Visa: Why I Sold All of My Shares 104 comments
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Fortunately, I don't often write up a stock like Visa, which I just reviewed on May 29, 2008, suggest a "Buy" rating, buy shares of the stock and then, two weeks later, sell them. However, that is exactly what has happened!
On May 29, 2008, after a partial sale of Copart (CPRT) on a gain, I purchased 70 shares of Visa (V) at a cost basis of $86.03. Yesterday, with the market once again under pressure, Visa shares were selling off, and as I wrote this post, were trading at $78.14/share, down $2.17 or 2.70% on the day. When they passed my 8% loss level, I initiated a sale and sold all 70 shares at $78.99. This worked out to a loss of $7.04 or 8.2% since purchase.
After an initial purchase of shares, no matter how much I 'like' a stock, I sell my shares should they decline to an (8)% loss. Since this is on 'bad news', I do not plan on replacing these shares, but instead am now back to my five position level, my minimum, and shall wait either for a sale on bad news (which I shall in this case find a replacement for), or a sale on good news to be buying a new position. 'Good news' for me is a partial sale of a holding at an appreciation target reached.
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This article has 104 comments:
In case you haven't noticed, THE WHOLE MARKET IS GETTING BEATEN UP!!! Visa is not being singled out. Visa is a world leader in transaction processing for plastic money and has no exposure to the credit crisis or any of that crap. They are simply a tollbooth for purchases made with a piece of plastic bearing their logo. they collect a transaction fee from the bank issuing the card! They do not extend credit. They are a long term buy-to-hold scenario that will make it's investors very wealthy. They will be reporting exceptional earnings quater-after-quarter! Why? Because nearly everyone in the world (except 3rd world countries maybe) has either a Visa credit card or Visa debit card, and they use it! More and more, people are pulling out the plastic to pay for items. It's convenient, and quick. Watch out for a blockbuster earnings report for the quarter filed just after the Olympics!
Sure, Visa will take it's beatings, like every stock out there. But, smart people stick and hold it. Look at MAstercard trading at 300 level, and it's not anywhere near as big as Visa. They don't even have nearly the quantity and quality of products Visa offers! No body does!
So, to buy 70 whole shares, hold it for a week and sell is absolute stupidity! I would be embarrased to write an article for the whole world to see that touts that! You're an embarrasment to investors with a brain and a little common sense.
Hey, why don't you go buy 1 or 2 shares of Ebay? It's at a rockbottom price now! Becareful, it may fall .10 cents and then you'll sell and go crying to your mommy again!
Also, the legislation going to Congress now aims to reduce the transaction fees cards process, but this will not hurt Visa. It will mostly hurt the banks who get much more of the transaction fee than Visa does. The government doesn't want to hurt the banks, so don't expect that legislation to pass, and if it did it's going to be trival to Visa who dominates the world transacting market.
The founders and majority owners of Visa are very lucky and smart people to have come up with a company that is literally the future of money, us investors in V will only benefit, some of us greatly.
By the way, V is the coolest stock ticker symbol ever, buy it just based on that haha
I bought in the $60s and I'm waiting, taking a long hold...buying a stock and then selling it two weeks later tells me you didn't do your homework, at all and are just kneejerking based on daily price fluctuations.
Do you use cash? Probably not. Nobody under age 30 uses cash ever, age group 30-50 uses almost no cash especially when times are tough, and the oldies use cash to buy the outdated newspaper (sorry Dad) haha
According to Visa in 12-18 months the majority of Visa's transactions will come from countries outside of the US. There are literally 6 billion people in the world who are just learning of a Visa card (except in Europe where it already widely used)
They have lost every shred of credibility with me if the author's affilation is true.
Except for maybe popping onto their website from time to time to get a good laiugh, I am fini' with these people.
This is the goofiest way of investing that I ever heard of.
Here is a stock that has great fundamentals,is recommended as a BUY by nearly every pro,etc. and then gets sold just because it dropped to some arbitrary % is nuts!
They say laughter is good for the health so do you have any other stock tips that can help me laugh my way to lower BP?
Right now it is back up to $79. Hello! This guy apparently has no stomach for volatility and should stick to something nice and safe maybe a high yield savings account would be more his cup of tea.
and why you rated visa as a hold , just because u are losing 8% from 70 shares holding?
the worst thing is you close it at support 79.
