Monday, January 20, 2014

why would I sell now? I would NOT!

llcoolm11  Nov 19, 2013 10:15 PM Flag

Why Would I Sell If Things Are Better Now Than Six Months Ago

1. Net Zero (next quarter)
2. Twelve Lawsuits Proceeding
3. Congressional Dysfunction (Congress will not come to an agreement on wind-down; time is F&F's friend)
4. Election year next year (Congress will shelve F&F reform until after election year; time is F&F's friend)
5. Fairholme Proposal (Government will be running out of excuses for holding F&F under C-ship hostage)
6. Ackman on board (this is actually a good thing as he should be a big voice for F&F reform in shareholder's favor)
7. Will be released from C-ship after Government has made profit from their investment (likely next 6 months to a year)
8. F&F is closer to being listed on NYSE (stock price needs to be $4 which we will reach soon enough)

The more time F&F has, louder the voices for reform (not elimination), more time for lawsuits to proceed, more time for Ackmans and Berkowitz and other MMs and Hedge Fund Managers to lobby Congress. Now that Ackman is on board, more MMsand Hedge Funds will see F&F as a viable investment to creat a position in. Congressional sentiments driven by senator Elizabeth Warren and others will start to see the popularity of reforming F&F not eliminating them. Popular sentiments will grow in F&F's favor as time goes by. Time is F&F's friend. Now is a great time to be a long

So far, shots fired first by Berkowitz, then today by Ackman and Nadar. Did you notice Corker's tune to wind down F&F has started to "soften" today in the Congressional hearing? Shareholder activism will continue to improve the populist sentiment to reform F&F and not to eliminate them. Big money recognizes that F&F is growsly undervalued and they will take the stock higher. Have you noticed the more grows manipulation by big money especially in the last one to two weeks? To me, this is a very clear indication that they are manipulating this stock in preparation for the next leg up/break out. While it may seem like a selling pressure in the very short term, to me, this is a head fake in the short term to create as much volatility by MMs to shake loose of retail investors (to buy the shares cheap) before a strong push upwards. I am very positive of FNMA in the next one to two months. GLTA

Good rationale.
My thoughts on your points respectively:
1. At 2.76, we're still significantly undervalued; Ackman agrees.
2. The big money never came to F&F, it went to the government. The money from bank lawsuits did not have significant impact on price (IMO).
3. F&F actually has done better when overall market has gone down. Check the charts.
4. Volatility has gone down since May. 25% drop pales in comparison to the drop in May.
5. Wind down theme, voice in my opionion is of course prevalent still but there has been more positive voices supporting F&F compared to six months ago.
6. Define who you are referring to. I disagree.
7. Everyone support the 30 year mortgage. It will always be part of any reform.
8. Five Trillion fed money will be at even higher risk if reform is not carried out the right way. Impact to housing recovery, higher interest rates, higher fees paid by buyers, etc.
9. I absolutely think the ROI within a year will be at least 200 to 300% if not more if you buy at this price.



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