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Excellent! Well stated:
Preferred shares are better to own, imo, if there is a restructuring of FnF. The preferred shareholders would get paid ahead of the common shareholders. That's why they're being talked about so much in the press. It's a fools errand, in my opinion. A sudden mass press campaign to glorify the preferred shares was coupled with the many other factors of the 1.47 year high on the 21st crash down. I believe the whole idea that the preferred are the way to go is a symptom of an attempt to keep the common under a dollar. If they end up coming out of conservatorship after payment in full, then the commons are the way to go. Higher reward.
The risk of the looming wind down is the only reason they are safer.
I'm not a financial advisor or anything, but that's my opinion on the matter.
I think there's more to this saga. eom
Waiting for that dollar test again. More and more investors are starting to figure out that a wind down doesn't make sense anymore. That a wind down was the plan for Fannie not being able to pay back the bailout money. The shorts will figure this out when they put their finger in the wind. Then we welcome dollar land. No more of this 100th of a penny BS. Can't wait to permanently put that behind us.
By next week, the guys who still think wind down are going to seem like the speculative ones. We won't be the crazy dreamers anymore.
The Treasury can't use the dividend profits to subsidize the government. The Congress has no reason, in my opinion, to want to test the legal issue behind keeping them past pay back (5th amendment, boys). They probably just want to save face right now.
The bank lawsuits now coming together with a huge precedent set on Friday, and the profitability for the foreseeable future is forecast. I don't see any way around it anymore: Conservatorship days are numbered.
I don't feel like this is a widely speculative trade anymore.
Conservatorship will be history. And the PPS very well could catch up to that notion before the bail out is even paid off. The market usually thinks 6 months or so in advance. The "5 dollar" projection is way way way too small, in my opinion.
They're making more than before, and they're playing it safer. They will not have the bad debt of yester-year shifted upon them this go-around. Investors can invest with sureness and security in that fact. I believe we'll start getting dividends on our investment as well, eventually. Many people may retire just on this one stock at these levels.
Cheers, to all longs.
All the pieces are starting to fit together. Each day that passes, it should become apparent to more and more investors. I can wait to start seeing all the mainstream press start to hint at this new non-conservatorship future. Nothing is certain, but this is my humble opinion.
Rev up the engines. eom
Seems NITE's computer's having a meltdown lol.eom
Here it comes. eom
Level 2 is better than the best Superbowl ever right now. Love it! hahaha
Short term MACD looking so good. eom
LOL UBSS. Poor them lol. eom
Agreed completely. Calling the bottom is fun, but essentially needless at these level, imo.
I almost feel bad for the ask getting such a huge slapping. Black and blue, I tell ya.
MM WORL is stuck again. Happened last week right before a huge run up. Not sure what's up with that.
My 0.92 close is not so laughable now is it!?
Broke through MACD resistance level. eom
:) eom
Here's NITE with the fake out again eom.
HAHA! Ripping7 ftw. eom
Call me crazy. .92 cent close is my guess. Puzzle pieces.
You got it ;)
A lot can happen with such a huge company over a weekend.
LOL NITE! eom
Close green finalizes the doji. eom
I'm not the person to ask for that. The next earnings are due by May 10th per their IR department. That's all I can tell you for sure.
Here we go. eom
We go up now, in my opinion. eom
Well you'd need a lot of backing money to short this one anyway. I suggest to do what works for you.
I find that there are much better options out there for flip trading at this point. I believe in the long term future for the stock.
Take that as you will ;)
Well, to me, it means the banks are still lined up for this litigation. The timing of the suit being a problem was shot down. Sets a precedent for the other suits. It's forward progress in the $200 billion getting to where it belongs.
Keeps an important puzzle piece on the table.
Feel like I could write a novel on this in trying to answer all your questions.
First off, yes. It's unpredictable. Most stocks are. Especially in the OTC world.
That said, MMs may want to keep this under a dollar because of what happened last time we got over the mark. See the chart on the 20th->21st of March. A lot of institutions have a minimum buy point of a dollar. MMs, in my opinion, want to accumulate shares before the price solidifies up to that point. Thus covering their short positions in the process at a decent cover price.
No one knows if the government is going to wind down FnF. They've said they would, but there are new indications every day that the timeline on that idea is going out the window. So we speculate.
How long until $2?... I can't answer that. Though, early May is a good guess. That said, pre-emption might be in order by the powers that be. Thus, it could be much sooner. If certain whales decide they want to short from that point, they'll want to drive it up sooner than later. No one knows.
