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

[tede02]

Looking for a little help here.  I've been going through the entire thread looking for discussion around the differences between the various series of preferreds.  In the first dozen or so pages several people posted attachments with info around this but they are no longer available.  I'm looking at FAIRX's holdings and see that Bruce owns a variety but is most heavily invested in the Series Z Freddie and Series S Fannie.  Any suggestions here?  Thanks in advance. 

[TwoCitiesCapital]

Looking for a little help here.  I've been going through the entire thread looking for discussion around the differences between the various series of preferreds.  In the first dozen or so pages several people posted attachments with info around this but they are no longer available.  I'm looking at FAIRX's holdings and see that Bruce owns a variety but is most heavily invested in the Series Z Freddie and Series S Fannie.  Any suggestions here?  Thanks in advance.

 

You can find a list of all available in the annual reports of the companies. The differences are mostly around coupon, face value, and liquidity. Some of the preferred have higher stated coupons, some have face values of $25 and some of $50, and lastly, some are almost totally illiquid. The lower coupon, totally illiquid, ones are the cheapest. Highest coupon/most liquid are the most expensive.

 

All trade at fairly sizable discounts to their underlying value if the courts rule in our favor. 

 

[Luke 532]

Looking for a little help here.  I've been going through the entire thread looking for discussion around the differences between the various series of preferreds.  In the first dozen or so pages several people posted attachments with info around this but they are no longer available.  I'm looking at FAIRX's holdings and see that Bruce owns a variety but is most heavily invested in the Series Z Freddie and Series S Fannie.  Any suggestions here?  Thanks in advance.

 

Not sure how helpful I'm being, but here's a list of the pref tickers:

http://www.fanniemae.com/portal/about-us/media/financial-news/2010/5086.html

 

It's a question of liquidity vs. price paid as compared to par.

 

If you have a position of size then liquidity might be important to you.

[bmichaud]

Looking for a little help here.  I've been going through the entire thread looking for discussion around the differences between the various series of preferreds.  In the first dozen or so pages several people posted attachments with info around this but they are no longer available.  I'm looking at FAIRX's holdings and see that Bruce owns a variety but is most heavily invested in the Series Z Freddie and Series S Fannie.  Any suggestions here?  Thanks in advance.

 

 

A word of advice that will come across far harsher than it would in person (the #1 problem with this medium), but if you cannot find a list of the securities you more than likely should not risk your capital on them. While tough to receive at the time, I have always appreciated *strong* advice in hindsight...

 

You may not lose your investment, but on the way to victory there will be significant volatility, and if you do not understand the situation you will materially impair your capital by overreacting one way or the other - i.e. you may inappropriately SELL or ADD to the position.

[tede02]

The list is not what I was looking for (it's right on Freddie and Fannie's websites).  I'm just interested in discussion regarding the differences between the various issues to speed up the learning curve a bit, that's all (why do some issues seem to be more popular than others for example).  Thanks guys.

[bmichaud]

You are right - but my point still stands, ESPECIALLY with these securities  :)

[merkhet]

The list is not what I was looking for (it's right on Freddie and Fannie's websites).  I'm just interested in discussion regarding the differences between the various issues to speed up the learning curve a bit, that's all (why do some issues seem to be more popular than others for example).  Thanks guys.

 

It's mostly liquidity that causes some issues to be more popular than others.

[merkhet]

Can anyone confirm that Fairholme shareholders received the following e-mail recently?

 

Dear Shareholder,

 

We are writing to report that The New York Times is gaining traction in its effort to have the U.S. government disclose pertinent information related to the unlawful 2012 “Net Worth Sweep” imposed on Fannie Mae and Freddie Mac. In a memorandum filed by the Times in the Court of Federal Claims:

 

The Government’s effort “to conjure up every possible roadblock to greater public knowledge of [the] decisions and acts” related to the Net Worth Sweep “is both disappointing and based on multiple misconceptions of the law.” The Government “is not concerned with the financial sensitivity of the information, but whether the public will have the temerity to raise questions about the decisions” made by bureaucrats. There is “no doubt that the public has a powerful interest in monitoring this litigation and understanding more fully the consequential decision-making that led to the Conservatorship and the steps taken by the Government in the years that followed.”

