Fannie Mae-No Politics (FNMA)

[kthomp19]

I think the stock w no cap prevails..... no?

First, there is certainly a cap on the commons. $1000 per share is pure fantasy, and in my opinion $20 is also. Also, the cap on the prefs is higher than par due to a possible partial conversion to common.

Second, I am 100% in the prefs right now, so I believe they will outperform the commons, even from today's prices. The highest realistic price I can think of for the commons is $8, which would represent a greater return than the prefs (assuming they go to par), but I also think the commons have downside to around 40 cents. The weighted average of my projections for the commons is just shy of $3, making the prefs the better bet.