The (Somewhat Less) Sad Saga of Freddie and Fannie Continues

Freddie Mac announced a surprise profit on Friday and indicated that they did not need more government money at this time. This was greeted enthusiastically by the market after the close, with FRE moving up $0.54 (73%) in after hours trading on Friday.

Is Freddie on the mend? Time will tell. I personally hope so as I have a long and unpleasant history with this stock.

While working at an investment bank this past July, I decided that FRE was unlikely to be allowed to fail and bought several thousand shares at $4.75 a share. I was pleasantly surprised to be up over 100% on the position the same day I bought it. Needless to say, I wanted to take my profit! But I could not, as the firm I worked for at the time required that I hold all my positions for at least 30 days. By the time thirty days had passed, FRE had fallen well below where I bought it.

Now, more than a year later I still have this dog! I bought more at $0.70, so I am now within smelling distance of being even on the overall position. Hopefully I can get rid of this thing soon. But knowing my luck with this stock, I will sell it just before it explodes upwards!

Incidentally, there is a delightful news headline on this stock today: "Columbine Capital Services, Inc. upgrades FREDDIE MAC from NEUTRAL to UNFAVORABLE". This is an upgrade?????