Fannie Mae-No Politics (FNMA)

[familymang]

From Pershing Square conference call yesterday. Ackman now believes this is a trump/gop trade.

William Ackman

Yes. That's right. What's interesting about Fannie-Freddie is I don't really know how to think about why the stock price is here versus any other stock price. It's -- it was a period of time where they weren't building any capital at all and the share price was 3x the current share price. And I think it's actually probably the most interesting play on who the next administration if President Trump is reelected, which is probably very good for Fannie-Freddie or any more conservative leaning administration, but don't let that affect your vote. Consider other factors.
...
Our bet at this point is really based on the economic logic of Fannie and Freddie becoming independent companies once they are sufficiently capitalized, whether that's 8 years or whether there's some shorter period of time because the capital rules have changed or the business has raised capital in an IPO, but we do think that's the inevitable outcome. Interesting options representing a little under 1% of the portfolio.