If you do short term trading , you should Cut loss when Visa hitting 88 and did 4 box reversal...
You recommend people to buy Using PnF charts, but You don't even know how to read and act according to it
This friggin' idiot dumps his stock after an 8% loss in a week? And what took him so long to get in, anyway? After kicking myself for not getting in on Google's and Mastercard's IPOs, I scraped up as much $$$ I could afford and got in the 1st day on Visa (175 shares at about $58). Even with this mild downturn, I'm sitting pretty and will probably buy more this week if it stays below $80 (25 shares maybe. I'm just a small investor without the last name of Kennedy or Bush). My sell point should be sometime early next year: when it hits $120 (so I've doubled my money) and it hits 1/3 of MA (Visa has something like 7 million shares, MA has 2.25 million. With a little extra as a margin because of Visa's dominance, I figure a 3:1 MA to Visa price ratio is about right and V may be overvalued if it goes above that. No hard numbers to back it up really, just my gut feeling).
Visa will be buying back shares in either the 4Q or 1Q of 2009.
see my mastercard blog at matrader.blogspot.com/
plastic story has not stopped and no need to panic for small market movements. if you had got mastercard at 150 when everybody was so skeptical or visa at 60 when everybody hated to touch it, you could have tens of thousands.
see the fundamentals of the company and don't sell it based on day to day stock movement.
the plastic story is just starting in many of the world regions and mastercard (and visa) will only continue to grow.
"The JOKER of the decade".
Don't write articles just because you want to show your photo on the internet. There are many places to slap your damn photo.
Seeking alpha admins must ban these jokers from even accessing their website. Don't ruin your brand "Seeking Alpha"
scroll down all the way to the bottom of the page and listen to one of the podcasts. It was hilarious. I was LMAO. You got to listen to his stock analysis after his poetic blabber.
Bob claims himself as ametuer investor who do podcasts for ametuer investors - at the same time he claims he has 39 year of investing experiencing. He starts with like this.
"while picking a stock he don't care about status economy, industry, blah blah ... .... "and it goes on.
I just hooked my headset while I am doing a least priority thing in my life.
Bob, get a life, you can spend your time in a much better way....
PLEASE get the hell outa here. RUNAWAYYYYY........
V set aside 3 billion dollars at their IPO to handle lawsuits. The fight against Discover is already paid for.
Read the prospectus, people.
everybody knows V is going to $400.00 adn one day will be the highest valued company in the stock market this is the last time I ever read anything from seeking alpha this site didnt even exist in the nasdaq monter rally of the late 1990 s
Go sell something else perhaps your car
Don't listen up to this comment Folks it will just ruin your investment plan in this wonderful company. just stick with it.
It's good company and now near it's fair price value. like Warren Buffet said better to buy wonderful company at fair price instead of fair company with wonderful price.
Visa will keep growing with Olympic games near , that redeemed class B shares by Visa itself late of this year. Every top analyst don't even rate Visa as a sell.
it's not only Visa have litigations cases, see Wall Mart , have a lot litigations cases did analyst recommend it as a sell?
What a loss ! My gosh, the guy must be suicidal ..
Thanks Alpha..If there's anything we need it's some loser trading 70 shares positions, and offering useless advice ..Who cares what this nobody does ?
article should have been titled, Mor-on Visa.
Reposted due to a spelling error.
No one talks about the 800 pound gorilla in the room. Now that we are in a tightening phase. Not as good as my crox and wamu shorts but something stinks on ice. IPO= cashout. Could care less about a dime/qtr dividend. Am I missing something here that we have people going long?
Reminds me of the Blackstone IPO.
Would anybody that writes everyday about stocks and claims to be an expert buy Visa at $86.03 when he could have got it at $44.00 to start and at $55.00 to $59.00 the first day it went on sale to the general public
Robert Freedland you need to get another job!!!!!!
TERRY -- TKTK53
AND ONOTHER THING - WHY DON'T YOU PUT THE CURRENT (LAST) COMMENTS AT THE TOP INSTEAD OF AT THE BOTTOM??????????
