COBFInfinity
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Posts posted by COBFInfinity
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Where are you buying it? Are you allowed to buy on the Expert Market?
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On 9/29/2022 at 5:27 AM, Wiggins said:
There are a lot of sealed motions from defendants in the Lamberth trial. I suspect that they're trying to exclude a lot of damaging emails from Treasury and other government officials, stating they aren't official views. That's just a guess but what else could it be? Hopefully at some point some of this information makes it to the jury and gets released to the public. The ulterior motives we've already seen from officials such as Jim Parrot seem relevant to the plaintiffs' side given the "good faith" portion of the contract breach.
I hope we can get some information about the trial as it unfolds. Someone will have to be there taking notes. Anyone that has seen a jury trial up close knows that juries are unpredictable; we have to hope the odds lean heavily toward the plaintiffs.
I hope some investors are still monitoring these boards and also doing well otherwise. And I wish everyone good luck. I miss the great analysis that used to happen here and I hope we can get some more discussion going about the trial. This seems a good place to discuss trial matters and updates.
How big is the jury? How many of them need to agree for a decision?
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On 5/17/2022 at 9:13 AM, DRValue said:
Just more self-serving B.S. He acts like his absurd capital levels have nothing to do with the GSEs staying in conservatorship. And now he's talking again about how the GSEs were looted, a view which he choose not to mention or use to forward his agenda during his leadership at FHFA.
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Any logic for why RSX is trading at a 40% premium to NAV?
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Thompson was asked about timeline for end of conservatorships. She said she'd defer to Congress on that, but that many other parties would be involved. I don't know if she's just appeasing the audience, but that's a pretty lame answer for someone who has worked at FHFA for 8 years.
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19 hours ago, Wiggins said:
The verbiage of this letter is breathtaking (e.g. "steal the retirement of hardworking Americans"). Any press is good press. This is good press and will get at least some traction in the courts and in the news. Expect court filings soon
I know some are excited about the actual legal relevance of this, but I'm not sure it's worth much. Is a court really going to just accept this after-the-fact declaration without depositions of many of the relevant players? Ultimately, we know that Treasury punted, not FHFA. So is Mnuchin going to provide testimony that he really would have agreed to end the conservatorships if he had more time, even though he did actually have the chance to set them on that path at the end of his term and he chose not to? Seems pretty weak.
Separately, is there going to be an inquiry as to how many shares of GSE securities Trump & friends accumulated before this letter was written?
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22 minutes ago, Gregmal said:
And your judgment has led to what kind of performance? I would almost guarantee the political motivated idiot has crushed yours? Which makes you?
It’s amazing people just ignore ideas because they find something to disagree with….or are afraid of out of the box mental exercises. People who have proven to be able to generate alpha trump people who just give a worthless opinion with little else attached to it.
I mean what would you call it if you wasted a significant amount of time and more importantly money being long the GSEs?
Believe it or not, I have a net profit on GSEs right now. Not a good IRR, but life goes on.
And yes, I'm a complete nobody. But you're on a value investing forum promoting chasing the past performance of someone who legitimately believes every conspiracy theory that your uncle shares on Facebook. Do you know how many crypto bros have gotten way richer than Kuppy that I "obviously" should have listened to based on a few good trades?
As others have pointed out, Kuppy has blown up a few times already in the past and I don't know if he was deranged back then or if it is a more recent issue. Anyway, I've made my point. Good luck.
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Gregmal, I am going to upgrade your hero from politically motivated idiot to mentally unstable. I guess your logic is he had some good trades, so just assume he'll have some more. My logic says don't trust the stock picks of someone who lives in a fantasy world.
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1 hour ago, TwoCitiesCapital said:
FNMA spiked 30% today into the close on 3x average volume. FMCC up similarly. I don't see any news or announcements on Yahoo, Seeking alpha, etc.
Is this just random trade activity? Or was something released?
FHFA Acting Director says they will continue to build capital. I guess that's better than the opposite, but the current capital plan is still a dead end.
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3 hours ago, Wiggins said:
My original post on it was actually a comment not a question and I wasn't looking for a debate on whether it was actually happening because I don't think it is. But your comment raises an interesting point which is your assertion that the GSEs are constrained from taking certain actions. I view the GSEs as de facto extensions of the Biden administration given the SCOTUS ruling, and view them as very unconstrained given the SCOTUS ruling. I see any action or inaction as more of a willful choice of the administration, rather than lawful constraints. Perhaps I'm wrong about that. But who would stop the administration from doing whatever the hell they want?
I'm not disputing that it sure seems like GSEs can be treated however the hell any POTUS wants, but securities laws would require any open market purchase program or tender to be announced in advance. Which means the prices wouldn't stay anywhere near 6% of par after such an announcement. All that said, I don't think financial engineering to maximize equity value is part of the plan here.
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12 hours ago, Wiggins said:
Not the same thing. Besides, with Treasury's approval they can basically do anything.
If they finally decide to make a move (the Admin, that is), then it would be a smart move.
You were asking if they might be currently doing it. I said no. Now you're saying they could do it in the future. Those are completely different things. Treasury has not given approval.
