Replies to post #8115 on Fannie Mae Preferred S (FNMAS)

[feralcomprehension]

UNJUSTIFIED ASSERTIONS

You offer up no reasoning for your statement so it is difficult to know how you have come to this conclusion.

Reaching conclusions based on no justification does not seem like a wise investment strategy.

Porsche is the same as Ford. See, no justification. Is it true? Having driven both, I can tell you "No, it's not."

Best of luck to you.

[rosen62]

at this stage there is no differences junior pref and common. 1:1

The day that difference hits you it will be so quick that the first sound you will hear is your head knocking against the floor.

wait.

that sounds familiar...

P.S. You won't have time to buy.

[wayne49]

"GOVERNMENT OWNS SENIOR PREF.. NOT JUNIOR LOL:)"

This logic also applies to commons for you. This is where commons stands.

1. GOVERNMENT OWNS SENIOR PREF.. NOT JUNIOR LOL:)
2. WE OWN JUNIOR PREF.. NOT COMMONS:)
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.
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3. Common holders are here.


I hope you understand this. Even though Juniors are subordinate to senior preferreds, commons are way down in the totem pole. The junior preferreds have to be made whole plus back dividends before commons see a penny. Those are the facts. So, your assertion is dead wrong.

[rosen62]

Blue, if I may... it is impossible to compare/assess prices for the commons with the ones for preferred shares. Nominally -as you do-, you may think that $1.45 or $1 for commons may relate to $4 or $5 or $6 for Jrs. as simple numbers stripped off any meaning. Specially now that Jrs. are not paying dividends and it looks they have lost their "special aurea".

The dollar figure assigned to commons shares has a direct impact on the final figure of the market capitalization of the company. The dollar figure assigned to preferred shares has no relationship to market capitalization of any kind. So although both "are numbers", they are not reflecting the same concepts. Thus, it is impossible to put them together as "equals". Preferred shares along with debt are measures of the enterprise value, not of the market capitalization. Comparing commons and preferred shares in an equal footing is like -literally- comparing apples to oranges. They are different instruments with no direct correlation, except if done in an arbitrary fashion (like when saying a conversion would take place at 7:1 preferred for common, which forces a relationship).

Better think twice. The fact that they currently do not pay dividends does not make them common shares. They still keep all other attributes that makes them preferred shares.