FNMA

[fishbone]

I bought Fannie Mae when it was .20 and now it is .37.... pretty good increase... does anyone have thoughts on if this should be a longer term hold or is this just a jump on a couple good pieces of news?

[skiehawk11]

Look at the underlying business model of Fannie Mae. It is basically buying failed loans from the private sector.

Fannie Mae is influenced by interest rates and by legislation. There have been talks of allowing Fannie Mae to go bankrupt. The main reason Fannie Mae hasn't gone bankrupt is due to the federal government propping it up. As long as the federal government keeps Fannie afloat I would play the short term trading.

For instance when bad news hits. Buy some shares and when some good news hits sell it and wait for some bad news again. As long as the government is there to bail them out I would take advantage of trading the bad news.

Of course, this is my own opinion and could be terrible advice.

[fishbone]

Yeah, that is what I am wondering.... what are the chances that that the gov will let them fail and go bankrupt? what are the chances that they will still be around in 20 years? I know it is impossible to know, but I am just interested in some opinions...

[crondanet5]

fishy, how much more do you expect it to move up, in what time frame, and what was your pre-determined sell price? Those factors tell you how long you hold it, not if the government will let it go bankrupt.

[fishbone]

well, initially I was thinking of just putting a couple hundred in and let it ride indefinitely as a gamble... but I have been looking at the past performance and I see these spikes for short term with the bottom being at .20 roughly. So, I bought a lot more on recent activity and I could sell it for a nice profit now expecting it to fall back to the bottom or just let it ride long term since I got a good price. So, what I am trying to figure out is... 1)-most likely- is this just another spike and should I just try to make money on the spikes or 2) -possible- is the trend reversing right now or 3) -least likely- is Fannie Mae going to most likely survive and I should just wait long term for possible great gains..... the money I have invested in this is specifically designated for a gamble... I am still trying to develop a strategy, I am new at this

[Jahbulon]

Fishbone,

Inthemoneystocks.com is pushing TQHI. It is at $0.63.

Just food for thought.

[fishbone]

Jah... did you mean THQI? the video game company?

[crondanet5]

fishy, my experience with trading stocks is follow the spike moves, buy and sell accordingly. That's as close as I'll get to advising you on when to sell FNMA.

[crondanet5]

JAHB, I checked it out on nasdaq.com interactive chart. In one year it has dropped from $6 to $0.63 a share. It did pop up to $0.74 recently, but then back down. If they don't have some huge game about to come out on the market I would caution against buying it unless you were a seasoned day trader.

[fishbone]

ok, I understand cron... thanks! now, about the THQI... what is the fear? that if you buy you may be stuck longer than you like until it turns profit or that the stock will never go any higher.

[Jahbulon]

I'm just gonna sit on it. They have over a $1 per share in cash. Perfect buyout candidate.

But in the end, it is to each his own.

[crondanet5]

I'm thinking about daytrading it if it moves sufficient shares.

[fishbone]

yeah, I was wondering what happens if they get bought out. What happens to the shares you own. Are they converted into shares of the parent company?

[fishbone]

oh yeah, I sold FNMA this morning for a nice profit and it is dropping. I think I will buy again at the bottom.