Berkowitz Liquidates

[FreeFannie&Freddie]

https://www.bloomberg.com/amp/news/articles/2017-10-16/berkowitz-liquidates-hedge-fund-that-owned-sears-holdings-shares

Hmmm, Go Figure...

Not A Recco...

[Joe W]

Hedge fund

Not the mutual funds

[seysmont]

That explains why preferreds downtick. His hedge fund is about half his total position, and he owns under 1/3 of a fund. Somebody will make all the money with no risk and no liquidity constraints because they pushed out Berko. For all you know that was the reason for all delays, to shake somebody big out of a sure shot. Nothing surprises me about this country anymore. 

[keyow...@gmail.com]

@seysmont

Not working for me. Can you say more?

[FreeFannie&Freddie]

That’s really Stretching hard to sell the junior preferred story now....

Go Figure,....Not A Recco...

[seysmont]

Stretching what? Why do you think the preferreds underperformed? There is no reasonable case scenario when the commons make out better. If you factor in the guy selling them in a liquidation or about to sell them, the story makes sense. Bonds of companies where the holder is liquidating also trade at stupid prices. It means the bond holder is getting ripped off. Same thing here.

[mhill_fin]

CBS, you failed the test. Go study Berkowitz's annual reports and turn in your corrections for a regrade.

[joseph s]

On the re-grade, you can only get a max of 80%. Remedial students should sit in the front.

Go Common Securities Solutions, LLC!!

Hey mhill, can CBS or Camaro delete posts that say the prefs are likely a better bet than commons on this board?

Not a recco

[joseph s]

Also confirmed earlier by several folks, they had zero fnf prefs as of last filing 8/14/17

[mhill_fin]

Joseph, no contrary to popular belief, the Google Groups message board does not drive public policy nor the stock price. Thus no need to monopolize the narrative. So no, no deletions of that sort are in order on this board.

[joseph s]

Oh, shit! I thought that our posts made the stock move. Not even a "butterfly effect"?

I also thought that being an interested observer made me part of the game. Jesus. CBS and Camaro have led me astray. I hope they at least retweet my "not a recco" to see if it moves the stock

[Wayne Z]

Nothing we do or say here or at the other board will effect the outcome. I am going to chill out and wait it out with my P shares.

[joseph s]

P shares! You fool! Idiot! Charlatan! The horrors!

NOT a recco

[ron...@comcast.net]

Weird but the merits of the legal contracts remain solid. Pfds will do great. Some pfds are an absolute steal. Others "only" a 3.5 bagger.

[Big Bruce]

Just to confirm...

The liquidated fund is his hedge fund, not mutual fund. It's in the mutual fund that the F&F shares reside.... Correct? 

[joseph s]

Correct. Although the pumpers will likely continue to mis-inform

[seysmont]

They reside in both funds. The ones in hedge fund are getting liquidated. Maybe his own stake will be liquidated too, there is no word on that. About 1/2 his SHLD was in the hedge fund, and his personal stake is under 1/3. I would assume the same break out of the GSE's shares too.

[44 cents aka Chocolate Cake]

I could really use a pep talk right now.

Should we front run and dump? 

What if Perry abandons his case and liquidates?

[joseph s]

Lol absurd. Yup. Just keep shorting.

[neo]

Whether you know it or not Joseph, your swift reply and its content performs an important adminstrative function.

On a related note I've been wondering what payoff the real Choco Cake received, if any, from the settled case he was involved with....

[joseph s]

Yeah. By law they cannot disclose. I think it is important that one firm settled. You dont settle unless something was done wrong.

[neo]

FWIW...I think he was in on the auditor suit and I believe all indications were that it didn't go well for shareholders .... I could be wrong on both recollections though

[dgj...@gmail.com]

More likely that somebody visits Robert's in chambers and SCOTUS solidifies Lamberth's ruling. Why would Perry give up just as Scouts starts?

[seysmont]

And the selling started today. 

He should swap illiquid ones with FNMAS & FMCKJ for the mutual fund, because there is no selling those. Sell mutual funds liquids for illiquids and realign later. This will go on for a year at this pace.

[ron...@comcast.net]

Liquid ones were getting ahead of themselves relative to 50s. Investors (new) will pick them up after a correction. Those who own them should consider dollar cost averaging on the way down or if they have no cash reserves, selling a portion and parking the proceeds in common (just stay in the game), then sell those commons to pick up the same pfds again, probably soon.

[Candy Finnigan]

I'm going to put a bid at $10,000 for FNMFO. That's where is was trading in October. If it fills, it tells me a hedge fund that knows more than me is selling to me, and that would be bad.

[seysmont]

He will not sell them in size any time soon. The only real way for him to sell is to dump them to his mutual fund instead of the liquid ones, and reshuffle later. But that's clearly not what's happening.

[ron...@comcast.net]

Yeah Candy. He'll take a 50% hit just for you.

