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Are You Nutz? Part 2: FRE & FNM



August 24, 2009 – Comments (5) | RELATED TICKERS: FMCC , FNMA

These goofy things rallied today, to the point where they are pickable again on CAPS (c’mon, folks, what are you thinking?). Did I short them on my Fool portfolio? You betcha.

I like the opinion of one analyst (I herein paraphrase): We continue to believe that the value of these securities is zero.


5 Comments – Post Your Own

#1) On August 24, 2009 at 8:59 PM, russiangambit (28.97) wrote:

Apparently, 5 junk stocks - C, AIG, FRE, FNM and I forgot the 5th, made 20% of volume today.

I don't think institutions are playing these stocks. So, it must be individual retail traders doing this. Unbelievable. One would think a trader would know better. A trader won't stay long in the market gambling like this. Or, these are hedge funds? Then hedge funds must be really desperate.

I don't think this kind of market makes sense to anyone anymore. It is like free for all.

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#2) On August 24, 2009 at 9:44 PM, jddubya (< 20) wrote:

I'm one of those retail traders/investors.... picked up a little bit of both at .69.  Never thought it would make me the cash it has!

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#3) On August 24, 2009 at 9:45 PM, jddubya (< 20) wrote:

Actually, I meant to say "gambler" above...

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#4) On August 24, 2009 at 10:28 PM, BonFete (< 20) wrote:

C is not worth much, but it's here to stay.  Uncle Sam has invested too much to let it fail.  Not a buy and hold but I expect I will have almost doubled my money hen I sell.  

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#5) On August 25, 2009 at 8:59 AM, russiangambit (28.97) wrote:

jddubya, if you are daytrading it with say 10% of your money, there is no problem. But with this huge volume , I am wondering who else is trading it - a) daytrading computers aka hedge funds or b) retail investors, who decided that the market is OK now and are trying to recover their losses through trading junk like this. After all, they've seen that if they bought BAC several months ago, they would've been rich by now. I actually heard 50-something ladies at work talking about it. Imagine that. That is the moral hazard from all the bubbles.

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