Mastercard Incorporated (MA)

All Comments on MA

  • commenter
    ugh
    Aug 01 10:00 AM
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    @ mojo:

    1. The fact that Citi is a large card issuer is a far cry from saying that cards are its core business. Listen to one conference call, and you'll know what I mean. The amount of time that management, and the analysts, spend discussing cards is dwarfed by the focus on the banking operation. Back to my point: The author would do better to compare pure-plays (MBNA (pre BAC), Cap One, Advanta, DFS even), than Citi. Whether or not C is a large US player (forget about the rest of the world), the type of comparison he's making calls for like to like. What % of C employees do you think are actively focused on the card business? 5% maybe?

    2. You're mistaken again. This is simple logic, man. Look at the charts and think: If you have a young, low income, thin credit file type of card applicant, do you grant him/her a large line? Of course not. And what if you have a high FICO, 6 figure applicant -- doesn't he/she merit a higher line? Sure thing! That, very generally speaking, is why Discover has lower lines. Seriously, Discover could (and should!) be very tight with lines if it's granting credit to low income/thin credit file consumers. In a sense, I'm almost agreeing with you and the author, actually. For any given cardmember, the limit should be "right," however you define that to be. But best underwriter? What does that even mean? If you give miniscule lines, no one defaults, or the default loss is minimized. But being "hardest to get" does not make DFS the best underwriter.

    By the way, you make me laugh. It seems like you're implying that's there's something desirable about the hard-to-get Discover card. So ... the ultra-rich are tossing their Amex Black cards for Discover cash back? LOL. Even among us normal folk, who wants to pull out a Discover card at a nice restaurant? Might as well pay with food stamps.     Reply
  • commenter
    mdmrjsds
    Aug 01 09:56 AM
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    Actually, where Amex went wrong was in broadening their card holders. At one point they were exclusive to wealthy clients. About 5 years ago they decided to issue to lower income individuals.

    In a sense, this made sense, as they had basically all of the rich market, so expansion necessitated that they broaden to grow. And while the economy boomed from the housing bubble, it looked like a brilliant move. In the current economy, they are paying the price for their decision. By the way, I'm not saying that this negates your point about raising limits. They weren't alone in this, as all card issuers were raising limits during the housing boom.

    This was purely a Chenault decision, so while he took the kudos for brilliance during the boom years, he has to take the brickbats now. Like all CEOs, his performance is dependent on general economic trends. They, and analysts, tend to forget that 85% of a CEOs performance is due to general economic trends. How could they demand exorbitant compensation if they remembered? ;-)     Reply
  • commenter
    The hand
    Aug 01 09:23 AM
    My Website
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    hey, i have lived outside of the usa for the last 25 years, and amex's acceptance has been rising. they have lots of deals now with the local banks, Reply
  • commenter
    RiverCat
    Aug 01 09:09 AM
    Five Great Quality Companies: Are They Too Expensive? [view article]
    Larry B.

    Thanks for the article......interesti...

    RiverCat     Reply
  • commenter
    Loxomo
    Aug 01 08:50 AM
    My Website
    Positive on Pop - Cramer's Lightning Round (7/31/08) [view article]
    Embraer IS on fire as all of the world's airlines will be looking for short route planes highly efficient is fuel costs from 35-110 passengers and ERJ is the leader of the pacl in S AMerica. BUY the stock, ignore Cramer's tie-in w/Boeing-they don't rely on each other for movement up/down at all...ERJ will ascend greatly over the next 2 years and started to ascend over the past few months already-check the chart you'll see-LOX Reply
  • commenter
    tilut
    Aug 01 08:49 AM
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    I noticed from yesterday comments as well as the first one today that many commenters are aggressively attacking DFS. I do not know why.Is it because your darling stocks ( V and MA) stopped sky-rocketing and may even start nosediving in the future? Whether you like it or not DFS is no longer a small player and will grow much more rapidly than other players in the industry because DFS has a very good management knowing where they go.It is absolutly false that DFS is targeting low FICO , they simply manage their risk in a more conservative way.Do not forget that estimated revenues this year for DFS are around 4B$,for MA 5B$ and for V 6B$.Last quarter DFS earned .48 per share while V earned .58. Not so bad for a company that its cc is not accepted anywhere and has only poor clients.Anyway , keep buying your darlings and I will keep buying DFS. Reply
  • commenter
    Frank Rong
    Aug 01 08:45 AM
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    1. Citi's card issuing business is a tiny part of its whole operation? It's a huge part, it's the only part that's making money for Citi. Citi is the third or fourth largest issuer in US. its card division brought in more than $3 billion in net income in 2007.

    2. Discover's credit limits are low because they are targeting the low FICO, high risk sorts of people? Discover has been the best underwriter in the last few years. Discover Card is the hardest one to get.

