Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3083897 times)

SnarkyPuppy

  • Hero Member
  • *****
  • Posts: 756
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12190 on: April 17, 2019, 07:02:31 PM »
In the past when I was a value investor, I'd be upset and swearing why the hell I miss the bottom, and since it is up so much from the bottom, I would not touch it now unless it goes back down there. A lot of times it just never comes back down, and I would see the stock going up 100% without me. Eventually I decided to give up value investing because it is so out of sync with my genetics.

MM, re-read what you said in this paragraph.  I think you DO have the makings of a successful value investor if you are able to overcome the emotional struggle of not catching the bottom.  Look, I've been there.  It stinks paying more today for something I could have had cheaper yesterday, but it is what it is. Why not pay 10% or 20% more over and above the bottom price when the stock, as you've experienced a lot of times, would double from the low?  Is that additional 80%+ not worth trying to work on the emotional discipline of getting over the disappointment of not catching the bottom?  I would think you'd agree that it is a worthwhile discipline to try to get a handle on given you were in the right place at the right time a lot of times... but missed it because of something that you can work on with some effort.

Thank you for your kind words. I have tried this for 8 years and in the end, realized that I am not suitable for it. I've known lots of kind people who were willing to help, including an analyst from Lu Li's fund, but that's ok. I really like what I am currently doing with technical analysis and trading, and happy with it.

How did you get in contact with an analyst from Li Lu's fund?


muscleman

  • Hero Member
  • *****
  • Posts: 2980
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12191 on: April 17, 2019, 07:13:43 PM »

How did you get in contact with an analyst from Li Lu's fund?

The analyst is my buddy's MBA classmate.
Lu Li moved to Seattle last summer. I work in a company that rented a few floors in a big building that a few other companies share with. Lu Li rented one floor as well. I have even met him and his two daughters once in the elevator and shake hands with him.  :)

Jcmeg35

  • Newbie
  • *
  • Posts: 15
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12192 on: April 22, 2019, 10:09:25 AM »
For those that have not seen it:
https://www.wsj.com/articles/trump-appointed-official-promises-full-push-to-overhaul-plumbing-of-mortgage-market-11555938001

I am curious as to others' thoughts are on what Calabria thinks Congress needs to act on? Is this statement related to new charters for other guarantors or something else?

Excerpt:
"Part of his job, Mr. Calabria said, will be urging Congress to act, since there are limits on what the administration can do with Fannie and Freddie absent legislation

“A lot of responsibility lies upon Congress to get us to a different model,” he said. “And I think we should go to a different model.”"

rros

  • Hero Member
  • *****
  • Posts: 937
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12193 on: April 22, 2019, 10:16:48 AM »
For those that have not seen it:
https://www.wsj.com/articles/trump-appointed-official-promises-full-push-to-overhaul-plumbing-of-mortgage-market-11555938001

I am curious as to others' thoughts are on what Calabria thinks Congress needs to act on? Is this statement related to new charters for other guarantors or something else?

Excerpt:
"Part of his job, Mr. Calabria said, will be urging Congress to act, since there are limits on what the administration can do with Fannie and Freddie absent legislation

“A lot of responsibility lies upon Congress to get us to a different model,” he said. “And I think we should go to a different model.”"
Charters and paid-for government guarantee may require legislation. Modifying PSPAs doesn't (commitment fee, nws, etc.).

cherzeca

  • Hero Member
  • *****
  • Posts: 1876
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12194 on: April 22, 2019, 11:06:20 AM »
For those that have not seen it:
https://www.wsj.com/articles/trump-appointed-official-promises-full-push-to-overhaul-plumbing-of-mortgage-market-11555938001

I am curious as to others' thoughts are on what Calabria thinks Congress needs to act on? Is this statement related to new charters for other guarantors or something else?

Excerpt:
"Part of his job, Mr. Calabria said, will be urging Congress to act, since there are limits on what the administration can do with Fannie and Freddie absent legislation

“A lot of responsibility lies upon Congress to get us to a different model,” he said. “And I think we should go to a different model.”"
Charters and paid-for government guarantee may require legislation. Modifying PSPAs doesn't (commitment fee, nws, etc.).

