Fannie Mae-No Politics (FNMA)

[kthomp19]

I will say this, however. One need not be fully committed to either strategy (taking gain or buying and holding). I've held over the years and have regretted not taking nearly enough gain during the pops. I could have pocketed the profits and bought the same shares back at a lower price. I own enough shares that if this pops, which I fully expect it to, I can set a target for some stop-limits with about ten to twenty percent of them and still get the lion's share even if it gaps up right after. I want the big bucks at the end of the rainbow, but in the meantime, I think I'll just wet my beak.

Good points, well said. If you think there will be a drift-down after the decision then it makes perfect sense to take some off the table.

It still pays, though, to have a long-term target in mind so that you know if, when, and at what share price getting back in is worthwhile. Contrary to most here, I don't think the commons have a long-term ceiling beyond $8 or so due to how much capital they will have to raise and the warrants. And in the four scenarios in my share price estimate framework post, the worst one involves the warrants not being exercised; make sure you carefully scrutinize the common nonsense assumption that the warrants not being exercised means an automatic 5x for the common share price (there would be many other knock-on effects).