On Visa and Commodities: An Addendum 49 comments
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Visa (V) has a great model and in the long run will be a great stock. Visa, once the economy rises and we have a sound financial sector, will continue to go up to eventually surpass MasterCard (MA).
But recent events show that Visa, like any other stock, is not bullet proof. Visa is susceptible to the financial sector. It is susceptible to the economy. It is susceptible to a BEAR market. It is susceptible to the rise in oil. Not because I say so. Because Wall Street says so. Despite the fact that Visa had stellar earnings, it did not rise to the expectations of many.
I predict Visa will have a new leg this year. It may even see 90. I see signs that point to an illusionary rise in the financials. Mainly due to one analyst boasting that the financials have hit a bottom (I disagree), the drop in oil prices, and out of favor commodity markets.
I wrote another article on the inelasticity of supply side oil prices. The acceleration to this scenario will be if there is a military confrontation with Iran later this year. The ingredients for such an event happening is becoming more real. I say be ready. I plan to pull out of Visa once it breaks 80 again, (I bought at the IPO price and high 50s).
Now is a great opportunity, in my opinion, to stack up on commodities. Fertilizers, coal, and oil are dirt cheap. The storm is brewing in my opinion. Should the Iran confrontation occur as I predict, commodities will hit the roof. Timing is everything, especially in the commodities market. That is why I did not panic early in July when commodities went down. I feel that this was a temporary correction. The next commodity rise will happen as soon as supply side effects in oil prices go up. This will happen sooner than you think.
Disclosure: Long in MEE, HK, AGU, IPI, V, ARD, JASO
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This article has 49 comments:
Good luck with VISA you might be right to wait and see or as you say to bail out at 80$.
I just want to bring my attention to the fact that DJIA will soon get back to 10000 then immediately 9000.
Next year even 7500-8000 might be considered too high as final destination for the Dow Jones is 3000-3750.
If you think VISA will be unaffected,think again.When markets crash,as everybody knows,the best companies crash first,this how bear markets work.
Regarding war with Iran that is going to happen after elections or in October-November as America needs another Oil/Gas supplies after stealing it already from Iraq,your scenario about commodities is right with one exception,in the last war with Iraq in 1991 and before in with Iran 1973 the prices rised quickly followed by crash.I expect it will be the same again,buy now on rumors Oil/Gas/Gold/Silver etc., then sell after short time after the news and go short.The spike in Oil I don't believe in the event of war will be above 145$ but be careful it may be higher,then go short for longer time,cover your shorts again at 115-100 per barrel.
Good luck.
The longer I am at this the more confused I get about how to do due diligence because I do not know whom to trust for data; so,investing has become a a crap shoot. (I am long because I got stuck and therefore hoping for a return to 140 oil so that I can get my ass out in one piece.)
A few things- I would be careful making the claim that V will surpass MA. MA has a small float and will continue to prosper. People forget that other than the Amex (AXP) settlement MA's numbers were not bad at all. The problem with blowout earnings quarter after quarter people's expectations are unrealistic- which hurt MA.
As far as V- no stock is immune to a bear market especially when misunderstood by over half of the investing community. More than being tarred with the 'financials' brush- V is being hurt by fear of a global econ slowdown- which, in the end- will not impact V's bottom line significantly (as we watched recently). I too believe that V will develop its second wind this year.
As far as the comm/metals/oil space goes- yes- I have been saying all along that LONG TERM- it is crucial to get involved. The post 2010 era will be all about resources. But Frank- without beating the past to death- you were recommending these sectors at the top of the market when I was warning people that they should take profits or avoid making new investments in them. You are also making a mistake right now - as there is still room on the downside and the bleeding has not stopped yet.
For example, many metals stocks are increasing- and will continue to outstrip demand for some time- regardless of how much they have corrected. Natural gas is a another prime example as the recent dramatic increase in drilling efforts will soon be flooding the market with a significant over-supply. Ag stocks- and stocks in general don't trade purely on fundamentals. While the valuations of Potash and Mosaic may look great on paper these plays are out of favor with institutional money right now- and it is not retail online accounts that move mountains. In other words- your thesis is correct, but- once again- your timing is off.
This is the time to do your homework to sift out the absolute best of breed plays- and, in some cases, begin building a position. BUT- there is still room on the downside. Oil could bottom out at 100$ and gas has another buck or two per MCF. Your ag stocks may have another 20% before this is over. Opec will eventually reverse course and cut production, and of course further difficulties with Georgia (the country), a hurricane here or there- and a few other supply issues could create a price spike. But, reality is that domestic and global demand has slowed down quite a bit and the majority of speculative positions have been unwound and are also out of favor with institutional money (the main driver of the market).
