In hindsight this should have been an obvious speculative buy once Trump got elected. Ackman already has a 10 bagger and his team is projecting 30+

I jumped in late but at least before the first Trump "tweet".

I just have no idea where to exit. Something something "pigs get fat, hogs get slaughtered". Pershing Square analysis seems compelling. Ackman claims he's holding forever…

Thoughts??

SIL

https://assets.pershingsquareholdings.com/2025/01/16112701/Fannie-Mae-Freddie-Mac-01-16-2025-Presentation.pdf

I've been slowly accumulating shares throughout the years buying both common and preferred. Cost basis for my common is a little over a dollar and around $4 for the preferred shares. With all the noise going on I'm up over 400% and contemplated selling but think I'll ride it out.

Congrats RAGE!
Just up 60% here the past few months but very happy/lucky.
Do you have any thoughts on the report?
I laughed when I read the title…no wonder Trump had to comment….Ackman played that well…

SIL

Same economic conditions and historically unaffordable housing market as right before their major selloff 17 years ago that should have buried them.

Could they go higher? Sure. But I'm not touching with a 10 foot pole.

There are no buyers in this market. Commercial wall of maturities has started and hits in force later this year through 2026. Extend and pretend is almost over and rates are threatening going higher.

Be careful.

The issue is with truly privatizing Fannie/Freddie is that it would raise borrowing costs for mortgages in this country as the implied guarantee would go away. As the Ackman's report correctly points out that the low rate (Yes, even at 7) 30 year fixed is really only an American Phenomenon, and that is because of the implied gov guarantee (subsidy) of the American homebuyer. The president most recent comment on Fannie/Freddie was that if privatized that implied government guarantee would NOT go away.

So, if that is the case, I guess I do not understand the reason to make them "private" when they would really just be back to what they were before 08.

Ackman is also correct in that it was their portfolio of loans they purchased instead of the loans they "guaranteed" that sunk them in 08. That part of the business was long ago wound down. (no, their business is nothing like 08) So, their only business is guaranteeing mortgages that are sold into the world wide secondary market in the form of MBS securities. Those securities are sold at a small premium above treasuries only because of the implied guarantee so I guess my thoughts would be if the taxpayer is on the hook for losses, why should they not benefit from the gains?

Interesting take - thanks!

Quote:

---

if the taxpayer is on the hook for losses, why should they not benefit from the gains?

---

Makes some sense. I'd be fine if the "gains" could be earmarked for deficit reduction, but I guess logically, they should offset the subsidies directly - the annual income statement and balance sheet would be interesting to track. Conceptually, having this program "on the books" could make our proper US credit rating incrementally weaker, depending where we are in the economic cycle.

The Trump proposal is to privatize the gains and socialize the losses. Bad idea.