STOCKS THAT WILL DOUBLE YOUR MONEY! (Value Investing)

September 13, 2019

STOCKS THAT WILL DOUBLE YOUR MONEY! (Value Investing). Investing in REIT's vs Paying Down your Mortgage Faster

STOCKS THAT WILL DOUBLE YOUR MONEY! (Value Investing) video duration 11 Minute(s) 49 Second(s), published by Stock Market Investing on 19 05 2019 - 20:52:53.

Why Freddie Mac and Fannie Mae Stocks Are Potential 10-Baggers, 10x, or 10 times your money Is the upside in FNMA and FMCC gigantic? During the Mortgage Investing Company Boynton Beach Visit Us Online https://lordmortgageandloan.com/mortgage-investing/ Trying to find Mortgages to Invest In? If .

Dawn Pitts, Business Development Executive at Ignite Funding, provides her thoughts on why trust deed investing is better than investing is a private debt fund John wants Dave's advice on whether he should focus on paying his mortgage down or invest more
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Why Freddie Mac and Fannie Mae Stocks Are Potential 10-Baggers, 10x, or 10 times your money
Is the upside in FNMA and FMCC gigantic?
During the mortgage crisis, Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corp (FMCC) had to be bailed out by the government or so we were told.
The U.S. government dumped $187 billion into the agencies. In exchange, it was given warrants to buy 79% of the companies, and the investment (which was in preferred stock) would earn 10% of the agencies’ net profits each quarter.
Then the Treasury Department, in an arguably illegal and unconstitutional move, changed the rules so it would sweep out all the net profits of the agencies. The idea was that since FNMA and FMCC as companies were in a death spiral, or so it appeared, and the thinking by the Treasury Department was protecting taxpayer money by taking all the profits and making sure it didn’t have to throw new capital at another bailout.
At least, that was the idea. Instead, to the surprise of no one considering this was a move by the government, it actually puts FNMA and FMCC in worse shape since they are being stripped of their capital.
The result is FNMA and FMCC are now backstopping some $5 trillion in mortgage debt and have no capital. Moreover, while FNMA and FMCC are controlled by the government, it is actually via a conservatorship which is only supposed to last until the companies are in “sound and solvent condition.” Investors are arguing that FNMA/FMCC have not only repaid taxpayers, but the two companies were stolen from investors. Various lawsuits addressing one of the largest cases of thievery in the United States history have challenged this have been shot down so far, but investors remain hopeful.
Not only are FNMA/FMCC profitable now, but they are turning a large profit. U.S. taxpayers have now received back over $260 billion on the $187 billion investment — a $73 billion profit, or 40%. Remember that the companies were only supposed to be in government conservatorship until they achieved “sound and solvent condition.”
What many are pushing for, including hedge fund managers Bill Ackman and Bruce Berkowitz, is for the government to recapitalize FNMA and FMCC. Let the companies do their jobs again, with proper reform.
Ackman’s proposal to reform FNMA and FMCC suggests possibly future value for them between $23 and $47 per share. And now, there is finally serious talk of reform going on in Congress.
Senators Corker and Warner have a proposal that would keep Fannie Mae and Freddie Mac but create competitors, as well as create an explicit guarantee from the government on mortgage bonds that are created under reform. Congressman Hensarling indicated he’d be open to a government guarantee on some mortgage bonds but didn’t want it to be terribly large.
New competitors would have to have stress tests and sell off some of the risks to private investors.
What are the potential outcomes for FNMA stock and FMCC stock? Steve Mnuchin the United States treasury secretary believes FNMA/FMCC are a 2019 story. Steve Mnuchin has already stated he wants to take FNMA/FMCC out of conservatorship. Yes common shareholders could be wiped out because there are preferred shareholders ahead of them. There is a possibility for the shares to go to zero, BUT we aren’t talking about betting the farm here. When the numbers are broken down the United States stole Fannie Mae and Freddie Mac a private company FROM shareholders who still haven’t received compensation. Taxpayers have already turned a massive profit on the bail out by the U.S. government that many argue was unnecessary in the first place. As the clock continues ticking I believe we are getting close to a resolution one way or the other. It’s all or nothing with an investment in FNMA/FMCC and I view the two stocks as options contracts that are skewed in our favor. The only difference is we aren’t paying a huge time premium. Throwing even a couple hundred dollars into these companies and forgetting about it may well be worth the risk because they may potentially be 10 baggers.
President Donald Trump said freeing Fannie Mae and Freddie Mac from government control is a “pretty urgent problem” that his administration plans to work with Congress to address.
Trump, speaking Friday at a conference hosted by the National Association of Realtors, said that the mortgage giants lack competition, that taxpayers remain on the hook for any losses at the companies and that they aren’t being run as well as they could be. He added that his administration is discussing ideas for fixing Fannie and Freddie with “some incredible talent from Wall Street.”
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