Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3323706 times)

DRValue

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13160 on: July 23, 2019, 12:35:58 AM »
The budget deal should be good news. That's one huge item off of Mnuchin's plate.

Awesome. I didn't think they'd get it done. I was going to post about it yesterday but didn't cos of that.

Imo it definitely needed sorting before moving on the gse's. If it passes the house this week, after the senate next week we should be good to go on reform plan release.

I expect Calabrias movement on plan release date could have been due to uncertainty of when the budget would pass.
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Steve_Berk

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13161 on: July 23, 2019, 01:08:14 PM »
I wish you would. I know some didn't like it, but I appreciated it. for those who don't like technical analysis, they can just skip it, right?

@MM

all I think I have seen in last couple weeks is one signal (2 month delay in treasury plan) and a lot of noise (mostly gaspo).  to me there is no story here in this deepish drawdown over past week and some impressive fight back today (again, both mostly gaspo driven to the extent I can pinpoint anything).  I was wondering if you think today's action (up 7% in fnma) is inconsequential or meaningful from a TA perspective. and why?

I am comfortable with the notion that the market is can be an emotionally wrought system at times, and certainly this investment can move willy-nilly at a drop of a hat at anytime...which is why I try to focus on FA.   but curious whether you think this 7% retracement after a weekend to think about things has changed your views on the name

I will message you. I am not gonna talk about TA here anymore.

Ahab

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13162 on: July 23, 2019, 02:10:54 PM »
Ditto, you have a different approach then most of us MM, but it adds to viewpoint diversity.
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muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13163 on: July 23, 2019, 06:14:09 PM »
Ditto, you have a different approach then most of us MM, but it adds to viewpoint diversity.

You should not need view point diversity. All you need to do is to find out what best works for you, and keep improving on that.
What I see from some folks here are the short comings:
1. Do a small amount of research, and instead of working out various scenarios, just focus on the optimal scenario (Par value, Par value, Par value!)
2. When things go against him, rationalize on why it is still a buy, and possible even a better buy here.
3. Tell himself to never sell, because that means lack of conviction.

The greatest traders do really hard work, and be open minded about the various outcomes, while amateurs do small amount of lousy work, and be rigid about the outcome. When other people mention different alternative outcomes, he immediately treat these people as threatening, and use hostile languages against them, which is a reflection of his fear against these possible outcomes.

I've been learning investing since 2009. The above is exactly what I was doing myself for the first 9 years. I am no longer making these mistakes. My previous posts only served one purpose. I wanted to use this real time example to show people what mistakes they could be making, and how to fix those, and also use this live example to remind myself never to repeat these mistakes again. A few people got pissed. That's fine. Mr. Market will teach them.
I am muslceman. I have more muscle than brain!

buffetteer1984

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13164 on: July 23, 2019, 07:09:09 PM »
I appreciated your TA and felt it gave a different perspective on the "trade".  But honestly, if you want to message people privately that is fair but enough with the condescending remarks. 

Ditto, you have a different approach then most of us MM, but it adds to viewpoint diversity.

You should not need view point diversity. All you need to do is to find out what best works for you, and keep improving on that.
What I see from some folks here are the short comings:
1. Do a small amount of research, and instead of working out various scenarios, just focus on the optimal scenario (Par value, Par value, Par value!)
2. When things go against him, rationalize on why it is still a buy, and possible even a better buy here.
3. Tell himself to never sell, because that means lack of conviction.

The greatest traders do really hard work, and be open minded about the various outcomes, while amateurs do small amount of lousy work, and be rigid about the outcome. When other people mention different alternative outcomes, he immediately treat these people as threatening, and use hostile languages against them, which is a reflection of his fear against these possible outcomes.

I've been learning investing since 2009. The above is exactly what I was doing myself for the first 9 years. I am no longer making these mistakes. My previous posts only served one purpose. I wanted to use this real time example to show people what mistakes they could be making, and how to fix those, and also use this live example to remind myself never to repeat these mistakes again. A few people got pissed. That's fine. Mr. Market will teach them.


Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13165 on: July 23, 2019, 09:33:19 PM »
What I see from some folks here are the short comings:
1. Do a small amount of research, and instead of working out various scenarios, just focus on the optimal scenario (Par value, Par value, Par value!)
2. When things go against him, rationalize on why it is still a buy, and possible even a better buy here.
3. Tell himself to never sell, because that means lack of conviction.

