Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3648800 times)

orthopa

  • Hero Member
  • *****
  • Posts: 797
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13370 on: August 28, 2019, 06:19:23 AM »
Why not margin up or go all in if one hasn't already? Biggest risk seems to be the time this takes to be realized. No longer permanent loss of capital.  If your margin rate is 10%. The preferred arent 10% higher a year from now? Unlikely.

oh, this argument again...  the answer of course is because you can lose $ from here.  the market doesn't hand out free gains or easy doubles.  I can easily paint a scenario where the jr pref receives a major discount to par only after several more years and a handful of 25% drawdowns along the way. or something worse.  of course there are other positive outcomes also.

Yes its back. Why not? We are here to make money right? What's your argument for preferred receiving a major discount to par once NWS ends and capital build starts? How is the common worth anything before the preferred is worth par as money flows down the capital structure? Cant be forced conversion. Do you have specific examples where this has happened?

Time I agree with. Some preferred trade~ 40% of par. 150% upside leaves a lot of room for waiting.


orthopa

  • Hero Member
  • *****
  • Posts: 797
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13371 on: August 28, 2019, 06:25:25 AM »
Im expecting that Treasury and the administration will lay out their vision of what they think Congress should do, what they think I should do and what they think the Treasury and I should be able to do together in terms of amendments to the share agreements that allow an exit out of conservatorship, Federal Housing Finance Agency Director Mark Calabria said in an exclusive sit down with HousingWire.

The report should discussion about amendment for NWS to end. Finally getting on paper it seems.

orthopa

  • Hero Member
  • *****
  • Posts: 797
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13372 on: August 28, 2019, 06:31:07 AM »
https://www.whitehouse.gov/wp-content/uploads/2018/06/Government-Reform-and-Reorg-Plan.pdf

Starting on page 76 maybe a large portion of what we see in the plan.

Luke 5:32

  • Hero Member
  • *****
  • Posts: 2612
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13373 on: August 28, 2019, 06:32:21 AM »
"I wait for You and my soul finds rest. In my selfishness, You show me grace..." My Hope Is In You by Aaron Shust https://www.youtube.com/watch?v=ugD0i5Y3cw8

allnatural

  • Sr. Member
  • ****
  • Posts: 258
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13374 on: August 28, 2019, 06:54:23 AM »
You can't margin OTC securities like the PFDs.

cherzeca

  • Hero Member
  • *****
  • Posts: 2374
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13375 on: August 28, 2019, 08:25:50 AM »
You can't margin OTC securities like the PFDs.

beat me to it.  but 100% margin is god's way of telling you to chill

Luke 5:32

  • Hero Member
  • *****
  • Posts: 2612
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13376 on: August 28, 2019, 08:40:16 AM »
You can't margin OTC securities like the PFDs.

beat me to it.  but 100% margin is god's way of telling you to chill

It's true. That's in the Bible.  ;)
"I wait for You and my soul finds rest. In my selfishness, You show me grace..." My Hope Is In You by Aaron Shust https://www.youtube.com/watch?v=ugD0i5Y3cw8

Ahab

  • Full Member
  • ***
  • Posts: 136
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13377 on: August 28, 2019, 09:19:43 AM »
Though shalt not YOLO OTC Securities 
Though shalt not depend on the courts to protect property rights...
Long: FNMAT, FNMAN, FMCCL, FMCKO, BAC, JPM, GOOG, JD, MO/PM
Short: PCG, TSLA
Twitter: AhabValue

orthopa

  • Hero Member
  • *****
  • Posts: 797
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13378 on: August 28, 2019, 09:28:04 AM »
You can't margin OTC securities like the PFDs.

I've gone on margin buying Preferred against my other holdings before, in fact I am now.  :)

beaufort

  • Full Member
  • ***
  • Posts: 102
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13379 on: August 28, 2019, 12:19:57 PM »
You can't margin OTC securities like the PFDs.

I've gone on margin buying Preferred against my other holdings before, in fact I am now.  :)

This is how I have understood Druckenmiller to have had the slugging percentage that he did.  When a trade is working, pile in.

Edit:  I will add that managing money professionally is different than one's own.  If you are in a daily liquidity product, obviously you cannot pile into Fannie and Freddie prefs.  If you are not, or you are managing your own money, I don't see why you cannot.  My understanding of Druckenmiller is that he was in liquid securities/currencies etc, presumably because he was managing money professionally. 

One more point.  I start with the assumption that everybody on this board is an adult and competent to make their own decisions.  Knock it out Orthopa.
« Last Edit: August 28, 2019, 01:52:34 PM by beaufort »