Replies to post #114440 on Fannie Mae-No Politics (FNMA)

[~ Blue ~]

nice news short sellers losing: Seems to be some stormy weather over in Shortville these days

go fnma/fmcc

[~ Blue ~]

Remember FNMA/FMCC SHORT SELLER LOST BIG IN mAY WHEN STOCK HIT 5.44 DOLLARS.

[Chief Slapaho]

Okay, so perhaps I've missed something along the way, but wouldn't hedge funds that have been and will continue to be buying up F&F be doing so to bet against the PPS going up? I thought Berkowitz and his contemporaries have been investing in F&F in anticipation of the stock going up, not down. Can someone please explain the quote and how this doesn't apply. Thanks.

Stock hedge funds are expected to outperform when markets fall but underperform during bull runs, since they generally hedge their bets by betting against stocks. But the gap is wider than usual. Through July, stock hedge funds returned 7.7% on average, compared with 19.6% by the Standard & Poor’s 500-stock index, including dividends.

In short selling, an investor sells borrowed shares in hopes of buying them back later at a lower price, and pocketing the difference. When the price goes up instead, the investor suffers a loss.