Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3813831 times)

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13140 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.


Smile

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13141 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.

Eye4Valu

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13142 on: July 24, 2019, 09:49:44 PM »
The inverse head and shoulders pattern has me very bullish here.  ;)

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13143 on: July 24, 2019, 10:33:55 PM »
The inverse head and shoulders pattern has me very bullish here.  ;)

Are you ever not bullish on GSEs?  ;)
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hardincap

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13144 on: July 24, 2019, 10:34:09 PM »
its pretty simple: mm has the temperament of a trader and most of us have the temperament of a fundamental analysis investor. temperament loads evidence one way or another and shapes ones worldview. what primarily filters through to mm (chart signals, etc) barely even registers with most of us. (i wasn't as cool as midas when perry appeal came down but my wife didnt notice anything was wrong and we continued on with our vacation as if nothing had happened... though i may have lost my appetite).

i internalized before graduating college that debate between two parties with opposite temperaments results in nothing more than people getting frustrated and talking past each other. its not impossible, but it takes humility, patience, and self awareness, qualities we've been lacking in these posts
« Last Edit: July 24, 2019, 10:36:17 PM by hardincap »

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13145 on: July 24, 2019, 11:41:01 PM »
its pretty simple: mm has the temperament of a trader and most of us have the temperament of a fundamental analysis investor. temperament loads evidence one way or another and shapes ones worldview. what primarily filters through to mm (chart signals, etc) barely even registers with most of us. (i wasn't as cool as midas when perry appeal came down but my wife didnt notice anything was wrong and we continued on with our vacation as if nothing had happened... though i may have lost my appetite).

i internalized before graduating college that debate between two parties with opposite temperaments results in nothing more than people getting frustrated and talking past each other. its not impossible, but it takes humility, patience, and self awareness, qualities we've been lacking in these posts

I agree. Well said. I guess this is why I should stop talking about TA.
Still..... Just for fundamental investors, I still think it is important to be open minded, and constantly look for ways to improve the process, and be disciplined. When I was a fundamental investor from 2009 to 2018, I was doing lazy and lousy work, eager to put my cash to work, and once I buy a stock, I would rationalize it as hard as I could to hold on to the position, because, hey, selling at a loss means "lack of conviction", which is not supposed to happen for great investors. Eventually, I took big losses on certain names.

I already realized the problem with TA so I stopped talking about it, but I wanted to share with you my own pain and hope it helps with some of you.
I don't see how my comment on "If you don't learn, you get slapped by Mr. market" upset people. I got slapped several times by Mr. market by taking big losses on some names in those 9 years, and vowed to not to let it happen again.
Maybe it was because Midas kept thinking I was referring to him when I was not.

Getting back to the GSEs..... I think the probability is high that the treasury plan is a disappointment, which propped Calabria to file in Collins for FHFA constitutionality position to buy himself time. Collins ruling itself is not something I could speak of though.
I am muslceman. I have more muscle than brain!

Sunrider

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13146 on: July 25, 2019, 07:16:13 AM »
its pretty simple: mm has the temperament of a trader and most of us have the temperament of a fundamental analysis investor. temperament loads evidence one way or another and shapes ones worldview. what primarily filters through to mm (chart signals, etc) barely even registers with most of us. (i wasn't as cool as midas when perry appeal came down but my wife didnt notice anything was wrong and we continued on with our vacation as if nothing had happened... though i may have lost my appetite).

i internalized before graduating college that debate between two parties with opposite temperaments results in nothing more than people getting frustrated and talking past each other. its not impossible, but it takes humility, patience, and self awareness, qualities we've been lacking in these posts
... haven't said anything here for a while... for my part, I appreciated your contributions, whether I believe TA or not, whether I can use your insights or not, I'd rather have them - it works for you so there must be some value in it, whether I can derive it or, I'd rather have it here. So please keep on with it.

I agree. Well said. I guess this is why I should stop talking about TA.
Still..... Just for fundamental investors, I still think it is important to be open minded, and constantly look for ways to improve the process, and be disciplined. When I was a fundamental investor from 2009 to 2018, I was doing lazy and lousy work, eager to put my cash to work, and once I buy a stock, I would rationalize it as hard as I could to hold on to the position, because, hey, selling at a loss means "lack of conviction", which is not supposed to happen for great investors. Eventually, I took big losses on certain names.

I already realized the problem with TA so I stopped talking about it, but I wanted to share with you my own pain and hope it helps with some of you.
I don't see how my comment on "If you don't learn, you get slapped by Mr. market" upset people. I got slapped several times by Mr. market by taking big losses on some names in those 9 years, and vowed to not to let it happen again.
Maybe it was because Midas kept thinking I was referring to him when I was not.

Getting back to the GSEs..... I think the probability is high that the treasury plan is a disappointment, which propped Calabria to file in Collins for FHFA constitutionality position to buy himself time. Collins ruling itself is not something I could speak of though.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13147 on: July 25, 2019, 07:37:00 AM »
agreed hardincap, well put.

I think we already can expect what is going to be in the treasury plan, MM, so if it is to be a disappointment there will be some last minute post-phillips rewrite.  it will invite congress's participation, probably refer to fed mbs guarantee and additional charters, and talk about recapitalizing GSEs with some form of private capital to be placed before a federal guarantee...and be short on specifics as to how private capital will be raised etc  it will be written both to avoid inciting congress and laying the foundation for a negotiation with fhfa...which will result in vagueness.  those who expect detail will be disappointed.what I am unclear on is Mnuchin's call for an integrated approach to housing finance. whether plan calls for substantial changes to FHA/HUD etc.  that sounds like too heavy of a lift, but we may see some of that, and if we do, we might even see a call for congress to change approach to how to promote low-income housing

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13148 on: July 25, 2019, 07:49:08 AM »
Sunrider, my intention is to help contribute to this thread, instead of messing up with people for fun. I am pretty sure showing you output from a blackbox will not help you at all. No strategy can be correct 100% of the time, and when it is wrong, you will start to doubt it. It will only let you second guess your own decisions. I've seen a psychological study about this. For a black box that's right 50% of the time, traders following it will soon start to take the signals 50% of the time. For a black box that's right 80% of the time, traders following it will soon start to take the signals 80% of the time. The % of time traders taking the signal is in line with the % of it being right. That's how human brains are constructed.

I think maybe the other way I could contribute is to share my FA, which some of you think may be helpful because it offers a different view from your main stream view.
I am not as good as doing FA but I use my TA to guide what my FA should be, so it could offer you a different alternative view that may help.

Notice this tweet:
"The Treasury plan to reform FanFred is at the White House, has been for weeks. Will it see the light of day? Yes. but who gets to see it first? And will it be set in motion?"
https://twitter.com/PaulMuolo/status/1150855958060576769

My current view on FA since this tweet is that the treasury plan will be a disappointment. Jul 15 2019 minus "weeks" probably implies early June. Stock started declining around then. What a coincidence.
Later we saw Calabria's maneuver in the Collins' case for FHFA constitutionality, and his 2024 statement. Those probably give some hints on the treasury plan too.
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 #13149 on: July 25, 2019, 11:08:39 AM »
I think using an IMF muolo tweet for the basis of a view on the investment is misplaced