Here’s the thing about Bill Ackman: when he tweets about stocks being “stupidly cheap,” people pay attention. And this week, the billionaire hedge fund manager did exactly that—except he wasn’t talking about some hot tech startup or trendy AI play. He was talking about Fannie Mae and Freddie Mac, the mortgage giants that most people associate with the 2008 financial crisis and government bailouts.
Ackman’s take? These companies could deliver 10x returns from current levels. And get this—Michael Burry, the guy who literally called the housing market collapse in “The Big Short,” jumped into the conversation to agree. When two of Wall Street’s sharpest minds are singing the same tune, it’s worth paying attention.
So what’s the deal? Both Fannie and Freddie have tanked roughly 40% this year, making them look like absolute bargains on paper. Ackman’s argument is straightforward: these are high-quality businesses trading at fire-sale prices. He’s not alone in this thinking either. Burry disclosed a massive stake in both companies back in December, and he’s been pretty vocal about why the narrative around them has shifted.
Here’s the context: yes, Fannie and Freddie were major players in the subprime mortgage mess that nearly torched the global economy. But Burry’s perspective changed when Trump came back into power, partly because of certain policies the administration has been floating around potentially taking these companies public. That’s a game-changer if it actually happens.
The broader point Ackman is making goes beyond just these two stocks. He’s saying that in a market spooked by geopolitical tensions and economic uncertainty, quality companies are being thrown out with the bathwater. The market’s been jittery—oil prices are climbing, the Iran situation is creating volatility, and investors are nervous. When fear takes over, good businesses sometimes get punished unfairly.
Ackman’s message? Ignore the noise. Some of the world’s best businesses are trading at genuinely attractive prices right now. It’s one of those rare moments where the risk-reward setup actually favors the patient investor willing to go against the crowd.
Now, should you immediately dump your savings into Fannie and Freddie? Probably not. These are speculative plays with real risks attached. Government policy could shift, housing markets could deteriorate, and there’s no guarantee these stocks hit 10x returns anytime soon. But the broader principle—that fear creates opportunity—is something worth considering.
The real takeaway here isn’t necessarily about these two specific stocks. It’s about the mindset. When legendary investors start talking about asymmetric opportunities and calling quality assets “stupidly cheap,” it’s worth asking yourself whether you’re being too cautious. Markets reward those who can stay calm when everyone else is panicking.
Whether Fannie and Freddie actually deliver those 10x returns remains to be seen. But Ackman and Burry’s willingness to bet big on them suggests they see something the broader market is missing. And that’s exactly the kind of contrarian thinking that tends to pay off over time.
