http://business.financialpost.com/2...housing-market-for-your-tfsa/?__lsa=1c17-66ea
This is one bit of advice that Calgary certified financial planner Shafik Hirani won’t be passing on to his clients.
His plan for his tax-free savings account was to take all his money and invest in a U.S. bulletin board stock called Fannie Mae – the infamous holder of many mortgages that were part of the U.S. subprime blowout.
It worked. Mr. Harani had a balance of $172,382 in his TFSA account as of June 17, easily topping any other reader who has sent in a statement to the Financial Post.
“I wouldn’t give this advice to any client,” he notes.
Fannie Mae and Freddie Mac were placed into conservatorship of the Federal Housing Finance Agency but continue to be listed in the penny stock over-the-counter market because of trader interest.
There has been plenty of interest from hedge funds, as some investors hoped for some kind of recapitalization from Washington after the US$187-billion U.S. government bailout.
“I was betting on the average investor’s need for Dopamine. My degree is psychology. People need their lotto tickets,” said Mr. Harani.He bought the stock in multiple tranches in the 50¢ to 60¢ range about three months ago and sold for $3.80.
“You have to understand Fannie Mae is the highest volume stock in the world that nobody is paying any attention to,” said Mr. Harani. “The stock is essentially worthless but hedge fund money has been pouring into it.”
The stock climbed as high $5.20 in late May as speculation ran rampant, a 1,300% jump from where it was at the beginning off the month. Then reality set in that most of the money being made during the recovery was going back to the U.S. federal government and the odds of some sort of recapitalization were low.
No matter to Mr. Harani, who decided he’d seen enough and decided to sell — a move he made on vacation. “I made the trade from my hotel room, thank God I’m out.”
It’s not all victories. Some of his winnings from Fannie Mae were erased after speculation on a venture-listed stock named Connacher Oil and Gas Ltd. which dropped by 50%.
“You have to understand this is money I have to blow. This isn’t money I have to save for retirement, this is my gambling account,” he said.
For now, he’s has almost almost of his TFSA money in cash, save for a $5,100 investment in some Fannie Mae preferred stock.