 

In a recent op-ed, Yale Law School fellow Logan Beirne urges the government to “end this shroud of secrecy before this farce goes any further.” To read more, please visit: http://thehill.com/blogs/congress-blog/economy-budget/250590-the-future-of-fannie-and-freddie

 

As Bruce wrote in his January 2015 letter to shareholders of The Fairholme Fund: “Sunlight is indeed the best disinfectant.”

 

Sincerely,

 

Investor Relations

Fairholme Funds, Inc.

4400 Biscayne Blvd.

9th Floor

Miami, FL 33137

[PLynchJr]

I got it but I'm not a shareholder...just on the email list.

[merkhet]

I got it but I'm not a shareholder...just on the email list.

 

Interesting. Thanks!

[Luke 532]

What is the motive for Berkowitz to send a special e-mail about the NYT memo?  I'm not an investor in FAIRX... does Berkowitz send out e-mails like this frequently?  If not, I wonder the specific reason (if any) that went through his mind to send out this particular piece of information (instead of any of the other dozen or so recent developments)?

 

Can anyone confirm that Fairholme shareholders received the following e-mail recently?

 

Dear Shareholder,

 

We are writing to report that The New York Times is gaining traction in its effort to have the U.S. government disclose pertinent information related to the unlawful 2012 “Net Worth Sweep” imposed on Fannie Mae and Freddie Mac. In a memorandum filed by the Times in the Court of Federal Claims:

 

The Government’s effort “to conjure up every possible roadblock to greater public knowledge of [the] decisions and acts” related to the Net Worth Sweep “is both disappointing and based on multiple misconceptions of the law.” The Government “is not concerned with the financial sensitivity of the information, but whether the public will have the temerity to raise questions about the decisions” made by bureaucrats. There is “no doubt that the public has a powerful interest in monitoring this litigation and understanding more fully the consequential decision-making that led to the Conservatorship and the steps taken by the Government in the years that followed.”

 

In a recent op-ed, Yale Law School fellow Logan Beirne urges the government to “end this shroud of secrecy before this farce goes any further.” To read more, please visit: http://thehill.com/blogs/congress-blog/economy-budget/250590-the-future-of-fannie-and-freddie

 

As Bruce wrote in his January 2015 letter to shareholders of The Fairholme Fund: “Sunlight is indeed the best disinfectant.”

 

Sincerely,

 

Investor Relations

Fairholme Funds, Inc.

4400 Biscayne Blvd.

9th Floor

Miami, FL 33137

[oddballstocks]

What is the motive for Berkowitz to send a special e-mail about the NYT memo?  I'm not an investor in FAIRX... does Berkowitz send out e-mails like this frequently?  If not, I wonder the specific reason (if any) that went through his mind to send out this particular piece of information (instead of any of the other dozen or so recent developments)?

 

Can anyone confirm that Fairholme shareholders received the following e-mail recently?

 

Dear Shareholder,

 

We are writing to report that The New York Times is gaining traction in its effort to have the U.S. government disclose pertinent information related to the unlawful 2012 “Net Worth Sweep” imposed on Fannie Mae and Freddie Mac. In a memorandum filed by the Times in the Court of Federal Claims:

 

The Government’s effort “to conjure up every possible roadblock to greater public knowledge of [the] decisions and acts” related to the Net Worth Sweep “is both disappointing and based on multiple misconceptions of the law.” The Government “is not concerned with the financial sensitivity of the information, but whether the public will have the temerity to raise questions about the decisions” made by bureaucrats. There is “no doubt that the public has a powerful interest in monitoring this litigation and understanding more fully the consequential decision-making that led to the Conservatorship and the steps taken by the Government in the years that followed.”

 

In a recent op-ed, Yale Law School fellow Logan Beirne urges the government to “end this shroud of secrecy before this farce goes any further.” To read more, please visit: http://thehill.com/blogs/congress-blog/economy-budget/250590-the-future-of-fannie-and-freddie

 

As Bruce wrote in his January 2015 letter to shareholders of The Fairholme Fund: “Sunlight is indeed the best disinfectant.”

