Im going long on FannieMae FNM

Quote from Cutten:

Going long in a bear market tends to work only when you buy at a capitulation point with panic selling. Averaging down as you lose more and more is one of the worst ways to play it.
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Just in case you didn't read it the first time, Port. Seriously, I am not trying to skewer you, I am trying to save you from losing your shirt. Get the fuck out of this horrendous loser of a position.

These stocks may well be going to zero. They are insolvent, long mortgages during the worst housing crisis for 75 years, massively leveraged, with no inherent edge in their business model. Without a perpetually rising housing market, they have no business.

The government will most likely bail them both out, and that means a probable $0 per share for any bagholders.

You have averaged in since $20. If you keep doing that, you will - as Rearden Metal likes to say - get pounded like a rented gerbil. Why don't you instead do what any good trader would when he makes a mistake? Cut your losses - the first rule of trading. Take the fucking loss.
 
Quote from Port1385:

Funny. Unlike you guys who throw all your cash into one thing for a quick flip, I am very diversified and these financial stocks are a long term hold for myself.

The simple truth is that this is an election year. Politicians will be forced to address FNM and FRE or else risk absolute economic implosion which would be a horror politically.

Im not worried about them going bankrupt and believe the stock will recover in due time.
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You do realise that a government bailout will mean $0 per share for shareholders?
 
Quote from Cutten:

You do realise that a government bailout will mean $0 per share for shareholders?
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exactly. i'm fairly sure its just the bonds that have an implicit guarantee, not the stock...its the debt that the govt/taxpayer will bail out...not the stock
 
How many talking heads said there was no problem with FNM and FRE, just the other day on Kudlow some guy mentioned they were ok, 2 days later and they may be bailed out by the federal government.
 
Quote from Port1385:

Im going long. I got some shares at 20 and will be building a position from this point forward.
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