Fannie Mae-No Politics (FNMA)

[FOFreddie]

Hi blownaccount9 - generally agree with you - thanks for sharing.

Assuming this ever happens - my hunch is that the commons trade heavy to start but there will be a significant multiple expansion over time. Institutions and index related funds will be large buyers and will continue to buy because the GSEs will have significant market caps and will have become significant market cap weighted components of the financial subsector of the S&P 500. Multiple expansion may happen as institutions become market weigh holders of the GSEs so not to have tracking error vs the indices. For example - BAC has approximately a 265 bn market cap - it will be like having BAC go public or even bigger

The key will be to hold a core common holdings to participate in multiple expansion without cap gain taxes. Maybe hold a core in a separate taxable account - trade your Roth but hold a core in your taxable account until the UST is long gone.