 

Sincerely,

 

Investor Relations

Fairholme Funds, Inc.

4400 Biscayne Blvd.

9th Floor

Miami, FL 33137

 

Maybe money is walking out the door and he's trying to keep investors from leaving the fund?  A letter to say "we are close, stick with us" seems to serve that purpose.  Same thing with Sears, the position is hammered and suddenly he's blogging about it.

[Luke 532]

 

Maybe money is walking out the door and he's trying to keep investors from leaving the fund?  A letter to say "we are close, stick with us" seems to serve that purpose.  Same thing with Sears, the position is hammered and suddenly he's blogging about it.

 

That might be it.  Thanks for the input, Nate.

[doughishere]

I got it but I'm not a shareholder...just on the email list.

 

i'm a shareholder. I have not gotten the email. Where do i sign up to be on the list?

[PLynchJr]

I can't remember if I signed up on the site or if I'm still getting them because I was a shareholder (directly through Fairholme) many years ago.

[BeerBBQ]

What is the motive for Berkowitz to send a special e-mail about the NYT memo?  I'm not an investor in FAIRX... does Berkowitz send out e-mails like this frequently?  If not, I wonder the specific reason (if any) that went through his mind to send out this particular piece of information (instead of any of the other dozen or so recent developments)?

 

Can anyone confirm that Fairholme shareholders received the following e-mail recently?

 

Dear Shareholder,

 

We are writing to report that The New York Times is gaining traction in its effort to have the U.S. government disclose pertinent information related to the unlawful 2012 “Net Worth Sweep” imposed on Fannie Mae and Freddie Mac. In a memorandum filed by the Times in the Court of Federal Claims:

 

The Government’s effort “to conjure up every possible roadblock to greater public knowledge of [the] decisions and acts” related to the Net Worth Sweep “is both disappointing and based on multiple misconceptions of the law.” The Government “is not concerned with the financial sensitivity of the information, but whether the public will have the temerity to raise questions about the decisions” made by bureaucrats. There is “no doubt that the public has a powerful interest in monitoring this litigation and understanding more fully the consequential decision-making that led to the Conservatorship and the steps taken by the Government in the years that followed.”

 

In a recent op-ed, Yale Law School fellow Logan Beirne urges the government to “end this shroud of secrecy before this farce goes any further.” To read more, please visit: http://thehill.com/blogs/congress-blog/economy-budget/250590-the-future-of-fannie-and-freddie

 

As Bruce wrote in his January 2015 letter to shareholders of The Fairholme Fund: “Sunlight is indeed the best disinfectant.”

 

Sincerely,

 

Investor Relations

Fairholme Funds, Inc.

4400 Biscayne Blvd.

9th Floor

Miami, FL 33137

 

Maybe money is walking out the door and he's trying to keep investors from leaving the fund?  A letter to say "we are close, stick with us" seems to serve that purpose.  Same thing with Sears, the position is hammered and suddenly he's blogging about it.

 

Do you have a link to the blog post re: SHLD?

[Luke 532]

i'm a shareholder. I have not gotten the email. Where do i sign up to be on the list?

 

http://www.fairholmefunds.com/subscribe

 

Another e-mail was sent out today regarding FNMAS.

[doughishere]

i'm a shareholder. I have not gotten the email. Where do i sign up to be on the list?

 

http://www.fairholmefunds.com/subscribe

 

Another e-mail was sent out today regarding FNMAS.

 

Dont just leave us hanging there. What did it say?

[PLynchJr]

Dear Shareholder,

 

Fairholme’s effort to cast light on the government’s unlawful actions in imposing the 2012 “Net Worth Sweep” is accelerating.

 

In the “Public Redacted Motion for Judicial Notice and Supplementation of the Record” (and two accompanying Appendices, Volume 1 and Volume 2) released yesterday, Fairholme informed the United States Court of Appeals for the District of Columbia Circuit that newly discovered evidence reveals the Defendants have (i) “improperly concealed” documents and (ii) submitted materials to the district court that were “incomplete, misleading, and in important respects, outright false.”

