Fannie Mae-No Politics (FNMA)

[tutt1126]

Quote "Disclosure: When I first invested in Fannie before the Lambert dismissal, I was 100% in the preferred (FNMFM) with the usual distressed investing thought that the preferred are always safer than the common. At that time they were priced in the $18 range with a $50 liquidation value. After further thought, I sold them all and bought 100% Fannie common because the preferred had only a 50/18 = 2.78 upside multiple while the common seemed to have a much higher upside. While I didn't calculate a hard value for the common, I could not envision a scenario in which the common did not have much more than a 278% upside."


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