This Is Why I Don’t Short Financial Companies Like Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE)

18 Responses

1. 1Superman(TIMBUCKS: $28)

   July 13th, 2008 at 9:38 pm

   

   Tim,

   That agrees with something I have always thought/seen

   great news can trump charts

   should be a wild week

2. 2AdamN(TIMBUCKS: $61)

   July 13th, 2008 at 10:11 pm

   

   Wow, glad I stayed disciplined on Friday and stayed out of a VEEEEEERRRRY tempting play on FRE to short. As a pennystocking student, I decided it best to stick to microcraps and let the big boys handle the likes of FRE and FNM. No place for a newb like me, hopefully soon I can be in that other tiny niche we seldom talk about, that is the 10% that ARE actually making money.

3. 3Adam

   July 13th, 2008 at 10:43 pm

   

   I cannt imagine why anyone would have shorted those over the weekend, FRE and FNM nearly made back all of their pre market loses in one trading session. ~50% come back in one day should be a clear indicator that these things are going to keep going up. FRE @ 3.xx please, their debt is tied to tangibles in the trillions

4. 4The Chad(TIMBUCKS: $46)

   July 13th, 2008 at 11:12 pm

   

   Is this a guaranteed plan by the Gov - if it is, could it be a good play? .

   http://apnews.myway.com/articl.....7RHG0.html

5. 5The Chad(TIMBUCKS: $46)

   July 13th, 2008 at 11:17 pm

   

   Even more of a reason? This almost sounds like you are buying a tax lien, if you pick up shares…

   Fed offers to lend to mortgage companies, Treasury plans possible equity investment.
   http://apnews.myway.com/articl.....7VL00.html

   A new American reality: The government as provider
   http://www.iht.com/articles/20.....rantee.php

   Statement from Paulson…
   http://www.bloomberg.com/apps/.....=worldwide

6. 6Jorge

   July 13th, 2008 at 11:37 pm

   

   You can have this argument both ways.

   At the “Green On The Screen” chat room we all had fun playing into the momentum of these stocks.

   I remember a guy just playing it with market orders cause the vol was so high he always got in at a good price and played it both ways the whole day making a lot of money.

   Sure, FRE in hind sight would have been a shorting disaster, if you would have tried to predict it before the market opened.

   Otherwise the volatility and huge volume made it very fun to make $$$ on.

   Jorge

7. 7The Chad(TIMBUCKS: $46)

   July 13th, 2008 at 11:51 pm

   

   Good point Jorge… I’ll prob pick some shares, simply because it really can’t fail - at least not as quick as it probably would have, before the Federal Government stepped in…

8. 8timothysykes

   July 13th, 2008 at 11:59 pm

   

   yes but if u have a small account, the low odds make it not worthwhile, especially since u’re limited in how many trades u make aka u scalp too much and you’re forced to hold overnight and risk a disaster like this either way

9. 9The Chad(TIMBUCKS: $46)

   July 14th, 2008 at 12:05 am

   

   Good point Tim… What action, if any are you going to take?

10. 10Steven

    July 14th, 2008 at 12:22 am

    

    He just told you: NONE.

    This is a news driven guessing game and when you’re subject to Pattern Day Trading Rules, you unfortunately only have 3 chances a week to get in and out of a position.

11. 11Fantom(TIMBUCKS: $197)

    July 14th, 2008 at 1:09 am

    

    True Tim,

    This why your the teacher and I’m the student, and I’m short FNM, shit!

    How long do you guys think IDAE will run up?

12. 12Steven

    July 14th, 2008 at 1:33 am

    

    You better dump that early…man, talk about a short squeeze.

    As for IDAE, look at the chart. That’s a multi-day, possible multi-week runner. It’s a perfect breakout. As Tim said, $3-4 should be easy on this one. The fact that the stock has few shareholders/few sellers means it could absolutely skyrocket on any piece of good news this company releases.

13. 13Fantom(TIMBUCKS: $197)

    July 14th, 2008 at 1:46 am

    

    Dumpin man, dumpin

14. 14ivegotstylekid(TIMBUCKS: $188)

    July 14th, 2008 at 7:17 am

    

    surge on the news and squeeze the fuck out of the shorts, today should be a good day

15. 15timothysykes

    July 14th, 2008 at 9:25 am

    

    morning watchlist:

    http://www.timothysykes.com/ti.....-to-watch/

16. 16oops

    July 14th, 2008 at 3:36 pm

    

    Guess not.

17. 17Brian

    July 14th, 2008 at 5:31 pm

    

    Well, it looks like topping 9.80 only gave the short sellers a larger profit margin today on FRE.

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