The greatest traders do really hard work, and be open minded about the various outcomes, while amateurs do small amount of lousy work, and be rigid about the outcome. When other people mention different alternative outcomes, he immediately treat these people as threatening, and use hostile languages against them, which is a reflection of his fear against these possible outcomes.

Enough with the passive-agressive comments. Name names. Which posters are guilty of which shortcomings, and what evidence do you have to support your claims? What specific posters are you referring to in the last part? Please be very specific.

I've been learning investing since 2009. The above is exactly what I was doing myself for the first 9 years. I am no longer making these mistakes. My previous posts only served one purpose. I wanted to use this real time example to show people what mistakes they could be making, and how to fix those, and also use this live example to remind myself never to repeat these mistakes again. A few people got pissed. That's fine. Mr. Market will teach them.

Again with the schadenfruede. Mr. Market doesn't seek out individuals for punishment. You seem to want an impersonal force to do personal harm, all for the imagined slight of not agreeing with you.

You even said this in a previous post.

Quote
For me, I welcome any criticism

Your most recent post, and your earlier one wishing that Mr. Market will slap down those who (in your imagination) slighted you, starkly disagree with this.

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13166 on: July 23, 2019, 10:09:07 PM »
Midas, I made a mistake and should not have said these words, ok? Does that calm you down and make you feel better?
I was lucky to be trained by a great trader and this is the way he communicates with me all the time, and I never felt his words were "passive-agressive" or "condescending" a tiny bit. If you feel it differently, then I apologize.
I never thought I needed to "name names", and "refer to specific posts", because I thought people need to ask themselves what they need to improve. By asking me to "name names", and "refer to specific posts", it is just another way to defend themselves and say, no, you are wrong, I am not doing anything wrong. Then another round of rationalization. There is no point of doing that.

Perhaps a nicer way to say this, and more acceptable  to most people is this: Do you think your current strategy and process has any shortcomings that you could improve after the recent GSE down turn? Can we have an honest discussion about this? To those really long term investors, maybe there are none. Maybe they are already doing well, and they are confident that they can continue to do well. But are there anyone who think they found some shortcomings in their existing process who wants to list it here for an honest discussion?
I am muslceman. I have more muscle than brain!

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13167 on: July 23, 2019, 10:17:23 PM »
Ditto, you have a different approach then most of us MM, but it adds to viewpoint diversity.

You should not need view point diversity. All you need to do is to find out what best works for you, and keep improving on that.
What I see from some folks here are the short comings:
1. Do a small amount of research, and instead of working out various scenarios, just focus on the optimal scenario (Par value, Par value, Par value!)
2. When things go against him, rationalize on why it is still a buy, and possible even a better buy here.
3. Tell himself to never sell, because that means lack of conviction.

The greatest traders do really hard work, and be open minded about the various outcomes, while amateurs do small amount of lousy work, and be rigid about the outcome. When other people mention different alternative outcomes, he immediately treat these people as threatening, and use hostile languages against them, which is a reflection of his fear against these possible outcomes.

I've been learning investing since 2009. The above is exactly what I was doing myself for the first 9 years. I am no longer making these mistakes. My previous posts only served one purpose. I wanted to use this real time example to show people what mistakes they could be making, and how to fix those, and also use this live example to remind myself never to repeat these mistakes again. A few people got pissed. That's fine. Mr. Market will teach them.

I have been thinking about your posts, MM, which first of all I hope encourages you to post more if only for my benefit, and I want to react in the way that I find useful for me, which is a journal-type entry trying to understand something through writing it out.  better on a BB where people can respond than in some private journal.

GSE junior preferred is a bet that a contractual right to receive $25 will prove out, and it is interesting given its current discount.  now, if the business is faltering such that par is unrealistic, that would be one reason not to invest, but the GSE business is stellar and for my money not a substantial risk factor.  not many companies that I can find that I have as much trust in future business prospects as the GSEs.., assuming of course that they are not wound down, which was a real issue in the past as we all know.

so the GSE pref is an unusual investment, offering the potential for significant appreciation (common like) without the presence of substantial business risk (assuming that the GSEs are not killed by congressional fiat).  the legal issues are complex and multiple, and I have gotten comfortable with my analysis that the legal process will favor the junior prefs holder...at some point. lord knows, the point that I expected has long passed but my legal conviction is still steady.

there is a lot of political risk of course to contend with as well, and this could be the topic of a separate thread, but the trend of political action has been positive.  still much to see re treasury plan and FHFA capital level, but if you can be patient, I sense the trend will unfold in a reasonable fashion.