TERRY -- TKTK53
LISTEN very closely...Visa and Mastercard DO NOT COLLECT OR LEND one dime of money to card holders!! They issue the LOGO to the BANKS which gives the card a level of security. THE BANKS and American Express and Discover cards are the ONLY ONES who collect MONEY. NO CARD OWNERS OWE ONE DIME TO VISA OR MASTERCARD!!!!! Get it? Visa and mastercard are PAID BY THE MERCHANTS (stores, gas stations, etc.) NOT BY CARDHOLDERS! Everytime a card is "swiped" a FEE is PAID DIRECTLY TO VISA or MASTERCARD. Very simple. NO cardholder pays the visa or mastercard companies ONE DIME EVER!! OMG how many times do I have to explain this..NO GD 800 pound gorilla in the room!! You just don't GET IT. No one cares if people PAY their credit cards, visa gets paid when it is SWIPED, and everytime it is SWIPED, BY THE STORE!!!! Pleaser read this over and over until it sinks in.
You just want to take losses so the government pays you... lol
V is at $81.50. Plz email me for advise in the future. No charge.
jackooo
Since then I have been playing puts with the profits, luv big V!
As long as we got folks like this guy, buy high sell low,we are happy campers! ........... You go dude!
you good, ppls just don't get it, do they
peace
PLs tell us what else you hold and is close to your -8%. So I might buy it from you
analyse the fundamentals, buy/hold the stock. you can make money. you should have seen the scron on ma when it was 150. you can hear it again when it is 290, you will hear it again at 400 after oct 2008 qtr.
checkout my blog at matrader.blogspot.com
I do not have a record of any of your trades but I enjoy your commentary. My trading record is available over on Covestor.
My trading rules include the IBD 8% loss. I just follow my rules.
My term "bad news" is simply that I took a loss on a stock. It is an internal portfolio management device that times my own entries into and out of the market. You can read my blog further if you desire.
I have never claimed to be more than an 'amateur investor'. I do my homework, and try to think rationally about investing. You all must do much better and buy and sell stocks frequently without any of my input. Please don't bother reading anything I write if you feel it is not helpful to you.
For those of you who do appreciate honest and straight forward discussions from my perspective I would encourage you to drop by and check out my website for yourself.
Bob
I do not have a record of any of your trades but I enjoy your commentary. My trading record is available over on Covestor.
My trading rules include the IBD 8% loss. I just follow my rules.
My term "bad news" is simply that I took a loss on a stock. It is an internal portfolio management device that times my own entries into and out of the market. You can read my blog further if you desire.
I have never claimed to be more than an 'amateur investor'. I do my homework, and try to think rationally about investing. You all must do much better and buy and sell stocks frequently without any of my input. Please don't bother reading anything I write if you feel it is not helpful to you.
For those of you who do appreciate honest and straight forward discussions from my perspective I would encourage you to drop by and check out my website for yourself.
Bob
I own several thousand shares and bought 200 more when it dipped.
Thanks for selling your shares to me. You can buy them back when it goes back up to 85+...
Thank you for your many comments---some kind and others less than kind.
If you will visit my blog, you will note that I do state that I am an amateur investor. I do not claim to know when stocks will rise in the future or decline. I do not believe that anyone really knows that information.
This is not about the size of one's balls. It is about the ability to manage a portfolio.
I subscribe to the belief that it is imperative for the individual investor to limit losses. I sell my stocks at 8% loss limits regardless of my own belief about their future prospects. For some that may be foolhardy. I believe it represents a disciplined approach to one's holdings.
I try very hard to only select stocks where the possibility of this is limited. I do this by selecting stocks with consistent records of revenue growth, earnings growth, free cash flow growth, solid balance sheets, and reasonable valuation. I also like to see companies with decent charts.
But I do not ever remain married to my investments. I am not on a crusade, I am not a blind follower of any investment.
Investing is a passion for me. But it is a passion built on thought and observation. Selling declining stocks quickly and appreciating stocks slowly and partially is my method of dealing with the chaos of the marketplace.
The rest of you may depend on your balls and your guts. I shall be referring to my brain from time to time.
Regards.
Bob
Come on over to VisaGlobalWinners.blog...
for some information, commentary, and news about Visa and some other market news of interest. Take care everyone and have fun out there. It's not all 'bad news' .. it's about learning how to make the best decisions in these times to keep those arrows green!
