FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[Seahug]

Under the new admin, will it be easier or harder to settle if we win in court?

 

Won't p's expectations be too high w a win?

[Luke 532]

The Big Short movie (paraphrased)...

 

Vinny: "We sell when the market opens.  30 cents on the dollar.  Not bad."

 

Baum: "They're worth three-times that.  We're not giving out any lifeboats."

 

FNMAS at about 30% of par.

[Guest cherzeca]

Assuming there is remand and not reversal from perry, question is whether mnuchin would see the wisdom of rolling NWS back retroactively so govt's return is 10% thereby making the warrants very valuable. A win/win for govt and investors. Obama/lew would never do that. I don't see how mnuchin gets to no govt control over GSEs without doing that

[undervalued]

Does today's news increases chances of GSE getting out of government hands greatly or higher than before but not much? Anyone adding more because of today's news? Which one is a better buy FNMA or FNMAS?

[TwoCitiesCapital]

Does today's news increases chances of GSE getting out of government hands greatly or higher than before but not much? Anyone adding more because of today's news? Which one is a better buy FNMA or FNMAS?

 

I added after Trump's win, but not adding today. Already had a full position before and just content to let it ride - but yes, I do believe today's appointment increases the likelihood of positive developments for shareholders.

[Luke 532]

See 4:40 mark... http://video.foxbusiness.com/v/5229369696001/?#sp=show-clips

 

Mnuchin paraphrase: "GSE's will be restructured and safe and out of government control.  Top 10 list of things that we'll get done in the Trump Administration and we'll get it done relatively fast." 

[undervalued]

See 4:40 mark... http://video.foxbusiness.com/v/5229369696001/?#sp=show-clips

 

Mnuchin paraphrase: "GSE's will be restructured and safe and out of government control.  Top 10 list of things that we'll get done in the Trump Administration and we'll get it done relatively fast."

 

FNMA or FNMAS? Which one will survive the restructured and benefit most?

[TwoCitiesCapital]

See 4:40 mark... http://video.foxbusiness.com/v/5229369696001/?#sp=show-clips

 

Mnuchin paraphrase: "GSE's will be restructured and safe and out of government control.  Top 10 list of things that we'll get done in the Trump Administration and we'll get it done relatively fast."

 

FNMA or FNMAS? Which one will survive the restructured and benefit most?

 

No one can answer that, but it seems like most of the board leans towards the preferred. Many of us maintain exposure to both for the optionality on the common though.

[Guest cherzeca]

See 4:40 mark... http://video.foxbusiness.com/v/5229369696001/?#sp=show-clips

 

Mnuchin paraphrase: "GSE's will be restructured and safe and out of government control.  Top 10 list of things that we'll get done in the Trump Administration and we'll get it done relatively fast."

 

FNMA or FNMAS? Which one will survive the restructured and benefit most?

 

No one can answer that, but it seems like most of the board leans towards the preferred. Many of us maintain exposure to both for the optionality on the common though.

+1

[gurpaul88]

Common holders must be loving it, 2 bagger less than a month.

[undervalued]

Can we do a quick poll on how much FNMA/FNMAS everyone is holding out of percentage of total portfolio including cash?

 

FNMA: 2%

[racemize]

8% in my insanely aggressive IRA.

[gurpaul88]

FNMAK 2.8%

FNMAJ 4%

 

probably higher now

[onyx1]

I don't see how mnuchin gets to no govt control over GSEs without doing that

 

 

 

 

The last sentence indicates he plans to avoid a fight with shareholders.  Hard to quantify, but anyway you cut it, shareholders win.  Maybe bigley.

[Luke 532]

The last sentence indicates he plans to avoid a fight with shareholders.  Hard to quantify, but anyway you cut it, shareholders win.  Maybe bigley.

 

I think both prefs and common kill it.  It may be important to remember that Mnuchin is on the Board of SHLD with Berkowitz so surely they've discussed Fannie, and Berkowitz only owns prefs.  It's possible Mnuchin converts prefs to common.  I only own prefs.  Just a thought.

[onyx1]

The last sentence indicates he plans to avoid a fight with shareholders.  Hard to quantify, but anyway you cut it, shareholders win.  Maybe bigley.

 

I think both prefs and common kill it.  It may be important to remember that Mnuchin is on the Board of SHLD with Berkowitz so surely they've discussed Fannie, and Berkowitz only owns prefs.  It's possible Mnuchin converts prefs to common.  I only own prefs.  Just a thought.

 

Too many moving parts for me to predict with any conviction.  So, I own both.

[waynepolsonAtoZ]

Thank god, it's no longer just a litigation play (or possibly thank the devil and The Donald).

[undervalued]

Just added another 2% for FNMAS

[TwoCitiesCapital]

Can we do a quick poll on how much FNMA/FNMAS everyone is holding out of percentage of total portfolio including cash?

 

FNMA: 2%

 

As a percentage of total investable assets AFTER the recent run up:

 

FNMAJ: 6.25% in a ROTH IRA

FNMA:  2.75% in a taxable account

 

I'm really tempted to lighten up now that they've become such large positions so quickly, but would nearly kill myself if the preferred did go near par after I've been waiting for so long. Think I'm going to hold off for the next 3 months and wait and see what progress is made.

 

 

 

[Jurgis]

Closing to 5% after current runup.

[CorpRaider]

8% in my insanely aggressive IRA.

 

Noice!

[Packer16]

12.5%of my 401(k) via ownership of Fairholme Fund.

 

Packer

[SnarkyPuppy]

What a day.

[merkhet]

I'm only in the preferred for reasons that I've stated before. Essentially, the distribution of outcomes for the preferred is "tighter" than the distribution of outcomes for the common.

[Guest cherzeca]

Overheard in the D.C. Circuit court of appeals cloakroom:

 

Millett to Ginsburg and Brown:  you hear what that little munchkin fellow said on TV this morning?  That means that we can put this case on perpetual hold and I don't have to finish my dissent, right?  Cmon I mean wtf!