all of this is to say that what I think what might happen in the future is not necessarily gleaned form the past.  I still dont understand how TA can help me understand the future by looking at the past because in this situation, which is very atypical, the past is full of surprises (for instance, who would have expected a democratic Obama administration to have been so hostile to GSEs, which are an important source of financing for low-income Americans, or that a republican administration would have a treasury secretary who actually understands that the GSEs cant be wound down, like the Obama policy shitheads blithely suggested, and should be the source for future benefit for the housing industry)...so how can a past surprise provide predictive value...by definition the past surprise was unexpected based upon its own view of the past...or else it wouldn't have been a surprise.

so while I dont see FA being a very good predictive tool to analyze this investment (given the difficulty of predicting future events in such a turbulent investment situation), it is just that I dont see TA being applicable to this situation at all, since I dont see future events bearing a close relation to past history in the investment.
« Last Edit: July 23, 2019, 10:28:25 PM by cherzeca »

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13168 on: July 23, 2019, 10:49:12 PM »
I was lucky to be trained by a great trader and this is the way he communicates with me all the time, and I never felt his words were "passive-agressive" or "condescending" a tiny bit. If you feel it differently, then I apologize.
I never thought I needed to "name names", and "refer to specific posts", because I thought people need to ask themselves what they need to improve. By asking me to "name names", and "refer to specific posts", it is just another way to defend themselves and say, no, you are wrong, I am not doing anything wrong. Then another round of rationalization. There is no point of doing that.

No, I just want to know exactly who it is that you're hoping that Mr. Market will slap down and why. That's the part of your post (and your previous one) that I mainly take exception to. The hostility is unnecessary.

Also, this "great trader" of yours was talking only to you. He didn't need to name names.

Perhaps a nicer way to say this, and more acceptable  to most people is this: Do you think your current strategy and process has any shortcomings that you could improve after the recent GSE down turn? Can we have an honest discussion about this? To those really long term investors, maybe there are none. Maybe they are already doing well, and they are confident that they can continue to do well. But are there anyone who think they found some shortcomings in their existing process who wants to list it here for an honest discussion?

My reaction to this recent downturn isn't nearly as severe as yours. To me it's only a blip, and not even a big one. I barely blinked when the original Perry appeal came down, even though I lost 40% on paper in one day, because the overall thesis hadn't changed: There Is No Alternative.

I am in this for the long haul. It has only been about 3 years for me so far, small change compared to many, but even if it takes another 5-7 I will still make a good return overall. I trade around small pieces if I see price discrepancies, and while this has been a decent money-maker for a couple of years, it is not the core of my position and doesn't affect my thesis. I know you have expressed incredulity at some posters' lack of an exit plan, but I am in the illiquid prefs because they offer the best return to par and I don't really care about liquidity.

If the thesis is severely challenged then I will think about exiting, and my trading gains should offset the losses I would take due to my position being illiquid. But I bought in mid-2016 when Obama was still actively hostile to FnF and it looked like Hillary would take the White House and continue carrying that torch. It would take a change in events to a state worse than that to get me to reconsider the overall thesis. The political and legal climate are far more favorable now than then.

My existing process is hold on to what I have bought. The only possible change to that process is to sell some. That involves either trying to time the market or being better at interpreting news than others in the short term. I don't have a reason to believe that I have an edge in either of these things, they are outside my circle of competence as it were.

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13169 on: July 24, 2019, 03:46:25 AM »
I miss the old days when it was all court cases and all politicians were bastards. Sweeney did legal work for the intelligence services and is meticulous. She's slow. No one has any idea of the timing of En Banc either, contrary to all kinds of weird statistical analyses that are being posted on message boards. Please just get on with discussing the facts of the court cases, laws, and political power games. Small example: does anyone know more about why Gasparino is now the spokesman for insiders in the administration? And why he posts both positive and negative news? Never seen that before. It's curious. He engaged with John Carney and Joe Light for a while, then went out of step with them.

All TA does for me is analyze buying and selling behavior. If you want to connect political/press-related/financial events to it after the fact, and hold a victory lap because you think you had an insight, power to you. But I suspect it simply doesn't help others much because it can only inform them of buying and selling behavior. Go and trade. I'm pretty sure LittleDevil always debated with my nickname on his face.

We're all betting on TINA, that the only satisfaction for all stakeholders seems to be a utility model (taking into account the guarantee, optics as well as finance), the fact that the political game can set things into motion, and the fact that we have a contract with the US government that was grossly violated. Maybe we can all trade a bit when we know news is not substantial but does cause price movements. That seems to be about it.

I stand ready to be corrected and to be informed of more than I know.