Quote:
Originally Posted by Gt-R R34
Not necessary a bad thing, *depending where he got in* imho. Those 2 are too heavily backed by the Feds to have any issues with them. (if they go under 1.3trillion dollars of insured-mortgages go down the tube.)
http://en.wikipedia.org/wiki/William_H._Gross
Bill Gross has over 60% of his bonds in Fanny and Freddy, that does tell you something. |
On margin is not a bad thing?
Not bad until your stock is down 89+%! Average margin account interest is about 6-7% annually.
Basically the FNM position is a "write-off". In order for $1 to bounce back to $5.. you need 500% gain! While you wait for that, you have to pay interest on the margin.
Hope that he only have invested few thousands in FNM.