I think the appreciate we're seeing now is due partly to the NYU lectures and additionally in anticipation of Q3/lawsuit progress.
It's only a matter of time now before a lawsuit comes to the decision that Fannie/Freddie should give some form of compensation to private shareholders.
The current gridlock on GSE reform doesn't seem to be budging, so it's likely the government will be forced to act to comply with the law.
Watch the NYU law lectures, it doesn't take a law professor to realise that the private shareholders got royally screwed during the downturn as the big banks mis-sold mortgages and now the only party gaining with the appreciation/settlements in these assets is the US Gov.
You could pull the example of the GM bondholders, as they got screwed by the US Treasury. However, in this case, winding down Fannie/Freddie doesn't seem so attractive considering they are 70% of the mortgage market at the moment. (Liquidity would dry up). In the case of GM it was going to be thousands of workers losing their pensions.
Google releasefanniemae, they've got a list of all the court dates and progress
Picking the right security for an investment is hard enough (A good investor is looking at a 60% hit rate). Trading these securities is just going to lead to you incurring big commission costs. Think about it, are your resources for trading/monitoring the market better than a financial institution that makes the market in it? No. This is why retail investors get burnt, because they think they're going to make millions pressing buy/sell.
(I used to work in Asset Management)
How are you stupid? You're still up 766%. Do you consider that a poor return?
Did a summer internship. Back to my final year doing a masters degree in Engineering at Imperial College London.
4th Year Civil Engineering Undergrad at Imperial College London,
Worked last summer as an Equity research analyst for a big Asset manager.
GM Bondholders got screwed, FnF equity holders could easily get the same. (This was a clear break of securities law) You need to keep this in mind when investing in FnF, they're either worth $10+, or very likely $0. FnF public perception is dreadful and they need to be changed, even if only by name. DeMarco has clearly stated he will inact no change to conservatorship until the congress reform FnF. Equity can't build up in the firms due to the sweep. I like the preferreds, but I see real risk in the common being made worthless.
*fed refrains from qe taper, keeps monthly buying at $85 bln
*fed: rise in mortgage rates, fiscal policy restrain growth
*fed: `tightening of financial conditions' could slow growth
*most fed officials see first interest-rate rise in 2015
Berkowitz was implying the court would come to a decision invalidating the Third ammendment to the Treasury Preferred. Thereby, returning to previous Div + warrents structure.
I sold my shares at 2.31. (Bought in 18600 at 1.18). I realise that this could easily go a lot higher but bullishness is getting a bit crazy in FnF and risks remain extremely high (Even if many of you seem to think this is risk-free). Wish you all the best. Will buy back in if there's a meaningful correction.
Well I bought 18600 shares at 1.18. It's now at 2.35 and I'm up close to 100%. If I had traded, I'd have most likely missed out on quite a bit of those gains. I'm not saying trading is wrong, but consider whether it's actually adding value or whether it's just luck.
Day traders would have sold for a 1c gain and moved onto some other pump/dump. Long term investors will have seen the appreciation to 2.35
They were higher in the bankruptcy food chain and still got screwed, really just shows the US Government's ability to break securities law. I totally agree that it is anti-capitalist/anti-american but FnF have terrible PR images and they can't remain in their current firm (Even if it's just a name change). Someone had to be the scapegoat for the US financial crisis and unfortunately its the firms that are the least culpable (FnF).