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Non-Tech : Kirk's Market Thoughts
COHR 139.51+2.9%Nov 21 9:30 AM EST
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To: Kirk © who wrote (1993)10/1/2014 3:30:43 PM
From: ETF1  Read Replies (1) of 26590
 
Prepare for a shock when you look at the total return for today, which is usually available within a few hours after the market close.

Fannie and Freddie (common stock plus preferreds) reportedly make up about 15% of the Fairholme Fund, and they are being taken to the cleaners today.

My wild guess: I believe we could see the Fairholme Fund (ticker FAIRX) down 5% or more.
Any reason for Fannie and Freddie to be down more than the market as a whole?

Yes. Fannie and Freddie are quite profitable, but their fate and very existence hangs in the balance, to be decided by the government. Even though they make up a huge part of the mortgage market for single family homes, they may be "terminated" by the government. So the result of shareholder lawsuits is very important.

"Common and preferred shares of federally controlled mortgage-finance giants Fannie Mae and Freddie Mac lost half their value before trading opened Wednesday, following a judge's decision to dismiss an investor suit.........On Tuesday a judge dismissed investors' claims over the government's taking of Fannie and Freddie's profits."

news.morningstar.com

Do you own FAIRX or just follow it for stock picking ideas?
I owned it for 11 years, but no longer do. But it's worth following. Bruce Berkowitz is a very smart investor. Take a look at his returns during the bear market of 2000-2002. He opened his fund 12/29/1999.

Year 2000: Up 46.54%
Year 2001: Up 6.18%
Year 2002: Down 1.58%
Year 2003: Up 23.96%
Year 2004: Up 24.93%

what bear market?
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