Washington Mutual Preferred fka WAMPQ

[jackfburns]

This may be the one he's referring to:

http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_W/threadview?bn=86316&tid=888882&mid=889103

Re: 11.5 BLN valuation for WMI! 10-Dec-11 10:23 am
Hedge funds make their extraordinary profits through leverage (i.e., derivatives). Derivatives magnify profits. If the SNs have $6B in cash they can leverage that two to three times to $12B or $18B, for example. If they generate a 20% profit, they'll have made $2.4B to $3.6B before profits. If they have carrying cost (i.e., the money they need to pay for the use of the $2B owed to seniors) of, say, $100MM, then if they've made total profit of $3.6B they end up with $3.5B. If equity is entitled to 50%, then equity gets $1.75B. The total preferreds are $7.5B, so preferreds get $1.75B/$7.5B, or .23. That's $230 for 1 P for just one year. A market player would probably pay at least $500 for that P.

If JPM assumes the TPS, then the $1.75B is even more profitable for P holders: it is $1.75B/$3.5B, or .50. That's a 50% annual return, and a P would be worth over $1,000 at that point.

What started with only $6B in cash (that the SNs didn't even own outright) generated a total return of $3.6B, or 60% using conservative leverage. The foregoing is just an illustration, but it should give people here an idea of how the SNs make their money. You may want to be along for the ride if you can because I doubt there are many people reading these boards who have the assets to invest with people like David Tepper.