So, in closing- we have some time- but you are partly right. Now is the time to do your homework- track your selections and even move slowly into the market. Do not forget you can lock in a price without tying up as much capital by picking up some 2010 Leaps- or start small and work your way into a position over time- now is not the time to go 'all in'.
Some of the great South American Stocks (comm AND banking) are beginning to shape up as buys right now as well. Its funny that you have picked these topics as I have addressed all of them on a few of our blogs:
Visa: www.visawinners.com
South American Comm Plays: www.southamericanstock...
The importance of resources going forward:
www.virtualwallstreet....
Keep it up Frank- you are improving- and your timing is getting better.
Great comedy! I suppose you believe in the Mayan calenar and that the world is coming to an end in 2012?
As far as stolen oil from Iraq what a joke... You must be a believer in "Change"- a bumper sticker voter. Iraq is sitting on close to a 100 billion dollar's of excess cash and we can't even get those barbarians to pay for their own security. People forget that we have done them a favor- and even they are too stupid to recognize that we delivered them from enslavement. I'm so sick of idiots that hate our country. Why don't people like you just leave- go live in a socialist country for a while if you don't like America.
Val in the UK
Let's talk about change- how about a repealed cap gains tax cut to make your investing life even more difficult? Does that sound good to you?
How about a tax increase to penalize you for making money in the first place- does that sound good to you?
Great solutions right now- increase taxation on the small percentage of people that actually fuel job growth- and penalize people for making investments- just what we need!!
You and 'down at 3500' fit well together.
"Most of you following V have also followed MA and seen how V track's many of MA's movements. (AXP and DFS are true credit cards- and have to contend with an enlarged set of difficulties). Most of you have heard over time from a number of pundits including Jim Cramer, and Fast Money- that MA is a 'better' or 'cheaper' play. As you will see in coming months- they will be proven wrong for a number of reasons. While their argument may have been valid- the validation of their viewpoint is based on a number of factors which are changing rapidly."
Anyone that is interested in the full article you can go to:
www.visawinners.com/20...
Vwinner statement on July 1, 2008
"In closing- both companies are great companies to own- and both have proven to be very resilient (and CLOSE to recession-proof). MA will continue to do well but V will do better and better over time. Both companies report at the end of this month- but I truly believe that this earning's report will mark a decoupling of V from MA. Check back one month from today to see if I was right. "
Written by V Winner at 11:49 AM
Tags: Visa Verses MasterCard
Vwinner statement after V Q2 earnings:
"1. MA results really shook V holders up- as MA has been touted all along as having the 'better valuation' and being 'cheaper'. If you go back and read my post "V decouples from MA"- you will see that I discussed the Amex settlement. I was actually in shock that analysts didn't account for that- but this shows us why we must do our homework. Minus the settlement charge- MA's numbers would have been respectable- and I am also surprised that more investors don't see that as well."
Just gets to show you that we all make mistakes> That means everyone!!
Second statment- I also stand by that as well. Where the inaccuracy Frank?
No mistakes in either statement.
Jump into commodities right Frank- good luck buddy- does 'global slowdown' mean anything to you?
The U.S. dollar is trading near a 6-month high against the euro, and it is helping the market sentiment. At the same time, we feel that the low price for oil and gold, caused mostly by the stronger dollar, while helping the markets, is becoming irrational. Selling oil and oil stocks does not help address the supply/demand misbalance issues that caused oil prices go up in the first place. Today, the International Energy Agency raised the forecast for energy demand for the next year as it expects Chinese oil consumption to go up after the Olympics. The forecast was increased by 70,000 barrels, to a total of 87.8 million barrels a day.
This just does not add up with OPEC saying that it is considering cutting oil production at its September meeting on the basis of oversupply. What is clear is that OPEC is much more interested in high oil prices than low oil prices; in the long run, oil fundamentals remain the same.
Think The Oil Boom Is Over? If So, You Could Be Giving Up The Biggest Gains Of Your Investment Career!
Right now, Americans are celebrating lower oil prices and foolishly selling off oil stocks.
Why do I say foolishly? Because, as oil executives have said in recent months, $100 is the minimum oil price required to bring new oil supplies online. Any dip below those levels would be self-correcting -- it would mean no new oil to meet growing demand. It would also postpone the development of alternative energies. The result would be that prices catapult considerably higher, very quickly.