"Charters and paid-for explicit government guarantee may require legislation".  I think Calabria's willingness to do an interview on day 1 is good, as is his desire for Treasury to lead off the festivities with its plan.  recapping and releasing GSEs will be done w/o congressional action, but congress will be pissed and will want to be told by Calabria all of the things it can do post release (ie competition), none of which can be expected to happen given current political polarization.  so Calabria is wise to this (former senate staffer) and will keep talking about future plans while recap and release proceeds administratively
« Last Edit: April 22, 2019, 11:08:06 AM by cherzeca »

rros

  • Hero Member
  • *****
  • Posts: 937
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12195 on: April 22, 2019, 11:31:25 AM »
For those that have not seen it:
https://www.wsj.com/articles/trump-appointed-official-promises-full-push-to-overhaul-plumbing-of-mortgage-market-11555938001

I am curious as to others' thoughts are on what Calabria thinks Congress needs to act on? Is this statement related to new charters for other guarantors or something else?

Excerpt:
"Part of his job, Mr. Calabria said, will be urging Congress to act, since there are limits on what the administration can do with Fannie and Freddie absent legislation

“A lot of responsibility lies upon Congress to get us to a different model,” he said. “And I think we should go to a different model.”"
Charters and paid-for government guarantee may require legislation. Modifying PSPAs doesn't (commitment fee, nws, etc.).

"Charters and paid-for explicit government guarantee may require legislation".  I think Calabria's willingness to do an interview on day 1 is good, as is his desire for Treasury to lead off the festivities with its plan.  recapping and releasing GSEs will be done w/o congressional action, but congress will be pissed and will want to be told by Calabria all of the things it can do post release (ie competition), none of which can be expected to happen given current political polarization.  so Calabria is wise to this (former senate staffer) and will keep talking about future plans while recap and release proceeds administratively
Precisely! (explicit/ may)...
This will be the year.

cherzeca

  • Hero Member
  • *****
  • Posts: 1876
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12196 on: April 22, 2019, 11:56:29 AM »
For those that have not seen it:
https://www.wsj.com/articles/trump-appointed-official-promises-full-push-to-overhaul-plumbing-of-mortgage-market-11555938001

I am curious as to others' thoughts are on what Calabria thinks Congress needs to act on? Is this statement related to new charters for other guarantors or something else?

Excerpt:
"Part of his job, Mr. Calabria said, will be urging Congress to act, since there are limits on what the administration can do with Fannie and Freddie absent legislation

“A lot of responsibility lies upon Congress to get us to a different model,” he said. “And I think we should go to a different model.”"
Charters and paid-for government guarantee may require legislation. Modifying PSPAs doesn't (commitment fee, nws, etc.).

"Charters and paid-for explicit government guarantee may require legislation".  I think Calabria's willingness to do an interview on day 1 is good, as is his desire for Treasury to lead off the festivities with its plan.  recapping and releasing GSEs will be done w/o congressional action, but congress will be pissed and will want to be told by Calabria all of the things it can do post release (ie competition), none of which can be expected to happen given current political polarization.  so Calabria is wise to this (former senate staffer) and will keep talking about future plans while recap and release proceeds administratively
Precisely! (explicit/ may)...
This will be the year.

this tracks from the POTUS memo, which asks for treasury to address in its plan the need for an explicit or implicit guarantee.  I may be reading too much into this, but this says to me that the administration is serious about moving forward with an administrative recap/release plan since it knows it cant do an explicit guarantee without congress and knows that the major complaint is that the federal charters imply a federal implicit guarantee, so POTUS is saying fine the GSEs will have to pay for the implicit guarantee, pay for their charters in effect. 

orthopa

  • Hero Member
  • *****
  • Posts: 638
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12197 on: April 22, 2019, 01:26:42 PM »
For those that have not seen it:
https://www.wsj.com/articles/trump-appointed-official-promises-full-push-to-overhaul-plumbing-of-mortgage-market-11555938001

I am curious as to others' thoughts are on what Calabria thinks Congress needs to act on? Is this statement related to new charters for other guarantors or something else?