[Candy Finnigan]

I'm also buying Teva at a 50% discount to what Paulson paid! Any of you guys like generic drug makers? Mylan looks sexy!

http://www.schroders.com/getfunddocument?oid=1.9.2228909

[littlede...@gmail.com]

XXX....you should stick with not a recco becauae buying commons today will likely bring a short term loss. The trend is a sell off in Preferred the commons will follow with a correction. I would be a buyer from here on preferreds not sell and if you do sell you park it in cash and not commons....not a recco but talking from experience....go figure...devil

[littlede...@gmail.com]

You dont sell low and buy high...that is a no no goober....go figure... devil

[ron...@comcast.net]

"You dont sell low and buy high...that is a no no goober....go figure... devil"

As a general rule but very simplistic. If a stock breaks through resistance, it is at a high but only relative to the channel it had been trading within. That high becomes the support level for the next leg up.

That's beside the point anyway. If somebody wants to exit a class of stock while staying with the long term thesis about the overall trade, parking it in common is the only play lest you exit the trade altogether.

[littlede...@gmail.com]

Park it in cash. Mark this post. Da devil is always right. You never buy low and sell high. Never...there is another option if you want to stay in....buy a cheaper preferred in your class....if you hold the cheapest one ron, sell and book it....there is no harm in exiting fnf for awhile. I did. At one point i sold all during the run...the rumors were right...i did exit and later bought back in..no shame in holding cash....go figure....devil

[littlede...@gmail.com]

Goobers can do what they want...but selling Preferreds to buy commons will likely double your loses in the short term. If da devil was advising lets say seysmont...da devil will tell seymont...no no buy commons if you just sold u preferreds becuz you will likely double your losses.....go figure....devil

[ron...@comcast.net]

As always, you've misunderstood.

[ron...@comcast.net]

LD,

Given your oversimplification, you would have recommended holding all stocks purchased the day before "9/11" rather than immediately selling them lower with the plan of buying them back much lower. Your paradigm of not selling low after buying high would have kept you locked in until rock bottom.

Short on nuance and long on cliché is no investment strategy.

[littlede...@gmail.com]

Now now...do not twist what I am saying....no need to argue...time will tell....it our case we will know by end if day monday. 3 days. Commons will correct down. I am not bashing commons...your analysis is full of flaws which i will not correct. Time will tell Ronny....;)....tree days....go figure...devil

[fwc...@gmail.com]

Thanks for your thoughts LD. I've gone to a fair % in cash. It's tough to watch the market go up up up since.

[joseph s]

I would feel better about TEVA than VRX from our discussions before. (Earlier this yr.) It may be a single digit midget before this is over, though.

CMG still looks juicy. I think it keeps dropping.

Not a recco.

[littlede...@gmail.com]

Look Ron.... That cliche made me monies. If it make monies it dont matter if it is a financial cliche or a nursury rhyme....if a cliche makes monies da devil recommend you pay attention to it...now that is a recco...go figure...devil

[ron...@comcast.net]

You are a stupid man.

[joseph s]

Just admit you guys love each other...

We are all stupid at times.

Not a recco

[seysmont]

The max pain is they don't converge. People who hedged, will be squeezed. This is the main driving force of this market, dislocation of liquidity. No sellers in common but a forced seller in preferreds. You assume people would sell common and buy preferreds, but so far they are not doing it.

[littlede...@gmail.com]

Come on Ronny...time to put some monies in Ronny's pockets....repeat after da devil...

The king was in his counting-house,
Counting out his money;
The queen was in the parlor,
Eating bread and honey.

Mo money mo money....moe monies......hehehaha....go figure...devil

[littlede...@gmail.com]

Lesson #2. No monies no nutding...

Simple Simon met a pieman,
Going to the fair;
Says Simple Simon to the pieman,
Let me taste your ware.
Says the pieman to Simple Simon,
Show me first your penny;
Says Simple Simon to the pieman,
Indeed I have not any.

.....see ronny what is truly stupid is if you have no monies...and selling low and buying high will makes Uz dat....take dat to da bank....go figure....devil

[Candy Finnigan]

Let us make one assumption, and I am not saying the assumption is correct.  Assume the market was rational and correctly priced November 1, 2016.

FNMA $1.70

FNMAS $3.96

If goober is trading relative value, he would be selling fnma and buying FNMAS.

Commons up 82% and pfds up 67% since the election.

Alternatively, consider closing your eyes and thinking about how much money you would have if Hilary was elected and Liz Warren was running Treasury, HUD, and FHA. In that situation, all fannie profits would probably go to building affordable housing. The stock would probably be trading down.

Maybe consider taking your profits over the last year and having a celebration party about all the money you made with Trump.

The entire fannie trade is pure speculation, and the number of funds that it has taken down is staggering. You shouldn't be embarrassed about getting a profit and running.

Alternatively, you have to ask, if this stock has taken so many people and funds under, why is it still trading as if it has value? There must be a new player accumulating that you don't know about. Any day now, it could be headlined across America that Carl Icahn has a 30% stake and that he has a take-over plan with Bill Ackman. With that type of announcement, stock would double overnight.