In other words, the recent drop in oil prices isn't the end of the commodities boom. More likely it's the last great buying opportunity.
Vwinner I have to say that you are back to your old tricks of posting under allias's and responding in the 3rd person. You did that extensively through the original vwinners blog. Your main reason to come here is to have attention brought to yourself so that you may get new followers to your stagnet blog.
I do not want to drag you through the mud like you do to so many others, I'm just stating facts from your many many posts.
I do report you as an abuser every time you personaly attack someone like you have done here. I have to assume that the editor of SA allows this to continue as maybe they think it will bring people back to see the childish arguments you display on your latest conquest.
Unfortunately I took a gander at this article. I try to avoid anything Visa or MA on SA as I know you will be their posting that you are 90 % right and everyone else is a mental freak for opposing you.
Frank, IMO you have sunk to vwinners level also. You are always looking for a fight with him. You do not need to repost his old postings to show how often he is wrong. We can read for ourselves.
Those that have been around him for more than a month know that he has to be the " almighty" ( the one in control ).
I think you both should create a blog where you 2 can argue into eternity.
Again IMHO you should both be banned from SA.
In His Mercy
Enough is enough. Can't we get some thoughtful insight on these threads w/o all of you bashing each other. I'm tired of reading this drivel just to get to some useful data spotted throughout, to help in my investing. I don't need to read this and I don't have the time for this crap!! I come here only for what I had hoped was thoughtful insight and useful investing tips not all your bs!!
Can't we keep the posts here to just the topic at hand? You all sound just like each other and even your alias' sound just like each other. You all constantly have to try and bait each other and each and every time you all rise to the occassion, take the bait and continue. And on and on it goes. What good can come from this? Do you think that by responding to the other person's comments you're actually going to make a difference? Do you think they're actually going to change their opinion? What does it matter anyway? Just stick to the topic and ignore the comments, the rest of us already see it for what it all is, just plain GARBAGE!!!!
Having to read your constant useless crap comments shows us again how childish you all are and how little hope there is for humanity!!!
Let's get back to the subject at hand and keep it that way. PLEASE!!!!!
of 8/15/08. Look for an announced increase first quarter 09.
V WINNER AKA USER 172125 please join us in his ouster. P.S. Please spend the time to check his past posts. Let's get back to basics.
V $5,545 MA $4,584 DFS $5,180
For the record- I checked Mr. Bill's past posts- and I see very little in the way of actual posts. He too seems to be obsessed with the messenger instead of the message.
As a serious investor and someone who has a substantial investment in Visa-I appreciate having a blog devoted to one of my largest holdings.
I think people can judge what V Winner did by going to his blog. They can also see what he has had to say over time.
www.visawinners.com
(Oh-and before I start getting attacked- I am only providing this link so that if people want to begin comparing the contributions of the author to this article or Mr. Bill's brilliant insight)- they can make up their own mind. Enough said.
I, for one, would like to actually go to a visa post- and discuss Visa- instead of this child-like dribble that will not make me any money.
I was very happy to see that institutional ownership increased to beyond 50% (something I learned from the much-maligned V Winner blog!)- So could we get back to the Visa discussion people!!!Please?
The US may be finally somewhat cutting back on oil usage but the rest of the world isn't standing still. If Opec cuts back on production in September like they have hinted to....then you will see oil back in the 140's in short order.
contact-editorial@seek...
UK poster.
On Aug 20 10:44 AM User 246127 wrote:
> Mr. Bill- I have read many of posts from virtually anyone and everyone
> posting on Visa since the IPO- I have learned a lot from V Winner-
> I have learned nothing from you. Why, for example- are you in particular
> so upset at V Winner- when the author of the article is the one out
> of line? You seem to have your own insecurity about him- and it is
> out of line- as the author of the article here is obviously the one
> out of line.
>
> I, for one, would like to actually go to a visa post- and discuss
> Visa- instead of this child-like dribble that will not make me any
> money.
>
> I was very happy to see that institutional ownership increased to
> beyond 50% (something I learned from the much-maligned V Winner blog!)-
> So could we get back to the Visa discussion people!!!Please?
I hope Mr. Bill that you are successful in getting this clown off Alpha. You are dojg a great service. Thank you!!!!!
Knightowl- come on - grow up. You sound like a child as well.
Are you both grown men or teenagers.
You are all being hypocritical as you continue to attack someone who has obviously put out much more (both in quantity and credibility) information about Visa.