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1 hour ago, Wiggins said:
Not sure where your info comes from... HERA? I know they can't get rid of SPS without Treasury approval.
They aren't even allowed to pay dividends, so of course they can't buy the securities. And especially without public notice.
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9 hours ago, Wiggins said:
In the Lamberth case, Plaintiffs and defendants both agree all current stockholders are parties to the case, so Lamberth will likely certify those classes. Perhaps this will give comfort to those wishing to buy. This has been a disappointingly protracted process but I think we can all agree the GSEs are building capital, receivership is in the rear view mirror, and they're here to stay. I feel good about it, just a question of time and timing. On another note, this reminds me a bit of a distressed debt picture where you have shareholders opining that a corporation should buy back corporate debt for pennies on the dollar. That almost never happens (but occasionally does). The GSEs could be buying back preferred shares for pennies on the dollar and retiring them. It would be a smart move but I seriously doubt they're doing it.
Of course they're not buying back preferred shares in the open market because:
A) Conservatorship rules don't allow it
B) Such a program would need to be made public before it begins.
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1 hour ago, Gregmal said:
Yea IDK because I'm not a big fan of following individual people and terrible and tracking the Twitterers. But in the past year of following some of his stiff he has:
-called the BTC rally from 9k to 60k
-then called the exact top
-in between nailed the SPAC bubble top intraday
His fund performance is pretty solid. Additionally he's accomplished quite a bit for a guy his age and on top of it is very down to earth and willing to engage with pretty much anyone. Overall I'd say, and please recommend others if you know of them, the single best person I know who can quickly size up a developing situation and spit out how you can make money from it....a far cry from most who just look at shit, slow as molasses, and then want to do fundamental analysis. So I dont know ones politics but I'd say its pretty irrelevant here. Personally, I have never had a problem generating actionable ideas, but if I did, his weekly idea generator newsletter is totally worth $3k annually. I dont subscribe because if it did I'd probably be like 6:1 levered which is just asking for trouble.
I'd also add that anyone who bought the COVID hysteria got their shit pushed in and likely missed what may indeed have been the single greatest quick money opportunity they'll see in their lifetimes. Like you could have made 50-100% on shit like Google and Berkshire inside of a year if you weren't wrapped up in all the media nonsense.
I have no doubt he has better returns than me lately. I don't do his style of swing trading anyway, so I am not following any of his trades closely and I used to follow his blog but not anymore. But set aside investments for a moment. The point about COVID is that he is still, to this day, on the side of the lunatic fringe saying that it is completely nothing AS A MEDICAL ISSUE. If he is so utterly wrong about something so basic, I find it hard to have much confidence in his judgement on anything else.
It seems like he could be a parallel to Larry Jeddeloh, who was the Director of Equity Research at Leuthold for quite a few years. Now, I haven't seen any of his work in the past decade, but he has run TIS Group for many years and it turns out he is a batshit crazy conspiracy theorist and in the years that I saw performance on his separate accounts, they were quite poor. I have to believe that Jeddeloh had some talent to have been a partner at Leuthold, but it seems the craziness overruled any genius he might have had. So Kuppy may well have a very good knack for some things, but at the same time he is inexplicably divorced from reality on some things. Could be a recipe for crash and burn.
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On 9/21/2021 at 5:49 PM, Gregmal said:
Great quick read. As always, Kuppy nails it. It feels like the engine has been revving on the inflation trade all year, and at some point I think it really takes off.
https://adventuresincapitalism.com/2021/09/20/when-the-levee-breaks/
Hmmm...I know him most for his obsession with shipping stocks that have performed quite poorly. He was also still saying just a few months ago that COVID is just like a typical cold. He has also shared some political views that are completely out of touch with reality (but we won't get into that here.) So I find it hard to accept the "always nails it" narrative.
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41 minutes ago, RadMan24 said:
Is it possible to remove the ads and set up a paypal tip jar virtually?? I'd also be down for that -- even if I shoot you $5 every couple of years
Two people have mentioned ads. I don't recall seeing any ads. Is that for a mobile version?
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Allnatural,
You can't have an NWS 2.0 when NWS 1.0 never ended. The pretend capital account doesn't change the fact that the liability to Treasury is still growing.
As for the FHFA's "expect further action" note, that is interesting considering that Mnuchin had tasked the new Treasury with reviewing the agreements by 9/30. But it also seems very unlikely that anything regarding the Treasury stake would be adjusted in any material way before a new director comes in, so I am curious what that might be.
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On 6/30/2021 at 5:51 PM, orthopa said:
Did FnF get nationalized and their assets liquidated and no one told me? The success and failure of this investment never depended on the SCOTUS and was in all intents and purposes the weakest case of them all. For those who have followed more then casually for 4 weeks should know similar judgemental disappointment occured after the en banc.
The lamberth case and takings case are of the most beneficial to preferred holders. The NWS could/can as it is and the preferred could still end up with more then par. All the cases could go against shareholders and the preferred could get par or a modest haircut in a restructuring.
Anyone here cook up a GSE alternative that finally puts the GSEs out of business and into receivership?
