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And to reiterate, there's good reason to believe that merging but not eliminating the two GSEs will not leave common shareholders high and dry. Details of the arrangement notwithstanding, we've seen in a few different places (such as the DD links and documents blue has posted) that commons cannot legally be wiped out in such a transaction.
While I'm currently learning more and more about T/A (I've always been a more F/A thinker), I am trying that tiny gain strategy to prevent myself from mistiming bottoms and tops, as I have done before. In the end I hope to have some low maintenance f/a plays going and also an ability to make intraday gains on other plays with a strategy that works for me. I don't have PM ability as of now but if/when I do I'll be in touch. I've got a smallish account that is slowly growing. It's great to read everybody's posts here.
Sounds a bit like my situation. I've been dabbling with this strategy that's a pretty simple version of scalping. Tell me if I'm missing something:
Find uptrends in progress. Buy in. Watch it go up until you've got 1% or even 0.5% gain. Set stops (trailing % ideally) very very tight and execute them manually if need be. Sell for tiny profit. Repeat and compound your gains. Be disciplined and patient. You've gotta be buying a large enough block that fees don't hurt your tiny gains much.
Seems to be promising. Anyone have thoughts on this strategy? Anyone trade like this? Advice? Thanks.
Very helpful. Thanks obit.
Very true. But if you find a government that really believes in that, then please let me know where it is!
Thanks for your insight. I look for consistent dollar volume and recent sharp declines or increases, as well as a bit of scanning through the hyped tickers like you say you do. I like your thought process. I'm long fnma but recently I've been more into finding current uptrends (intraday hopefully), jumping in for a very short time, and getting out with tiny profits (manually or automatically exiting when needed w/ very tight stops too), and compounding those small gains by doing it again in same uptrend or even a different ticker. I'm a bit new to this like you are, but that strategy I've been into seems to be an interesting and promising complement to my "regular" style of trading. Plus, at some point the compounding would become ridiculous. Even w/ fees taken into account I think it could be a fairly safe and profitable method. At some point it would reach problems of scaleability (getting very very large orders in and out as quickly as I'd need to might be hard), but I'll cross that bridge when I get to it. If anyone sees something horribly wrong with that strategy, please let me know! Maybe I've overlooked something.
How do find it easiest in your methods to quickly find tickers with the right kind of volatility for your purposes? I tend to manually scan for that, but I'm sure There's a better way.
Ok so your point seems to be that in addition to keeping fnma's liabilities off of the gvt's books, staying below 80% also provided the gvt the possibility and flexibility of being able to release fnma from c-ship if and when it wants to.
I'm assuming that you are now expecting an end to c-ship soon, correct?
Hm, could you try to re-phrase what you think the "rub" is? I'm not sure I followed your thought there. Thanks.
But that's difference to logical people. We're talking about politicians here. Also GM was a non-gvt-sponsored corporation. FNMA is a GSE, backstopped by the gvt from its inception. Because of these things, perhaps the comparison to the restructuring of GM will not help us predict much here. Sure fnma is profitable, but that just means more greedy hands will be in on the restructuring negotiations, which also means that common shareholders' stakes are endangered, especially since we are officially unable to have any vote or say of any kind. They locked us out of those basic rights, so why should we not fear they could do worse and wipe us out of our shares entirely?
Maybe we long common holders should simply wait for an upcoming pps bump, perhaps when aug report comes out, then sell our commons and move into preferreds?
Ok then exactly how similar is this restructuring of FNMA to that of GM a few years ago? Does it appear from our wsj news to be similar enough to the restructuring of GM to make long common shareholders nervous?
If it were 80% then legally the gvt would have had to take FNMAs assets and liabilities onto its books. Since that would have added around $5 trillion in liabilities at the time, the gvt thought that the national debt as it is is horrifying enough without adding $5 tril to it overnight. So they took 79.99% instead. Not that they seem to care about the debt at all, but I do win that bet don't I? Or is there some other answer?
That's the same question I have. Also, the "restructuring" will probably be subject to political negotiations, no? One would think commons will be safe but the devil is in the details of the final reform bill. Are there any clear signs out there that the politicians on both sides intend to protect common shares of FNMA all through the restructuring process? If anyone has seen such signs please share.