I was curious to see what the three individuals have actually contributed to this site so I took a look at all three of your own histories on Seeking Alpha and found very little redeeming value in any of your own contributions. As they say - men in glass houses should not throw bricks. From what else I was able to gather none of you even have experience in the financial services or investment business.
Please- do us all a favor and grow up. As I have better things to do with me time I will reserve any and all comments I have in the future to Visa.
One last thing knightowl- you have taken a Visa forum and turned it into an oil forum. Are there not better places to post your comments about energy?
Last- and getting back to substance- I must say (if we can focus on the article itself) that I don't find much of value there as well.
Let us all try to move forward and keep the focus on Visa. That is why I came here- not to hear what I assume (perhaps incorrectly) grown men whining about 'V Winner'- do you all get together for manicures together as well???
I feel honored that so many people have taken an interest in me- the one and only V Winner! I would like to first thank my mother and father, my wife, friends, and associates. You have all helped me to reach such prominence on seeking alpha. Bravo! Oh- and before I forget - let me thank user 246127, 189906, and 172125 for your kind words and support.
Ok- first- this has to be the funniest series of posts I have ever read on any finacial site or blog. I have had a chance to read all of these wonderful and nasty comments people have made about me- and really don't have anything to say about my detractors. I would comment as a general rule that your time would be better spent doing research and making investments than worrying about me (just an opinion).
I would also like to say that I find it quite comical that people are complaining about me insulting people while simultaneously hurling personal attacks (seems sort of hypocritical).
If anyone wants to know what I think about Visa (sort of the pupose of the Visa forum!)- I have a blog devoted to Visa:
www.visawinners.com
All of my opinions are on my blog (and I can assure you that I have been misquoted several times in the preceeding posts).
We also have a few other blogs (linked to Visa Winners)- and my e-mail is on the site should any of you wish to hear directly from me. I love Visa- and feel it is a wonderful company.
As far as some of the negative people - there are always going to be negative people consumed with envy, anger, frustration and despair. I feel pity for them and hope they are able to find success and happiness in their lives so that they may contribute something productive to society in general- and to investors in particular. This is the only thing I have ever tried to do with my blogs and sites and newsletters- and posts- and brokerage; help people to help them selves.
I feel no animosity for those poor unfortunate souls (even those that falsify my identity- or produce fictitious e-mails or posts). As I've said- it is very simple to verify what I think or have thought just visit any of my blogs and its all there.
Good luck to all of you invested in Visa- it is a wonderful company with a great future. Good luck to all on Seeking Alpha- friend of foe.
Jon
PS- THIS is the only post that represents my true feeling- you can dismiss any previous posts as someone else's as they are not mine!
Also, as I don't have the endless time or energy (as some of these people seem to) this will be my ONE and ONLY response to this nonsense. As other gentleman so eloquently put it- GROW UP GUYS!
directly from the Visa Corporate Website:
www.corporate.visa.com...
Statement by Visa Inc. Regarding Summary Judgment Rulings in Discover Litigation
SAN FRANCISCO, August 22, 2008 --
"Visa is pleased that the court resolved several disputes in this case at this stage. Among other things, the court:
Dismissed Discover's claims of debit monopolization against Visa; and
Rejected Discover's allegations of an inter-association antitrust conspiracy between Visa and MasterCard.
"As a consequence of these summary judgment rulings, Discover cannot challenge the legality of the agreements Visa has signed with its debit issuance partners. As such, it is unlikely the Discover litigation will have a significant impact on Visa's ongoing business operations.
"In addition, the court granted collateral estoppel on a limited number of issues that were determined in an earlier, related lawsuit. This ruling, however, does not establish all the elements of Discover's claims. Discover must still prove the remaining elements of its case and any damages at the upcoming jury trial.
"Visa believes it will be clear to a jury that it is Discover's own business model and decisions - not the actions of competitors - that have limited its options in the marketplace. Discover has been free to engage in bank issuing partnerships since 2004, but has yet to demonstrate that it can do so in a meaningful way.
"Although we expect Discover will be unable to prove the level of damages that it seeks in this case, Visa remains committed to resolving legal challenges in a manner that allows us to remain focused on our business activities. To that end, as part of the Visa Inc. restructuring process, the company developed a retrospective responsibility plan that addresses potential liability in certain U.S. litigation ("covered litigation"), including the Discover case. Additional information regarding the company's retrospective responsibility plan is available in the company's Final Prospectus, dated March 18, 2008, at sec.gov."
Nice way to end the weekend, thanks Anthony-