Investing in stocks is not about "balls" but about using your intuition and knowledge and research. You seem to go by numbers.....if stock A falls below 8% then automatically sell, there is no brain, knowledge, intuition about that. You claimed that you used your brain...but i believe you use your calculator for your trading decisions. Because a culculator will tell you that you have a 8% loss....but the calculator will not tell you that the stock will rebound and will definetly go back up to $90 if not to $100 b/c of numerous factors such as: 1. 20% growth each year 2. use of credit cards in developing countries 3. trend of switching from cash to plastic 4. Visa will buy Visa europe in several months 5. visa will buy back shares in 2009. I believe these are the information you need to BUY or SELL to make an informed decision not just simply stock is down 8% so sell. Thats a knee jerk reaction....which does not your brain.
So even though you claim you used your brain..... I believe you didnt.
And please give us other reason's why you sold your shares like good information instead of just it went down 8%.
"Investing is a passion for me. But it is a passion built on thought and observation. Selling declining stocks quickly and appreciating stocks slowly and partially is my method of dealing with the chaos of the marketplace"
Visa is NOT a declining stock. IT IS AN APPRECIATING STOCK...look at the past 3-4 months.
I do use my calculator when determining a sale. I do this on the upside and the downside. I am sorry if that doesn't work for the vast majority of you.
I am in agreement that the chart for Visa is in an uptrend. I did not recommend anyone else to sell their shares. I simply sold my own shares because I have chosen to limit my losses to 8%. And yes, I calculate that out.
Probably those that can anticipate price moves better than I shall be far more successful. Kudos to you all.
I shall continue to limit my losses on each of my investments by selling them quickly on declines and selling them slowly and partially as they appreciate.
There are many other fish in the ocean. Congratulations to all of you who have been successful with your Visa stock holdings.
I believe strongly that the individual investor is best served by a disciplined approach to selection of stocks and managing them in a disciplined fashion as well. This strategy is not likely to be very well suited for everyone. It seems to work for me. And I shall continue to follow it and write about stocks as I go.
I am sorry that so many of you do not seem to appreciate what I am doing and are quick to condemn what you do not understand. If I have wasted any of your time here on Seeking Alpha I apologize for that.
But I do not think that I shall be changing my approach which is both how I manage my holdings as well as how I select my investments.
Regards.
Bob
Good lord!
I would suggest changing your approach on writing about your mistakes for the whole world to see.
This is the Wizard of Oz revisited. No heart, No courage, No brain, and No balls.
Dorothy, good luck with your future investments.
MA didn't shoot through the roof, it had pull backs and periods where it stayed at certain levels. This will likely occur with V.
Robert Freeland: while you sold because you got stopped out, perhaps ironically you sold last week - right when weekly sell indicators went off. V will rise again, however we're just entering a normal sell-off cycle
V is in a downtrend for the next few months, for it to break out of that trend it will have to carry on this movement for a few weeks in a row. IMO it's unlikely.
V closed at 84 and change today. Good thing you stuck to your 8% loss formula and sold it. Bob, I'd like to know what your long term, i.e. 1 and 5 year gains/losses are if you let a didactic formula rule your trades. Visa is a volatile stock on a daily basis, and it seems that 8% auto-trading is not a very smart way to handle a stock like V, especially since it's a brand-new stock. Just like "one size fits all", I can't really believe you can be successful with a "one formula trades all" approach, can you?
Today was good news with MA getting shut down on the European Interchange Fees while V doesnt have to just yet. I hope that they can negotiate to keep at least part of the fee around.
You claim that you work for visa and that buying V europe is not going to happen and neither is buying back shares. So you are basically stating that your CEO Saunders is bullshitting all of us....correct me if Im wrong. In the conference call Saunders claimed of
1. Buying of visa shares in august or october (i dont remember exactly)
2. Expects a 20% increase in revenues year on year
3. Visa will buy back shares in 2009, once V europe is bought out.
If you rated Visa as a hold why is it that you sold your shares??????? And what parameters, information did you use to change your analyst to a HOLD rating?????
I hope to god that some of you shorts are correct and visa goes down now...cuz, in a year or so, you'll see its price north of $150.00 and yes 150.00 because of EU's, lock ups, Discover, foreclosure & so on...
Credit card transactions (just remember the way we use our cards here in the US & W.Europe since the 70s), now let's welcome the new generation of rich middle class of India-China- Brazil-Russia & some non-EU members that will use their VISA or MA.
Call me selfish but let's hope that the price goes down, need to add to my core holding...whoever has a doubt go and check...ETN, BLK, AMG, BEN, PRU...if and only if we all bought in these companies 5-10 years ago...same concept.
