Fannie Mae (FNMA)

[Dollars1]

Selling Freddie Mac Pre-Housing Crisis

At one point Warren Buffett owned nine percent of Freddie Mac. Naturally, this was prior to the financial crisis. Buffett first bought stock in Freddie Mac in the 1980s because “it looked ridiculously cheap.” By 1998 Buffett’s overall position in Freddie Mac had risen to $3.9 billion, representing a 1,200 percent return. Buffett demonstrated he knows how to take the money and run before the warning signs appear. Buffett sold his position in the late 1990s at an eventual profit of $2.75 billion. Buffett sold his stake because he wasn’t buying what Freddie Mac was selling. Buffett saw initial warning signs when Freddie Mac made an investment that was unrelated to its mission. According to The Washington Post, Buffett said that he “didn’t think that made any sense at all” and that Buffett “was concerned about what they might be doing … that I didn’t know about.” Once Freddie Mac began projecting double-digit earnings growth, Buffett said enough is enough and sold his shares. “I figure if you see just one cockroach, there’s probably a lot,” Buffett said.


http://m.benzinga.com/article/4811238?utm_referrer=http%3A%2F%2Fr.search.yahoo.com%2FRV%3D1%2FRE%3D1442751830%2FRB%3D%2FRO%3D8%2FRU%3Dhttp%253a%252f%252fwww.benzinga.com%252fnews%252f14%252f09%252f4811238%252fa-sample-of-warren-buffetts-largest-profits%2FRS%3D%5EADA6lX.sxF0CuloaY3W350ZeA0gXc8-