Replies to post #190268 on Fannie Mae-No Politics (FNMA)

[Fillmoepro]

Malebaboon, I concur. Out if the 3 big hedge funds Perry, Fairholme, and Pershing, Pershing is the only one without a lawsuit against the government. This is why I said I trust Perry & Berko more in getting FnF released. I think Ackman is only on the bandwagon for his benefit and not the shareholders like the other 2 hedge funds. If you have pending lawsuit vs the government I guarantee you're not trading any of your shares or doing anything stupid to lose your creditability in the cases. You would stay long and strong like Perry & Berko..

[TII]

MB, trying to make sense of this situation is of great interest to me as well and I tend to agree with most all of your other posts. While Obit is right, in that we don't really know what Ackman did or didn't do during this drop, I tend to believe he may not have done much at all. If anything, I feel he could've increased his position at the bottom. Again, I don't know if doing so creates any undesirable situation for him by having a larger than 10% position...i.e., filings and what not. I will say, I find it interesting that he is just under 10% in his position.

Stating your guess that he could have sold 35m shares at around $6, actually, was not possible. I don't even think 35m total shares ever traded above $6 before the 1pm drop. I believe, roughly, 75-80m total shares traded during the 1-2:30pm drop where the price went from a little over $6 to around $3.25. More than 50% of the 75M+ shares traded during that period did so under $4.10 and over 75% of the 75M+ traded under $4.75. Again, I'm not saying it's not possible that Ackman wasn't in some way involved in the this, but looking at the numbers, I'm not sure it would have been to the scale that you might be thinking/guessing.

I have studied Ackman quite a bit, and I feel he may be sticking to his guns on his long position. I also believe there are several reasons he chose not to comment on the drop. First, I don't think it's as big of a deal to him as it is many here. He has said many times, he expects there to be many ST ups and downs in his LT bets and they usually don't phase him. Second, while he can be outspoken at times, I find him to be more reserved and less confrontational than most think he is. Last, Herbalife was about to or had received a huge bomb around the same time and I don't think he was ready to make himself available to any questioning about anything, especially that!

Again, just speculation that I'm willing to put out there...could be 100% right/wrong or somewhere in between.

[obiterdictum]

Obit - I really appreciate your insistence on sticking to known facts, but trying to make sense of inexplicable occurrences is of great interest to me personally, and part of scientific investigation is also asking interesting questions and positing possibilities - creative 'thought experiments' as Einstein called them. Tesla would build his machines in his mind before ever picking up a wrench. Asking questions and tossing out possibilities is part of discovery as well as always asking for 'just the facts'. Respect to you.

Yes. Agreed. Asking questions and tossing out possibilities is part of discovery as well as always asking for 'just the facts'. We present questions and suggest possibilities and avoid giving unsubstantiated beliefs and opinions as certainties.

As you know MB, science requires factual recorded observations and a scientific investigation cannot proceed adequately without them.

Believing, thinking, and surmising without facts is imagination. It is all made up thoughts and ideas and may or may not have any bearing in reality. It is fun to do and useful in certain circumstances, but without facts included to substantiate what one is thinking one can end up in living in an imaginary world of one's own making.

This is not bad in itself and can be stimulating and useful if done well. I engage in this privately to see where things are going with this stock and other stocks. It works quite well if as many facts as possible are included. I tend strongly not to present my flights of fancy and suppositions.

In most disciplines, thought experiments are not scientific. They are imaginative, speculative exercises without new data that are aimed to get a hold on realities or consequences not yet understood or experienced by making assumptions and suppositions about whatever one is engaged in. They are not factual or scientific. They are quasi-factual at best.

Contemplating all the factors of what happened on March 11th, one can come up with some ideas. I did so and made a purely speculative attempt to assess the drop and small rise of March 11th.

However, I could not venture into the territory you bravely described of what Ackman possibly did.

"You can see that if he owned 110 million shares at $2.20 and sold, say, 35 million at around $6 he would basically be riding on a new position of 75 million 'free' shares now. So, in sum, I believe Ackman sold shares,"

Could Ackman do that? Certainly he can sell shares and buy them at anytime the market is open as he stated in his SC 13D.

..".the Reporting Persons may take such actions with respect to their investments in the Issuer as they deem appropriate, including, without limitation, purchasing additional shares of the common stock or other financial instruments related to the Issuer or selling some or all of their beneficial or economic holdings, engaging in hedging or similar transactions with respect to the securities relating to the Issuer and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D."

No argument with selling as a possible act, even though there are no facts whatsoever at the moment that support that possibility or deny it. We actually do not know what Ackman and his representatives have done on March 11th.

Ackman owns 115,569,796 share at an average price of $2.29 per share in four different accounts with prices ranging from $1.54 to $2.94 performed in 28 trades. Fact is, on March 11th, tick data shows only 1,805,409 shares were sold at $6.00 for a total of $10,837,837.13. So, Ackman realistically did not or could not have performed that trade or trades as speculated given the available record and available traders on the buy side at that price.

So a new thought experiment needs to be done that matches the factual record and to get closer to a possible reality. After all, Ackman may not be the one doing the trading. He can set parameters and a MM or Institutional DMA trader can do that for him, ...perhaps. We do not know if Ackman trades or someone does that for him and who that person is or persons.

Without factual data, thought experiments that seek to understand what happened in a stock price drop would not be corrected towards a sounder possibility of what actually happened until we get the full story. Respect to you as well for making the effort to understand.

Source:
FNMA SC 13D
http://www.sec.gov/Archives/edgar/data/310522/000119312513443212/d630953dsc13d.htm
http://www.sec.gov/Archives/edgar/data/310522/000119312513443212/d630953dex992.htm