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Best Stocks to Buy Today: Fannie (FNM) and Freddie (FRE)

Posted September 2, 2008

“I just had a client on the phone. He wanted to buy GMAC bonds… By the end of the conversation, he was sold on Freddie and Fannie preferred shares.” — Richard, bond market expert (and friend to Andrew Gordon)

by Andrew Gordon

Baltimore — (TFN):  Last Thursday, Richard – my colleague and the person I turn to whenever I have a question about the bond market – called me.

He wanted to talk corporate bonds. And he knew I’d be interested.

“I just had a client on the phone. He wanted to buy GMAC bonds. I asked him why. He said if GM fails, the government will bail them out. What could be safer than that?” Richard said.

I had talked to Richard a week before about GSE (Government-Sponsored Entity) bonds. So I knew where this conversation was headed.

“Would you be interested in a bond-like instrument with similar ratings but with double the yield?’ I asked him. Plus the government is going to save this company before GM.”

“By the end of the conversation, he was sold on Freddie (FRE:NYSE) and Fannie (FNM:NYSE) preferred shares,” said Richard. Read on to learn why.

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Posted by Andrew Gordon · Filed Under US Stocks and Markets 

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