Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 4172709 times)

Wiggins

  • Full Member
  • ***
  • Posts: 105
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12400 on: May 16, 2019, 01:09:23 PM »
My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting.

Exactly. His job is done. Everyone signed off remember?

cherzeca, I bet you like this part of the article.

"Mr. Phillips and other Treasury officials have been meeting with the biggest American banks to determine how best to raise capital for Fannie and Freddie — a prerequisite to releasing them from government control — as well as how the housing finance system might be restructured, according to two people who participated in the meetings."

There is the news they are lining up the bankers. Another check on the list. Mnuchins goal of within 6 months or by the end of the year seems intact.

Question for me would be do any of the big preferred holders have influence on "Americas biggest banks"?

Can't help but think of John Paulson and Goldman Sachs being thick as thieves - literally - on the infamous ABACUS deal and subsequent lawsuits. This is where JP netted nearly a billion dollars in a single transaction.
« Last Edit: May 16, 2019, 02:08:37 PM by Wiggins »


Ahab

  • Full Member
  • ***
  • Posts: 136
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12401 on: May 16, 2019, 01:43:39 PM »
@Midas
I also often find that Fanniegate comes across as annoyingly naive. Yes, I feel common holders got shafted. No, the common share prices aren't going to be worth $100 next year, barring God himself demanding it from the U.S. Treasury.
Gasparino is amusing, I consider him to be a national treasure. No other financial reporter is so consistently wrong on the hot stocks of our era. Whether it is Fannie Mae or Tesla, Gasparino can be counted on to provide bad internet banter.
Long: FNMAT, FNMAN, FMCCL, FMCKO, BAC, JPM, GOOG, JD, MO/PM
Short: PCG, TSLA
Twitter: AhabValue

muscleman

  • Hero Member
  • *****
  • Posts: 3337
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12402 on: May 16, 2019, 09:18:45 PM »
from Glen:
Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims.  Judge Lamberth declined FHFA and the GSEs’ invitation.  Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial.  A copy of Judge Lamber’s decision is attached to this e-mail message.
I am muslceman. I have more muscle than brain!

allnatural

  • Sr. Member
  • ****
  • Posts: 312
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12403 on: May 17, 2019, 06:02:59 AM »
Politico confirmed Phillips "recently wrapped up more than 60 meetings with stakeholders" and "will stay until the completion of the Treasury Housing Reform Plan." Seems like his role has come to an end.

james22

  • Hero Member
  • *****
  • Posts: 599
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12404 on: May 17, 2019, 07:28:03 AM »
I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up..

recap mechanics should trip you up since no one knows what the hell is coming.  this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative.  but then, ahab, you are a hunter for the big whale....

The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out.
Or I'll go back to work...

How big is "big," DR?

And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain?

Anyone?
BRK, BAM l SV, EM l Energy l Fannie Mae, Freddie Mac l Stable Value, Cash Value of Pension

allnatural

  • Sr. Member
  • ****
  • Posts: 312
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12405 on: May 17, 2019, 07:31:42 AM »
>50% of my portfolio... All pfds... i dont know exact probabilities but market is continuing to price in >50% chance this is a zero vs Par... that continues to be a mispricing as I see it.

Common has too many unknown variables to make an educated guess from where i sit. They may be the sacrificial lamb in the whole process. And the more capital required the heavier the dilution (potential for >99% dilution is on the table).


I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up..

recap mechanics should trip you up since no one knows what the hell is coming.  this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative.  but then, ahab, you are a hunter for the big whale....

The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out.
Or I'll go back to work...

How big is "big," DR?

And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain?

Anyone?

Wiggins

  • Full Member
  • ***
  • Posts: 105
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12406 on: May 17, 2019, 07:42:01 AM »
"too many unknown variables" for common
Agreed. But you can think about just the one, single upcoming variable which is likely to affect them the most: en banc.
It could have a huge positive impact on commons. It would help cap the amount of dilution that is going to occur. It's hard to imagine they don't have considerable upside after a positive en banc decision.

Preferred shares are not as affected by the en banc decision.


>50% of my portfolio... All pfds... i dont know exact probabilities but market is continuing to price in >50% chance this is a zero vs Par... that continues to be a mispricing as I see it.

Common has too many unknown variables to make an educated guess from where i sit. They may be the sacrificial lamb in the whole process. And the more capital required the heavier the dilution (potential for >99% dilution is on the table).


I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up..

recap mechanics should trip you up since no one knows what the hell is coming.  this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative.  but then, ahab, you are a hunter for the big whale....

The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out.
Or I'll go back to work...

How big is "big," DR?

And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain?

Anyone?

Luke 5:32

  • Hero Member
  • *****
  • Posts: 2844
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12407 on: May 17, 2019, 07:44:16 AM »
from Glen:
Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims.  Judge Lamberth declined FHFA and the GSEs’ invitation.  Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial.  A copy of Judge Lamber’s decision is attached to this e-mail message.

Court doc attached...
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c

DRValue

  • Sr. Member
  • ****
  • Posts: 477
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12408 on: May 17, 2019, 07:46:59 AM »
I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up..

recap mechanics should trip you up since no one knows what the hell is coming.  this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative.  but then, ahab, you are a hunter for the big whale....

The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out.
Or I'll go back to work...

How big is "big," DR?

And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain?

Anyone?

About 60% of my portfolio.

All my common exposure is hedged with prefs and my average common cost is $1.40, I dipped in at $1 in January as i couldn't believe the price was falling as it was all getting more positive.

0% chance of total loss. I cant give a % chance of gain as the way i work is based on having a massive margin of safety between what it could be worth and where i buy in, the idea being you can be wrong but still make money. But my current base case is based on Moelis, so around $18 a share.

[E]xpedience does not license omnipotence.

Not Investment Advice. Do Your Own Research.

muscleman

  • Hero Member
  • *****
  • Posts: 3337
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12409 on: May 17, 2019, 08:05:55 AM »
from Glen:
Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims.  Judge Lamberth declined FHFA and the GSEs’ invitation.  Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial.  A copy of Judge Lamber’s decision is attached to this e-mail message.

Court doc attached...


Thank you Luke. I was using my mobile phone when I pasted Glen's twit, and it was hard to attach the pdf from the phone.

What's the timeline for this? I'd expect the en banc to come out way ahead of this trial right?
I am muslceman. I have more muscle than brain!