 

Highlights from Fairholme’s Motion include:

 

“…this Court should hold that the Net Worth Sweep is facially inconsistent with FHFA’s and Treasury’s statutory authorities and order entry of judgment for Plaintiffs as a matter of law.  But, even if that were not so, the district court’s decision must be reversed.  As the materials attached to this motion demonstrate, the administrative record submitted by Treasury and the ‘Document Compilation’ and declaration submitted by FHFA in lieu of an administrative record are incomplete, misleading, and, in important respects, outright false . . . the Court must at a minimum remand for further proceedings that account for this newly discovered evidence.” (Pages 1-2)

 

“…the Court should assure that this case is not decided on the basis of a false factual premise and take judicial notice of the existence of the materials in question.” (Page 4)

 

“Materials that have come to light in the [Court of Federal Claims] since the district court dismissed the complaint on jurisdictional grounds reveal that the Defendants’ jurisdictional arguments are premised on a mischaracterization of the relevant facts.” (Page 6)

 

“It is now apparent that those materials, which form the heart of Treasury’s administrative record and FHFA’s document compilation, are in certain respects highly misleading and in others outright false.” (Page 7)

 

“In light of Ms. McFarland’s testimony, Mr. Ugoletti’s sworn statement that neither agency envisioned recognition of the deferred tax assets is not credible.” (Page 9)

 

“Those projections, included in a presentation dated June 12, 2012, say that they were based in part on “Grant Thornton analyses” that Treasury omitted from its administrative record . . . And by the time of the Net Worth Sweep, those stale financial projections had proven to be woefully unreliable.” (Page 12)

 

“The Court should take judicial notice of the fact that these materials exist and that Treasury’s administrative record and FHFA’s document compilation do not accurately represent the true record before the agencies when the Net Worth Sweep was announced.” (Page 14)

 

“The Court should take judicial notice of the existence of documents demonstrating [REDACTED] which Defendants improperly concealed by submitting manifestly incomplete and misleading materials in the district court.” (Pages 16-17)

 

“Documents produced in discovery also confirm that the central defense of the Net Worth Sweep—a purported concern that the Companies’ cash dividend payments would exhaust the government funding commitment—was based on a false premise.” (Page 17)

 

“As the foregoing discussion of the materials attached to this motion demonstrates, Treasury’s administrative record and FHFA’s document compilation and declaration were misleading and, in certain important respects, false, and they obscured the true rationale for the Net Worth Sweep and what the Defendants considered and understood when they imposed it.  It is difficult to imagine materials that go more directly [to] the heart of the matter in dispute in this case, and ‘it would be inconsistent with this court’s own equitable obligations . . . to pretend that [the materials] do not exist.’” (Page 19)

 

 

We are pleased to share these documents and encourage you to review the facts.

 

Sincerely,

 

Investor Relations

[doughishere]

Damn beat me to it. Its kinda juicy. Can anyone put up the "Public Redacted Motion for Judicial Notice and Supplementation of the Record" onto file share?

 

[Luke 532]

Damn beat me to it. Its kinda juicy. Can anyone put up the "Public Redacted Motion for Judicial Notice and Supplementation of the Record" onto file share?

 

https://docs.google.com/viewer?a=v&pid=forums&srcid=MDUxNDQwNjExMTIwMzQzNjc3NDIBMDQ1ODMzNzk5MjUwNjMwMTk0ODQBV2hHWFdReUpCUUFKATAuMQEBdjI

[merkhet]

Would someone be willing to post a PDF copy of that e-mail (you can black out your e-mail address). I might be able to get someone to cover that.

[Grenville]

Would someone be willing to post a PDF copy of that e-mail (you can black out your e-mail address). I might be able to get someone to cover that.

 

Casting_Light_on_the_Net_Worth_Sweep.pdf

[merkhet]

Would someone be willing to post a PDF copy of that e-mail (you can black out your e-mail address). I might be able to get someone to cover that.

 

Thanks!

[Mephistopheles]

Are there any prominent lawyers who believe the shareholders will lose this one? I'd like to read their stuff as a bear thesis. I used to rely on Carney's articles for it but he's been disappointing.