Logic would say "up"
If I'm reading that correctly, you seem to be suggesting that pressure to reform GSEs is growing, and neither party's likely solution (or proposed reforms) will result in a fnma that is free and clear of c-Ship, correct? Dems want GSEs to remain under FHFA / Treasury control, And gop wants the GSEs abolished. Is there any realistic chance amidst those two different political stances for FNMA to be released from c-ship?
Forecast for this week? Anyone care to guess? While we're at it, how about a forecast for the next 2 weeks?
I'm only guessing here but I'd guess some gains this week, maybe back to 1.80 ish or even near 2.00. But with typical volatility continuing until Aug. So, for the next 2 weeks I'm guessing a range of 1.45 - 2.02. Anyone think we'll see $3 or heck, 4.50 in the next two weeks?
Couldn't agree more. Well put.
Any political developments behind this drop? Is it possible the hedgies' lobbying for FNMA's release has been somehow conclusively denied but not yet publicized?
It's no accident that school curricula usually don't include much of any basic economic or financial education. Creating a nation of ill-informed consumers benefits both the politicians and the largest financial institutions. Take a look at who were the prominent people who were behind the modernization of our education system in the early 1900s. You can actually see their own public statements saying just what I said. They were quite open about wanting to create a certain amount of citizens who had no understanding of money and math, for instance. So when regular people have access to a penny stock like FNMA that has potential unlike most pennies, it's a wonderful thing!
To keep on topic, try to imagine what's next here, given our shared analysis of the past for FNMA etc. I'm long FNMA but think of it this way. Many here know that what the gvt did with / to FNMA in 2008 was unprecedented in some ways. And we take some solace in the info inside the recent shareholder lawsuit, the strong, historical and constitutional arguments it makes, and signs that discussion of ending c-ship is starting to circulate. But we've already had the gvt do one unprecedented thing with FNMA when it was probably not even necessary (as some say). Why would we think another unprecedented gvt action on FNMA is impossible from here on out? This is a different administration, too, one which is probably less concerned with the legal precedents outlined in the lawsuit than we would like it to be. I just hope it ends up being somehow political expedient for them to release FNMA from c-ship, despite the likely but unspoken preference of this administration to keep FNMA trapped and fully absorb its functions and assets into the ever growing Federal behemoth gvt.
Some of us knew how bad he'd be even back in 2006-7 before the campaign. We do our DD for stocks. If people only did 1/10th the DD on our candidates as, say, Blue has done on FNMA, then they would have actually been shocked at what they would have learned back then, before it was too late. Don't get me wrong, we don't have a lot of great choices when it comes to candidates, and I'm not one for parties. But let's all do our DD next time. We can dissect zone defenses and play-action in detail and in the moment from our couches, yet we just accept what the mainstream media says during campaign time, when our critical thinking skills and skepticism is needed most? That's unfortunate. As an investor, though, you've gotta dog into the background of our leaders sometimes, to see what macro decisions and directions are likely, or even what exact corporations will likely be getting the old Zero income tax favor this year. We can make gains if we do.
So much truth in so few words! And How about looking into the history of international banks funding both sides of wars? Whoops! Did I say that out loud?
These kinda of interactions are one of the best things about places like ibub. Thanks.
What the gvt did in 2008 to fnma isn't shocking to anyone who understands the similarity between how our last few administrations have acted and a certain movie from the 70s you might have seen, which stars Brando and Pacino. The main characters in it simply do what they want, because they can. And they are 100% corrupt. I'm long fnma but i have to leave some space in my outlook for the chance that uncle sam might somehow still be able to bulldoze its way over some fundamental laws here, as they certainly sometimes do. I love the info Blue has posted for us (lawsuit, fnma link saying no liquidation without act of congress, etc). Sure, some courts might rule in our favor, but some courts think the gvt can force us to buy something. Some believe eminent domain allows gvt to take your land not only for infrastructure but also to be able to turn around and give it to someone who has a plan to make more profit (generate more tax $) from it than you are making. So the law seems clear here but that still might not stop the gvt. I'm simply keeping that chance in mind until some solid developments happen. Maybe I'm a little more paranoid or cautious then most fnma longs. But the more info like Blue's that I see, the more I want to buy.
