Fannie Mae & Freddie Mac (A “closer” look)

Some of the team at Here It First has been following FNMA for a while now (since around $0.50), others much later (around $4.10, finally grabbing some shares post bill announcement). Both sides saw the same thing, steady growth and a HUGE upside. The proposed bill replaces the mortgage-finance giants with a new system in which the government would continue to play a potentially significant role insuring U.S. home loans. After initially scaring away shareholders and about $3 per share ($6.30 to $3.30 on FNMA), both Fannie & Freddie bounced back with high’s of $4.50. It seems unlikely that the feds will make this gamble and shake the already fragile housing market, but ultimately it is their decision. Both are LONG plays with a huge upside and promising history (highs of $70 in 2007 on FNMA).  There is always a risk with any investment; and this is a risk we are all for taking.

Since this is my first post as part of the team, I was asked to bring a gift for you all. Below is a chart mapping a little over a month of Fannie and Freddie. Use it to assist in making your decisions, keep it for your records, or use it as a template for future investments.

FNMA+FMCC

Best regards,

Rosenberg (OTC Daily)

Advertisements