Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3718002 times)

hardincap

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12930 on: July 12, 2019, 07:09:01 AM »
also, how do you (and others here) interpret craig's departure now?


Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12931 on: July 12, 2019, 07:10:38 AM »
IMO, you are further wrong to think the pref thesis still holds. Because prefs have a capped return, timing has to be a part of the thesis, so if you are wrong on timing, the thesis is wrong. so to clarify your thesis then, how long do you think is "longer than I had hoped"?

You think the pref thesis is shot? 

I hear what you're saying regarding timing, hardincap.  If this were trading much closer to par then timing would be a much bigger issue in terms of rate of return.  But trading at half or less than half of par the favorable outcome would dwarf the market even if it took a very long time. 
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12932 on: July 12, 2019, 07:12:27 AM »
IMO, you are further wrong to think the pref thesis still holds. Because prefs have a capped return, timing has to be a part of the thesis, so if you are wrong on timing, the thesis is wrong. so to clarify your thesis then, how long do you think is "longer than I had hoped"?

Someone is really negative now! ;)

Unless someone is involved in the process directly how do you expect them to give an accurate estimate? Its would be a blind guess and useless. Thus the question is useless.

Preferred capped at par at yesterdays prices ~100% upside. So if it takes 3 years 100% in years not a good return?

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12933 on: July 12, 2019, 07:13:00 AM »
also, how do you (and others here) interpret craig's departure now?

The plan was done and he moved on to wall street.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12934 on: July 12, 2019, 07:14:13 AM »
also, how do you (and others here) interpret craig's departure now?

Definitely brings into question whether his work was completed or not.  He may have completed as much as he could, or perhaps he was fed up with the process. 

I also wouldn't completely discount the possibility that articles in the past two days discussing receivership and delay, delay, delay without one high-ranking source or even an anonymous quote were the work of those that have been so adamantly against the GSE's for many years.
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc

Jcmeg35

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cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12936 on: July 12, 2019, 07:27:40 AM »
as I recall Bloomberg pays its reporters more money if they have an effect on the market.  this is crap journalism and it calls into question this reporting.

the part I believe in this story is that mnuchin is incredibly stretched and is the linchpin for delivering the treasury report to potus...and for doing just about everything else in this administration.  the speculation that the GSEs are a political football that are best addressed after 2020 election is something I dont believe.  I think this is Bloomberg reporters trying to make more money by quoting an unnamed source who isn't in charge of anything.

I still like the risk/reward of the junior pref, even more now at this price. and @hardincap. I expect a conversion so that the return will not be capped

cherzeca

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muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12938 on: July 12, 2019, 07:28:58 AM »
A few days ago when people were Taunting me and saying down 7% from the top is nothing to worry about, now it is down another 14% today. Be very careful of the crack of the canary of the coal mine situation. My biggest shortcoming as a value investor was not knowing when to sell. Almost the entire value investing literature is teaching how to buy and what to buy (not even when to buy). Regarding selling, there is almost no mention of that. Last year my primary focus was to figure that out.

I want to be clear I was never taunting you.  Others maybe were, but I wasn't.
 
Your points are appreciated but they still have to do with pricing of a security and don't take into account the thesis of the underlying company.  The stocks could be down 50% today, does that change the thesis?  No.  The stocks could be up 50% today, but again doesn't change the thesis.  As a value investor the buy price and sell price matter to me, what happens in the interim is irrelevant. 

I think most value investors would tell you to sell when the stock is at or near intrinsic value.  It's probably not discussed more because it seems like that would be the only logical place for someone in the value investing philosophy to sell... we wouldn't hold it past intrinsic value, and we wouldn't be tempted to sell it at a steep discount from intrinsic value.

I never felt like you taunted me. Donít worry about that.
However a 50% drop of a stock sometimes bounces back and sometimes not. By claiming a 50% drop has nothing to impact on its fundamentals is a flawed statement because Iíve seen a lot of times when bad news come out later after the stock moves. It is too idealistic to assume others know the same information to act on as you are. A lot of times these big drops tell you that someone knows something that you donít know. But also sometime like the FMCKJ top where they probably already know these info but started selling day after day on low volume to avoid panicking others to also sell with them. Thatís the crack of the canary of the coal mine type top.
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Luke 5:32

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A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc