Good post Ben,but I would like to add something here.
If someone who does not really know how to handle their money or invest and does not know (understand) THE #1 rule "protect your capital" reads your post, they are going to put more than they really can afford to lose in this. This post will have all the dreamers throwing it all at FNMA.
This post will probably not sway anyone who is looking to "get rich quick", nor will it sway anyone who has ignored mom's saying "if it seems too good to be true, it probably is"
True story; My buddy had a bad day today. A Company who appeared to be on the cutting edge of something great released their results. Just prior to that the stock was halted (as they all are with any type of major news). Stock opened down > 90%. Happens ALL the time.
My suggestion is this. Anyone deciding to go long on this take what you are thinking of putting in. Now, seriously think of what you will feel like if you lost 80% of that (because that is what you are looking at if some news comes out overnight that the commons are worthless). Don't just quickly think about it, really think what it would be like if you woke up and 80% of that money is gone. If you feel it would hit you hard, keep adjusting to a suitable figure that you can live with.
Please don;t try to hit a home run. If you wake up one day and FNMA is $20, $50, $100 this will be a lot of money still to you if you use the formula above. Yes, you will say "I shoulda.." but trust me, not making as much is a better feeling than losing more than you can handle. If you do not believe me, just ask some people who have recently posted about their sickening losses here.
Or ignore all of the above, and just "let 'er ride". Whatever floats your boat.