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For Windows Media Player:
events.streamx.us/US/e...
We don't get to hear from these folks very often, so it's always informative when we do.
I've noticed there are some great commentors on these forums and I would love for you all to write articles of your own, in your own voice, about Visa or anything else that's driving the market these days. Not to sound to 'rah rah', but come over to VisaGlobalWinners.blog.../ and click on the link in the upper right-hand corner to Become a Member. From there you can begin posting your own articles and having people comment on them. I'd love to see you over there!
EXCEPT GUYS LIKE THE PUBLISHER OF THIS ARTICLE.
Visa has a great toll bridge business model but is fully valued here.
I would hold off.
Also, dont fall in love with a company, leave emotion out of your investment decisions. To the guy who keeps spamming you need to get a life. I'm sorry you missed Mastercard. Dont expect a repeat performance.
What's your take on today?
And how do you think all the financial news today (and for a while recently, for that matter) will affect Visa, even though Visa is not a financial?
There just seems to be so many factors coming into play that it gets tough to sort out which ones affect which areas. Just wondering what you all thought..
Part of my strategy is to recognize that actions within my portfolio may well and probably do reflect the overall tone of the market.
Writer after writer above has condemned my idiocy.
I hope for all of you Visa bulls that Visa closes at $150 next month.
But meanwhile, I shall plod along---examining stocks, thinking about stocks, limiting my losses, identifying new ideas, and responding to the actions of the market as they develop within my own portfolio.
Investing is not a religious experience. It involves thinking, calculating, calmly and quietly making trades, conserving your assets, minimizing your losses, and protecting your gains.
I shall continue to try to think. I may be an amateur, but I find the tenor of some of the comments quite disappointing from such a fine website as this.
You paying attention to V stock? I sold at $78.99. V closed today (8/1/08) at $71.73. I must have been an idiot huh?
Sorry.
I hope you all make tons of money. But selling at an 8% loss can prevent that from becoming an 18% loss. But what the hey, just look at the grimace and the strange angle of my face. That will tell you a lot.
It has been another 3 months since my last comment. Instead of the 8/1/08 price of $71.73, Visa is down another $20 to $51.75.
It may be a great price to buy.
Meanwhile, limiting losses isn't really such a bad strategy, is it guys.
Even from an amateur like me who doesn't really know anything anyhow and has wasted all of your two minutes by contributing to Seeking Alpha.
Wishing you all good luck with all of your investments.
I know I need some.
Bob
Although you did a good thing by selling your stock at 78-79. It still doesnt change the fact that the article you wrote was useless. You did not give any forecast, prediction, analysis or usefull insight of downfall of the stock (ie- credit crisis, banks not lending, etc.etc.). So while you did a good thing by selling your shares at a loss at $78, the fact still remains that the article is useless and was a waste of time. Besides the stock had gone up to 83-84 after you sold at 78. So while you can have a smirk on your face, selling at 8% loss means nothing as stock move up and down by 10% every day.
I will not argue with your points. I never have claimed to have brilliant insight into the credit crisis, the role of derivatives and credit default swaps on a stock like Visa, nor anything else.
My own strategy is the simplest of philosophies which involves trying to identify quality stocks within a portfolio---and there was much about Visa that I did indeed like---and then managing my holdings with an emphasis of limiting losses and retaining gains in a very mechanical fashion.
Visa has moved far from a 10% move from day to day. I sold my shares at $78.14 and opened up myself to a massive display of abuse and comments about my idiocy and comments about what a waste my comments were. But they were far from ignorant. The strategy of above all limiting losses is one of the most fundamental of investment strategies beyond all of your insight.
Visa today as I write is trading at $53.79 down $(.83) on the day. This is an over $24 drop from my own sale point. A $24 drop from a $78 level itself represents avoiding a further loss of nearly 31% in my own equity. That is why it is necessary to limit losses and to respond to market influences by trying in some systemic fashion to move from equities into cash.
But I cannot argue that my writing was more than superficial in terms of the overall fundamental outlook for a company like Visa. I apologize to you if that wasted your time. But perhaps there is an investor or two, probably new investors, that learned about limiting losses and keeping an 8% loss from turning into a 40% loss in a matter of weeks.
Thank you for taking the time to comment.
Visa hit $79.00. I'm curious what other stocks you lost with the money you received from selling your Visa shares at a loss?