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Fannie Who?
Fannie Mae (FNM) has been a bastion in the finance world for many new and moving up homeowners. Until the subprime crisis, I'd have called the stock a bedrock in any portfolio.
Fast forward from high praise to current conditions. My message is to run, run, run from this and most of the financial stocks. Sure value players are probably casting gleeful eyes at Fannie now that the price has dropped precipitously. But waiting for the rise in value stocks in the financial markets today will be like watching grass grow in September; it will be a slow, arduous process.
Currently several analysts have a sell rating on the stock. There is a big reason for all of this and they have even more insight into the numbers than many of us.
My suggestion is to wait. Watch the economy post this phoney stimulus mess and then evaluate Fannie very closely. She may show some life in 2009 or 2010, but I'd let the stock rise closer to 30-32 range to see if it can hold. I'd be afraid to tie up good money in hopes that it might go up, because it could sit for ages with all the headwinds the economy is facing.
Get more insightful advice on the economy and other stocks in the news on Rebecca's blog, Liquid Gold.
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