DocSnowball

On a more realistic level, how about Mnuchin simply declares the Sr. shares extinct as the funds have been repaid. Then, institutes a commitment fee for the remaining 258 billion and going forward all Fannie and Freddie have to pay is that fee for that commitment, a fee for that taxpayer support? This will set the course for a Moelis/admin restructuring, be inline with the SPSPAs and continue to reward taxpayers for their support. The real signals versus the noises Watt is making

I’m sorry if this is late, just catching up and heard Watt’s testimony. Questions as a non expert, if I ask nicely maybe the experts will help me clear my doubts Watt, a Democrat, has been in his role for 3 years, and the capital decline to zero is exactly as planned. So why the sudden cry about creating a buffer from him? What was the expected outcome from his standpoint if his party had won after Jan 2018,and how has that expectation changed? Is he trying to repeatedly go to legislature to achieve something? I’m confused - how can the same conservator who has been hand in glove with Treasury for all these years be our friend now. I don’t get it, but I’m a novice. The best that I can understand is he is documenting the work FHFA has done as regards Fannie and Freddie, and that too in front of the legislature. Why? How does this end, and can Watt stop a restructuring from happening - he has seen the Moelis plan among others and has a yay or nay opinion about it. What outcomes benefit him? Defense if accused of looting the enterprises? Edit:@1:03 ‘I don’t think that has anything to do with winding down or not winding down the GSEs. I don’t see anything in my statute that requires me to wind them down....If Congress wants to wind down,then Congress should wind down the enterprises’ 1:33 capital discussion: 2-3%

I had the good fortune of studying Value investing from him @ U Mass Amherst two years ago. It was a very nice book for a beginner like me, he uses it as text for the course. Some of the highlights: 1) a nice introduction about how to start looking at investments in your circle of competence - chapter on The art of looking 2) A final paper we had to write in semi-checklist format that one could use for life - loosely based on the chapters in the second half of the book 3) Debunking of the modern portfolio theory, in favor of a concentrated portfolio of carefully selected securities Enjoy!

Also, in the two scenarios in the Moelis blueprint, the one in which Govt ends up with $100 billion is also the one where commons achieve the higher valuation, as compared with the $75 billion scenario

Yea I've actually noticed that the most popular ideas/threads here(outside of BRK&FF), the ones with a million comments and everyone frothing about the value, are largely major duds. Definitely some psychological stuff behind it. SHLD and VRX probably the most glaring recent ones. I'll even add in FELP, which while the original posters made money, I'd presume there are a lot of bagholders who got carried away and are now underwater with the stock off 50% from the highs. People get way too attached and biases are deadly. There is no law of gravity that says price will always catch up with intrinsic value, or do so in a short time frame. That may be why those threads were so belabored. It's the catalysts that are also important that bring price to value. IMO one has to think what the catalysts will be here, and be prepared for that timeline.

As Professor Damodaran would say, it is a "slow learning Market" given how many times we've been burnt before, and this is the time to correctly allocate your position or additionally do some information arbitrage trading if that is what your thing is...

So if rights of shareholders are respected, then commons are not worthless? Can commons still go to zero if rights are respected?

Healthcare does suck financially and the wages of physicians in cognitive or non procedural specialties have been lagging inflation for over a decade now. It is very rewarding when you help people but earnings don't really increase with time, just flatten out and lag inflation. However it does remind me of the scene in The big short when before the house of cards tumbled everyone was out there being a real estate agent or flipping homes. This bull market can make investing look very easy, until it is not. As in the title of the thread, it isn't easy to "just say no" There are over a hundred physicians in my MBA program alone @UMass, myself included, so going for non clinical work is a hot topic right now, investing included. Personally I've been a keen student of investing for only two years now, and until one has seen a few cycles and downturns not sure what one's skill level and behavioral aptitude is like. The best thing imo is to have a rewarding day job that brings in steady cash flows and benefits and invest on the side rather than giving it all up. Just like being a scientist makes one a better physician, being a good investor and capital allocator makes one a better physician leader

I appreciate this quote more than most, methinks :) +1

Paratek pharmaceuticals PRTK - successful drug trials for the first new once daily iv and oral drug for pneumonia in over a decade. Up 30% year to date for me, and on the block for an auction like buyout by big pharma. Undervalued still because 1) FDA killed a competitor drug earlier this year (Solithromycin from Cempra) which scared the market but actually will benefit this company in the long run. 2) higher than expected nausea and vomiting rate in the latest oral only skin infection trial, but very very few patients needed to stop the drug and no increased serious side effects Baupost is second largest institutional investor and the CEO is positioning the company very well to survive any scenario. Heads you win another 50% plus this year if buyout by big pharma, tails this at least doubles over a longer multi year horizon from cash flows it brings back to the firm.

Going through his Investment philosophy course this month which is very helpful as well INVPHIL by New York University (https://itun.es/us/JlRBP) https://itunes.apple.com/us/course/id695120611

Small successful biotech up for auction now, love it!

No competence to answer your question but did allocate a third of my preferred via Fairholme to reduce the risk of greenmail or this kind of outcome

I see it here at #24, and they added to their position https://m.holdingschannel.com/13f/baupost-group-llc-ma-top-holdings/

Just a minor query - Paratek pharmaceuticals (PRTK) shows Baupost group as the second largest institutional holder owning over 8% of the company, but it is not listed in this anywhere. Any idea why?

Thanks for sharing. What is the best place to park the cash in the meanwhile, as executing this strategy for me seems to be on a 3-5 year timeline.

Seems unlikely any movement will occur before tax reform.

Mnuchin Committee on Financial Services hearing @2.01.00 onwards - all he agrees to is that there should be no implicit government guarantee if Fannie and Freddie are re privatized,rather an explicit guarantee. Comments on GSEs at 40.00 as well

This thread has been my education as a value investor!

Allocation/ Tax related question: if Moelis plan comes to fruition, or preferreds get converted to commons, will it be a taxable event? Trying to figure out whether this long term investment is best in the tax deferred account or the taxable one? Thanks in advance!

Really well done - waiting to see what the official response from FHFA and Treasury will be, if any. Until we know how this will end, it's all speculation

This one is much better written! https://finance.yahoo.com/news/fannie-mae-freddie-mac-privatized-164500868.html?.tsrc=applewf

More Paratek pharmaceuticals (PRTK), after successful trial results of their once daily iv and oral antibiotic for both pneumonia and cellulitis. Mr Market was in an obliging mood today! A reference (not by me) Dissecting And Analyzing The Special Situation In Paratek Pharmaceuticals, Inc. $PRTK http://www.seekingalpha.com/article/4037356

Connecticut

I share that feeling! Still have to think the preferreds are high uncertainty but low risk in the long term. That part of the thesis has not changed imo