This is an intervention!

https://youtu.be/nSqyPZZB-u8

[littlede...@gmail.com]

The hedgefunds that closed were not becuase of fnf. Fnf actually most likely made them money. Those hedgedunds closed because they were losing money on other bets and because of customer withdrawls.

I believe the recent preferreds selloff was from fairholmes. Now we know.

I am not going to rely on the courts for this play. The outcome for me is the end game moving forward and the utility model.....go figure...devil

[mhill_fin]

Thanks for the pep talk Candy. Next time throw a chair or something.

[Letgoofmyfannie]

Thanks, I need this Intervention:

GSEs: Now, Not Later

https://youtu.be/k-sbOn4us5A

GSEs now, not later 

End the Net Worth Sweep 

Restore shareholders' rights 

Build Capital reserves 

To have no buffer isn't too smart 

End the Net Worth Sweep now 

before it's too late.

September 6th 

marks the ninth anniversary 

Of shareholder rights 

being seized by the Government;

With no intent for them 

to ever be returned,

Or better yet their profits all swept 

away.

GSEs now, not later 

End the Net Worth Sweep 

Restore shareholders' rights 

Build Capital reserves 

To have no buffer isn't too smart 

End the Net Worth Sweep now 

before it's too late.

Don't make a mistake 

With twenty percent of the economy 

A liquid mortgage market

Equals a strong housing one 

Don't make a mistake, 

by saying “let ‘em eat cake” 

or in time you will find taxpayers 

will pay...

GSEs now, not later 

End the Net Worth Sweep 

Restore shareholder rights 

Build Capital reserves 

To have no buffer isn't too smart 

End the Net Worth Sweep now before it's too late.

End the Net Worth Sweep now before it's too laaaaaaaaaaaate!

—I’d like to hear Kid Rock try n top that…

[seysmont]

It looks like Berko is out of the liquid ones. That was the problem with preferreds. I wonder who took his place.

[Big Bruce]

Are you saying he liquidated all his ownership of preferred stock? 

[seysmont]

Seems like it. I'm sure he is an offer in illiquid ones, but he blew out of the liquid ones. 

[Candy Finnigan]

My fear on pfds is that Berko is has not sold yet. 

I read that he is distributing shares (not cash) in the redemption and letting his investors decided whether they want to sell or hold.  Perry could end up doing the same thing.  

What the fug do I know? The shares are so illiquid that even little Glen Bradford could send shares tumbling after his credit card companies forclose on him.

[Duncan Macleod "Beta"]

how come y'all dont think Bruce B might have known the 50's were illiquid. and did not know in advance the he was going to shut down the hedge and keep the mutual fund.  HOw come y'all dont think in advance of this he made some discrete moves without showing his hand?

Also not sure how many illiquid pfds the Hfund or HFunds had, I think there was at least one offshore account. 

He Does have a fiduciary responsibility to both the HF and MF, so no hanky panky allowed.  There have already been some large pfd moves in the past two months.So maybe, just maybe he was thinking in advance?

[Big Bruce]

Didn't we see a breakout recently of his preferred allocations? Mostly in FNMAS...But i thought I saw a breakout of ownership at one point. 

With the 7M volume recently, I'm certain he sold some shares. He's not entirely out though. 

[seysmont]

So who is a $9 offer on a bunch of Freddie $50s?

[Duncan Macleod "Beta"]

BBruce,  i must have missed it.  its he HF we want to see mostly at this point.,  although would not hurt to see the mutual funds as well

[littlede...@gmail.com]

Me. ......buy low... i like that...at least buy lower....

Wez simple simoms like to buy lows...got a few orders in below 9 too....go figure....devil

[littlede...@gmail.com]

2500 fmccl are da devils filling on ave 8.90ish. No other fills....fmcci ask is 9...no fill...go figure....devil

[welter...@gmail.com]

Got it. In other words, we have no idea how much he holds in his HF. We know that F&F amounted to roughly ~35 of his MF. 

[Duncan Macleod "Beta"]

so i found this in an SA Article for fairholme - i think its the fund?

https://www.google.com/search?q=berkowitz+fannie+holdings&oq=berkowitz+fannie+holdings&gs_l=psy-ab.3...49427.52322.0.52587.14.14.0.0.0.0.195.1228.6j5.11.0....0...1.1.64.psy-ab..3.10.1032...0j35i39k1j0i22i30k1j33i160k1j33i21k1.0.JKupx-AzLQQ

https://seekingalpha.com/article/4099013-tracking-bruce-berkowitzs-fairholme-portfolio-q2-2017-update

[joseph s]

Looks like it. Loaded w fnf prefs just like Jeffy said!

Not a recco

[Big Bruce]

This is the fund that was dissolved:

Fairholme Partnership Lp

https://whalewisdom.com/filer/fairholme-partnership-lp#tabsummary_tab_link

There's no info, that I can find, stating how much (if any) F&F shares were in the fund. I assume that there was a decent amount given the recent volume we've seen in FNMAS. I don't think he sold off anything in his MFunds.... This makes me think he actually had an (overall) larger position that I initially thought. 

Just my quick observations.