Only went up a little bit after earnings because of A LOT of things. A LOT. It's too much to answer in one post. Stick around here and you might get a better understanding from the discussion.
GL
Agreed. Sells dried. Too much retail buying pressure waiting on a dip. Their game isn't working very well for them. A new plateau is needed ;)
The idea is debatable. I have heard that the sell orders have to be within a certain percentage of the current spread average to have any effect on locking the shares from short sale.
Not sure on that one, tbh.
Good point. The government is only getting dividends based on their stake as a return of investment.
The whole idea that the bailout can be considered an investment is laughable to me anyway. FnF were backed by the government. The bailout should be part of the deal. And so should repayment and release from conservatorship.
Because all profits are going as dividends to the treasury as of the current structure. If this was not the case, there would be no need to speculate about this structure changing in favor of the shareholders. Then the price would reflect book value at least.
But we're all here (for the most part) because we believe that structure is going to change for our benefit when the government profits exceed the bailout given.
There are many, many reasons to feel that way. But in the end, it is speculation. Risk/Reward.
Shorting is a process where someone borrows shares, like credit, and then instantly sells them on the market. Hence, shorting initially creates a sell order. When a lot of this is done, then a lot of selling is done. A lot of selling can drive the price per share down.
However, eventually, these borrowed shares have to be given back to the lender. This is also the point at which the short seller reaps their reward. They buy the amount of shares they initially sold; this is called covering. Now they can give the lender their shares back, at what should be a lower price if they did it right.
They make the difference in profit.
Could go on to why it's applicable here as a utility than rather a price downtrend driver, but would become a rather long post.
So.. shorting 101 it is :)
The fundamentals on this stock are so ridiculously good it's almost comical to try an debase them. The problem is the politics. This is a one (well.. ok Freddie.. two) of a kind stock. All we need are for the fundamentals to be allowed to shine. That is the question on everyone's mind. For the most part, people think FnF are going to be wound down. I believe that is not the case anymore based on what the puzzle pieces say to me.
I don't think I'm the only one in the world that's reading the pieces the way I am.
John Hempton, who manages a hedge fund called Bronte Capital, argues Treasury has trampled on the fifth amendment rights of private shareholders, which prohibit the taking of private property for public use without just compensation.
At this same time, we have these lawsuits against the banks.
I think the government knows the potential constitutional issues presented in holding FnF under conservatorship after they make back the bailout money in dividend profit.
Just a matter of time, in my opinion, until more people like myself notice this potential big picture. Seems many big boys already have. To explain that, I'd refer you to my last post: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86501581
This is exactly as I called it.
Sideways with stealth accumulation -- well, more of a hypothesis than a "call". I'm just another poster with the same information as anyone else in the retail world.
Short.
Cover.
Short.
Cover.
Wait for weak hands to lose faith.
Accumulate.
Short.
Cover.
OOOH! More selling from weak hands! Accumulate.
Short.
Cover.
Rinse and repeat. All the while the drivers of this process are gathering their under a dollar shares (speculation.. all of this).
As this process continues to happen, our based becomes more and more solid.
This can only be kept up for so long until we hit a sudden upshot, in my opinion. A new base; probably below a dollar at first.. keeping it under as LONG as possible. At that point, I feel this can all happen again for a while. Then May happens. The dollar, in my opinion, should be blown by then. It really could happen at any time. No one knows. And when the dollar is blown, various institutional buying limitations are out the door. That is, I believe, why we saw such a huge instant spike on the 21st after we closed over a dollar on the 20th.
The drivers know better now.
So here we are. Slow algorithmic accumulation. I honestly feel like every retail sale is being bought up by long term holding big boys. This pattern screams it to me.
Ahhh, the OTC.
After (assuming it happens -- more personal speculation) we uplist again, we can put these game behind us.
GLTA longs.
The MM CSTI has a habit of jumping on the ask with a boat load to sell. Me thinks short (speculation). I've seen it with other stocks.
But all while that is happening, look at all the small buys in between. This is accumulation, folks. Shaking the weak hands for long cheap shares. I believe the strategy is to buy up these shares without moving the actual price. This is done algorithmicly. On the surface, it just looks like sideways trading with some dips here and there.
In time, this builds pressure on the pps. And once that dollar mark is broken, the game changes.
The banks are lined up like dominoes. eom