at a clear premium to those that had a variable or lower div. Liquidity as in the case of FNMAS supports some premium too but doesn't explain the clear difference based on original yield.