The investment has and still does depend severely on SCOTUS. Plaintiffs could win takings case in front of Lamberth, which gets appealed to SCOTUS, then SCOTUS says no taking has occurred since the shares still have value. Go directly to jail; do not pass Go; do not collect $200.
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37 minutes ago, Gregmal said:
Probably as soon as you're ready to start trading the "Fed Can't Keep Rates Low" theme again. So much of this seems to be about consensus/expectation and the trading thats follows.
I didn't make that trade in the first place. I think rates will still low indefinitely. I have doubts the Fed will raise the Fed Funds rate for many years to come.
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When do you change the headline to "Fed CAN keep the rates low"?
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As for lessons learned, I said a while back that I will never bet on a legal outcome again. Obviously, my conviction on that is even higher.
The other lesson is to stick to contrarian investing. Value investors are constantly bombarded with comments from momentum investors that the way to invest is to buy more as the price increases, that's the market telling you you're right, etc. I have routinely disregarded that viewpoint throughout my years investing, preferring to buy low, and then buy more even lower. But after the 5th Circuit win in Sep 2019, after a pop to around 50% of par, the Pfds I track pulled back to about 45% and I told myself it was just profit taking, this was the moment to buy after the price going up. Those shares are down about 80%. I'm sure some momentum investor will come along and said I should have sold on the way down, but that's not something I do just because of price action. I finally let myself get lulled into the idea that buying high was a good move and it has been a disaster.
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4 hours ago, Sunrider said:
Well, sadly, 10 years later, we now should update the title of this thread to '15 or 16 baggers', which is what some of the prefs now trade at. This one hurt.
I've re-read the delawarebay paper, and the Lamberth opinion ... main worry is
(a) question about whether not only the rights to liquidation preference and dividends travel with the shares but also the expectation of fair dealing (as plaintiffs will be able to show that GSEs were about to be profitable and as a matter of record did not receive anything new in return for the NSW). -> My brain has trouble thinking of how this might practically work if they were divorced, but then again it seems that judges have now split hairs so fine they could circumcise a mosquito.
(b) Sweeney seemed to be balanced and didn't take too much of the government's BS ... not clear what to make of the new judge ... and there seems to be a leaning towards the government once these guys are in the seat, irrespective of what their views were previously.
(c) whether this admin is genuinely interested in getting the GSEs off the government's books (so to speak). If so, then they will work towards recap. If not, they may simply want to speculate that the next crisis requiring a bailout may be a problem for the next guy/girl in the role.
I am tempted to average down, but I am aware that I may just be blinded by commitment bias and the (so far) stupid belief that the land of liberty will eventually conclude that if this all stands, property rights don't matter, and will therefore correct this. Perhaps that is pure naiveté.
On the other hand, one should evaluate investments based on what they offer today. FNMAH at 1.68 is about 1:15. The fact that the total investment IRR after such a long time would be pedestrian doesn't matter, it's a sunk cost. Giving it 3 more years and making 15x does look attractive compared to everything else, but I am genuinely wondering whether this is the right mental model for such a binary situation.
Input welcome.
This 1:15 idea implies that par value is still a realistic target. I think that possibility went to zero yesterday. The best case is plaintiffs win another judgement somewhere along the line and instead of rolling the dice with the same clueless and hostile SCOTUS, a settlement well below par occurs.
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Just wanted to mention for those who weren't watching the price action - the earliest trades after the decision was released caused a pop in common and preferred shares, but then soon sunk. Some investors either jumped the gun after seeing something positive but not going through all the details, or algorithms assigned to decipher the decision got it wrong.
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6 minutes ago, Mephistopheles said:
I know everyone is shocked and upset, but I think the prefs may be a good bet now if you treat them like call options. Right now you can get about 11:1 return (selling for about 8.4% of par). There are still a couple of cases in appeals from my understanding - Lamberth and the Court of Claims. My non-lawyer understanding is that neither of these are related to the SCOTUS ruling today. Meanwhile the companies remain profitable. What's the chance of the call option, with no expiration date, going to zero with outstanding litigation and underlying profitability? Very unlikely IMO.
I'm not saying buy today necessarily, but if they drop further, then at some point you're buying a really undervalued call option that may re-rate to a fairer price. Furthermore, you can do it in a taxable account and if it drops, swap out from Fannie to Freddie or vice versa, and take the tax loss while avoiding wash sale. So not only is it unlikely to go to zero, but you can consistently use it as a vehicle for after-tax losses if needed.
Lol, it was already a call option at 20% of par. Sure, it's cheaper now, but dramatically worse odds of payoff. Even if plaintiffs win another trial, it will end up in front of SCOTUS again in 3-4 years and they can smash it down again.
$KTBA (AT&T/ BellSouth, BBB) 7% '95 in USA: 9.35% Current Yield, 9.35% Yield to Maturity
in General Discussion
Posted
Yeah, there are potentially 2 ways to buy it: You are authorized to trade in the Expert Market because you are a market maker or something like that, or a brokerage firm is allowing you to buy it through them. I used to inquire if there was some way for an individual to get access to the expert market on their own, but no one seemed to know the answer, so I let it go.