Fannie Mae Preferred S (FNMAS)

[JosephS]

Although you are probably correct, the common is more spec than the preferred. Think about Bear Streans. They got something like 10 bucks. If they don't release them from c-ship through the courts, the common may not have an additional "takings" claim until/unless the commons are "wiped out" with zero compensation. If they are given anything and it is ultimately wound down through liquidation of the portfolio and then the business, it is worth less than 20 bucks. They may only get 3-4-5 bucks out of it. If the commons get a penny, the preferreds should be made whole per the cap structure. Now I truly believe that a court win will happen(just my opinion) and the companies will be released. What if it doesn't, though? Which would you rather have?

All about risk/reward. I feel pretty good about a 1.35 cost basis on 50.00 preferreds. I feel good about risk/reward, here. If things happen bad, the 50.00 preferreds go to 10 waiting on congress. I don't see a court in america ruling against release...

But if they do rule against the litigants, I doubt they say that the gov't can wind it down and cancel the common and preferred with zero compensation. I would rather be higher in the cap structure.

Given that, I realize the common is 20-30 with the warrants and 80-120 without. Not a recco to buy or sell.