One of the best, most accurate commentaries I've ever read on this issue is linked below. It's From July, 2010. Recently the author wrote a follow up, which you can find if you like the one below. Again, investors must be realistic about the current climate, which is, I'd say, a completely, almost formally detached Elite group of people in D.C. absolutely ravaging the rest of us. We used to call them leaders and statesmen. They never really were (excepting the Founders mostly). But it's gotten so far out of control it's ridiculous.
http://mobile.spectator.org/theamericanspectator/#!/entry/americas-ruling-class-and-the-perils-of-revolution,516c9b97d7fc7b5670b1e28d
It won't end. I can't foresee these patterns of gvt expansion ending. What would stop them? As an investor it's smarter to assume the gvt's tendency to "take", as you put it, will simply increase forever because that has been the pattern so far, going back a long time. If you can figure out what they will take next, you can probably invest accordingly and make a profit. Having said that I'm long FNMA but it wouldn't surprise me one bit if the gvt succeeds in shafting shareholders here somehow.
Ever read the TARP bill? Same thing there. It says right there in the bill that this action is not reviewable by any court ( I'm paraphrasing). If we just think back to our basic civics classes, that is a violation of our checks and balances. No one really seems to care enough these days about things like this that are fundamentally unconstitutional. Oh well. I guess we'll continue to see the gvt write it's own immunity into the laws it passes. What a clever racket that is! Go FNMA.
Maybe we should all enjoy a good book while we watch this FNMA flatline consolidation period develop. I, for one, like current events-based books such as this one, the sales of which have risen almost 7000% over the last 24 hours!
http://www.zerohedge.com/news/2013-06-11/sales-george-orwells-1984-have-surged-6884-last-24-hours
Someone posted saying thankfully we can have our own opinions in this country. Has he been watching the news? We can have our own opinion as long as we're ok with being attacked and audited by the IRS for having them. As long as we're ok with every single electronic communication we engage in being intercepted and searched by our government, we can have our opinions. As long as we're ok with our president using those tools to find potential political enemies, we can have our opinions. And here with FNMA, maybe we can even have our own stock! Maybe. It's not entirely clear yet. We can have our own opinions, sure, but we can't express them without our overlords listening, and deciding whether our opinions are ok or whether they are threatening to their control. my opinion is that they should Release FNMA!
Realistically, next run up goes how high? I'd guess 3.90-4.25 when Aug earnings report arrives. Isn't that reasonable to expect? With all the media bashing, etc., maybe even another good earnings report won't quite get us back to $4.50 or $5. I hope I'm wrong, though.
I've had orders at 1.75 and 1.55 since Friday but only based on previous apparent resistance going back a month or so.
Why 1.75? See any tech indicators there?
Maybe our current dear leader would like us to be China? I hope not!
All government is a paid protection racket backed by brute force, and they are monopolized versions of it at that. Say, Where have I seen that business model before again? Oh wait, there's no inherent monopoly in the other paid protection entity I was thinking of.
Not sure if this sounds good or bad for longs. Politics can be unpredictable. I'm long but check out these details. What do we all think of this?
http://www.zerohedge.com/news/2013-06-03/gse-privatization-or-fed-magic-here-are-alternatives
More details on the current plan in D.C. How do you think these details affect fnma longs, of which I'm currently one.
http://www.zerohedge.com/news/2013-06-03/gse-privatization-or-fed-magic-here-are-alternatives
Techs, macd's been mostly flat 10:30, with many tiny crossings up and down. RSI uneventful too. How did you anticipate that 11:05 dip? Pps was mostly sideways from 10:53 - 11:15 and didn't hit any resistance as far as I can tell. Thanks.
I understand Reasonable went off 2.70 resistance at 10:41. But was there some other way to anticipate that 11:15 dip?
Why are preferreds down today? Hedges bought so much recently. Some previous holders taking profits maybe?
Just curious why preferreds are going opposite direction of commons. Any thoughts? Thanks.
Think we'll see 1.20-1.50 again before August? What are the odds of seeing 1.20-1.50 again before August earnings report anticipation starts to push pps up a bit?
Shouldn't we expect another round or two of aggressive shorting between now and August?
Does anyone here expect there will be some chances to average down again with some 1.20s soon?
If so, how low do you think we could realistically set our buy orders and have a good chance of getting filled before Aug?