Since then, the stock has made an incremental recovery, closing at $5.60 on Monday, down 30 cents. Shares dropped to a 52-week intraday low $3.89 on July 11. Previously Legg Mason had been Freddie Mac's second-largest shareholder, edged out by Capital Research Global Investors. ( Adding 30M shares)īaltimore-based Legg Mason filed as a passive shareholder and listed July 31 as the date when it reached the ownership threshold triggering the filing. At the end of the first quarter, Legg Mason owned 50,244,068 shares of the government-sponsored finance giant. On Monday Legg Mason ( LM) disclosed it now owns 79,880,998 shares of Freddie Mac, or a 12.4% stake. SHARES OF Freddie Mac ( FRE) have been in freefall recently but Legg Mason has kicked off a buying spree at the mortgage lender, becoming its largest shareholder. Talk about throwing gasoline on the fire. While I agree with his recent comments especially for those of us who are not computers and use fundamentals, moves like this boggle me. And still (in my mind) a lot of trouble ahead. Probably his fund has had a few good weeks here on this "buy the junk" rally, but he was piling into those sectors during the winter before multiple legs down. Maybe over a 4-6 year time frame, but for the short term. I saw an article a few months ago about how he was buying financials, homebuilders, and the like and I just felt bad. He took large contrarian bets in concentrated fashion so hence why I have followed him with interest. As I wrote then:īill Miller is a mutual fund manager who had an incredible streak of 15 years in a row of beating the S&P 500 (this ended in 2006). He has fallen into tough times the past few years as we outlined in April. For those of you new to the markets, Bill Miller used to be the mutual fund star - beating the S&P 500 for 15 years in a row.
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