I know there are a lot of sophisticated smart people on this board.
I deal with a money manager that I consider to be savvy. He wants to buy me MA. He thinks that the earnings are going to be teriffic and has explained to me that MA has no credit risk. Okay, I partially understand that they may not have direct credit risk, but it still seems in this economy that MA would be very risky, and that the economic downturn would make this an undesirable and unsafe stock.
I love making money... I look at the economy, and everyone is cutting back. People aren't shopping like they used to, and it would seem to me that the number of credit card transactions in this environment would be fewer. I'm not spending like I used to!!
It would also seem that people that are stretched are and experiencing lower credit limits.
Therefore I can't understand why this is a good stock to own.
How can MA be immune from the Types of selling I have seen in AXP and COST?
I am just not understanding why I should buy or invest in this company.
I appreciate guidance.
I know I can take in a lot of money if I buy the stock and sell covered calls, but I do have some concern.
I have owned 600 shares of Mastercard at around 100/share. So many times I was told to sell the stock for exactly the same reason mentioned on this board. The fact is there is a very strong move from cash to plastic. That move coupled with the emerging market and European growth offsets the weak us growth. If you wait till after earnings you will miss the 15-20% run up. FYI Mastercard indicated last month that they will be growing 20-30% this year instead of 15-20%.
The problem with buying after earnings is that you will miss that 10-15% jump the stock will experience and instead have to settle for a much smaller gain. True, there is always more risk when you go in before earnings but that is exactly how a smart investor increases his/her returns. In the past 5 months I have been rewarded twice and punished once in this sort of a scenario. GOOG past past Q results caused an upwards acceleration of 20% (!) in one day and I was rewarded but GOOG's recent Q results caused a 10% negative hit! And then I stuck it out with BIDU and was rewarded with a 12% plus rise in just 1 day after earnings!
MA is definetly a buy before earnings because there will be a short squeeze starting on Monday. Others that have held to see how low MA could be taken down will also join in the buying opportunity. There is a lot of $$ on the sidelines and they will jump in this week. I bought some last week, but I was looking for the large volume to start before putting more in. When you add to your position when there is a short squeeze occurring, it stresses the stock price and the longs and it rises more. MA is a great company with global exposure and will also profit from the week dollar. Also there could always be a stock split annouced which will send the price higher. So listen to your advisor and get in soon. PS all the negative comments ou have read have been from people who will be having to cover their short positions next week. (OVER 8 million shares)
Barron's This week:
We are seeing very affluent people who have had historically very, very strong spending history with us cutting back," said CEO Kenneth Chenault.
Real-estate wealth, inflated by a never-ending flow of credit, has been the driver of spending all the way up the income scale.
Anyone thinking that V and MA are immune are INSANE
MA TO 225 BY SEPTEMBER
Again, you are speaking with reference to Amex which is a predominantly U.S. company.
MA has already stated that they softness in the U.S. however strong growth overseas combined with switch from cash to plastic in emerging and developing economies they expect will fuel their revenues. If you were correct in your prognosis then many companies such as IBM, Caterpillar and others who have strong international exposure should suffer because they experienced weak growth in the U.S.
You have a U.S. only tunnel vision. Get out and see the world!
good question knowit
check my blogspot blog on that <<http://matrader.blogspot.com>>>
one thing to note is that the high gas prices has affected sentiment and consumers have turned cautious. i am too not spending much, but whatever i spend it goes in my card.
ma gets 50% international revenue international and plastics is just starting in those place. citi showed an 18% increase in card revenue and they are major mastercard issuer.
ma debit space is also growing although visa is a numero uno in debit space.
online purchases are healthy and google grew eps by 35%, amazon had stellar quarter, netflix pretty good quarter. internationally mcdonald's, caterpillar, google, apple, amazon are showing huge growth.
american express international revenue grew 18%!!!!!
checkout the blog for more details.
VERY HELPFUL BLOG POSTS! Helps put in perspective the wild swings the stock has experienced especially for the novice investor. The machinations that big money can play with the stock are fascinating! However, as you put it, hang in there, don't worry about the wild swings in the stock -- MA will deliver! A question for you -- what is your gauge on how Visa will do with their earnings? Whatever happens in Visa will have a ripple effect onto MA either propping up the stock prior to earnings on Thursday or deflating it!!!