Excerpt:
"Part of his job, Mr. Calabria said, will be urging Congress to act, since there are limits on what the administration can do with Fannie and Freddie absent legislation

“A lot of responsibility lies upon Congress to get us to a different model,” he said. “And I think we should go to a different model.”"
Charters and paid-for government guarantee may require legislation. Modifying PSPAs doesn't (commitment fee, nws, etc.).

"Charters and paid-for explicit government guarantee may require legislation".  I think Calabria's willingness to do an interview on day 1 is good, as is his desire for Treasury to lead off the festivities with its plan.  recapping and releasing GSEs will be done w/o congressional action, but congress will be pissed and will want to be told by Calabria all of the things it can do post release (ie competition), none of which can be expected to happen given current political polarization.  so Calabria is wise to this (former senate staffer) and will keep talking about future plans while recap and release proceeds administratively
Precisely! (explicit/ may)...
This will be the year.

this tracks from the POTUS memo, which asks for treasury to address in its plan the need for an explicit or implicit guarantee.  I may be reading too much into this, but this says to me that the administration is serious about moving forward with an administrative recap/release plan since it knows it cant do an explicit guarantee without congress and knows that the major complaint is that the federal charters imply a federal implicit guarantee, so POTUS is saying fine the GSEs will have to pay for the implicit guarantee, pay for their charters in effect.

Do you feel like the WH will act in short order once presented with plans from Treasury/HUD in June-ish time frame from article? This incessant urging and waiting for congress to act/help although good lip service is getting very tiring. 

The non optimistic part of me see this whole process easily continuing back and forth until the fall. Govts only seem to react to deadlines and the next will be the re election campaign. 

A part of me also reads the article layout with a time line very convenient for the en-banc opinion either positive or negative.
« Last Edit: April 22, 2019, 01:32:40 PM by orthopa »

cherzeca

  • Hero Member
  • *****
  • Posts: 1876
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12198 on: April 22, 2019, 02:09:21 PM »
@orthopa

been thinking about this. 

my best guess at moment is that i) Treasury will produce a roadmap/plan without too much specificity, but enough for it to say, ok it is time for us to hire an investment banker, and ii) say to FHFA (or fhfa will simply pronounce on its own), ok it is time for fhfa to require each GSE to come up with a capital restoration plan (required under HERA), and iii) each GSE will then hire its own investment banker to do this, and iv) fhfa will announce the capital targets that the GSEs will be required to shoot for.

this will be a dance that, while orchestrated, will look like Treasury is doing only what it should do and FHFA will do only what it should do, and then the collection of investment bankers (and lawyers, all will hire lawyers) will work as a team to get the recap done.  in reality, there will be much cross-checking in the background.

« Last Edit: April 22, 2019, 02:55:32 PM by cherzeca »

orthopa

  • Hero Member
  • *****
  • Posts: 638
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12199 on: April 22, 2019, 02:47:18 PM »
@orthopa

been thinking about this. 

my best guess at moment is that i) Treasury will produce a roadmap/plan without too much specificity, but enough for it to say, ok it is time for us to hire an investment banker, and ii) say to FHFA (or fhfa will simply pronounce on its own), ok it is time for fhfa to require each GSE to come up with a capital restoration plan (required under HERA), and iii) each GSE will then hire its own investment banker to do this, and iv) fhfa will announce the capital targets that the GSEs will be required to shoot for.

this will be a dance that, while orchestrated, will look like Treasury is doing only what it should do and FHFA will do only what it should do, and then the collection ton of investment bankers (and lawyers, all will hire lawyers) will work as a team to get the recap done.  in reality, there will be much cross-checking in the background.

Otting said capital rules by July-ish correct? So hopefully we are getting to some of the more specifics of a framework by then.  If things start falling in line the June-Sept time period should hopefully be eventful.