    3. Amex is a still great business, it's a business even an idiot can run it.
    Reply
  • commenter
    WW traveler
    Aug 01 08:06 AM
    My Website
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    For those of us who travel frequently outside the US, the Amex problems have been very obvious for a while. While Visa and Mastercard are widely accepted in Europe and Asia, Amex is not. The reason: they cahrge too much and are not flexible with merchants. Their other very profitable business, the Traveler's Checks (i.e. please keep my money and charge me for it!) is now defunct as well. With the widepread of ATM machines, and debit card holder can get a very good rate and get money only when they want it. Unless Amex changes its policies, it is bound to lose marketshare and profits even more. Reply
  • commenter
    ugh
    Aug 01 07:55 AM
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    SeekingAlpha sucks again. How do these things get on Yahoo Finance?

    1. Without checking your numbers, I'll grant that the MBNA > McDonald's comment is okay, as MBNA was a pure-play issuer. But comparing Citi to Wal-Mart and Microsoft is dumb. Citi's card issuing business is a tiny part of its whole operation.

    2. It's Jamie Dimon, not Dimond. What's next? Warren Buffet?

    3. You're missing some important decimal points in your charge-off table.

    4. Your big point, that AXP has handed out larger credit limits to its card holders is conjecture not based on fact. It's possible, given the scenario, but you've provided no proof.

    5. Discover's credit limits are low because they are targeting the low FICO, high risk sorts of people.

    6. How can anyone trust advice from someone who is long DFS? LOL     Reply
  • commenter
    Panda63
    Jul 31 11:25 PM
    Card Issuers: Facts and Fictions [view article]
    Hey jcole--you couldn't be more wrong about Discover being the most widely used cc in China??!! I've news for you--VISA is the ONLY card worth carrying when traveling to the PRC! I know I've been there recently and traveled thousands of miles thru China. And even at that, it was advisable to only use a cc at a hotel establishment because of cc fraud.

    If you ever go to China, leave your Discover card or whatever-card at home and bring a VISA card only!     Reply
  • commenter
    Larry
    Bellehumeur
    Jul 31 09:02 PM
    Five Great Quality Companies: Are They Too Expensive? [view article]
    BS-D.....When one writes an article with an opinion (my work is more opinion than factual, as no one really knows where these stocks will go), you have to expect that you will have some objectors. Everyone is entitled to their opinion, and I welcome the idea of hearing what people think. We all read numbers and evaluations differently.

    One important part to remember is that most people on SA don't do this for money.....I've never seen a cent for anything. We do it to share ideas with like-minded people, and hopefully, cause some discussion.

    In terms of some of my word choice, I used "ain't" as a way as a form of emphasis (I have a Masters, I know it isn't a grammatically correct choice).

    In terms of this article, perhaps I should have expected that some people would not grasp the concept of it. My comments spoke about the attributes of Apple, and its dominant market share. Amazing how calling it expensive set off a great uproar.....the stock corrected around 35% at one point this year, so someone else must have thought it got out of control as well.

    I'm going to continue to post articles, and I welcome all comments...good or bad!

    Cheers and thanks for reading!
    Larry     Reply
  • commenter
    TraderMark
    Jul 31 05:42 PM
    My Website
    Does Visa's Beat Bode Well for MasterCard? [view article]
    Thanks Adesai

    I am fine with the drop - hoping for $220s and if the market continues to erode might get $200 or better. Still 2 franchies in near monopoly and the global growth story is in inning 1. Many on the globe have never seen a credit card.

    Thanks for your points, I understand where you are coming from but I am not sure if that list deserves a 20% type fo premium. But the market says so, and the market is right in the near term :)
     Reply
  • commenter
    Adesai
    Jul 31 02:29 PM
    Does Visa's Beat Bode Well for MasterCard? [view article]
    Trader Mark,

    hey whats up???? I remember your articles on IPI.

    Anyways, there are a number of reasons why V is trading at a higher PE ratio than MA.

    1. Size, size, size- due to global market share: V-60-66% while MA 25-30%. This makes a huge difference when competing for banks in emerging countries such as china and india.
    2. Veurope- Veurope has not joined V inc., and Veurope represents about 15-20% of market share. Veurope shares will be bought by Vinc in the near future. Currently your seeing Visa without Veurope's earnings
    3. Huge banks/ institutional investment. If you look at banks in china, india, brazil, middle-east they have invested alot of money in V shares, which means they will likely be caring there card.

    4. Legal suits. While you just saw what happened to MA shares today b/c of Amex suit, Visa has already settled before they went IPO. Additionally V has set aside 3 billion of IPO money for Discover cards pending law suit while MA has not..... MA will likely see the same tumble is shares prices/net quarterly loss when they settle with discover.

    5. Planned by-back of shares. V will likely buy back shares in 1st quarter of 2009, which will effectively lower outstanding shares, increase EPS and effectively decrease PE ratio.


    These are the reasons i am aware of.

    I guess you got what you wanted....you wanted MA to miss to drop in share prices. Well here you are, but be careful what you wish for.     Reply
  • commenter
    Payments
    Guru
    Jul 31 11:38 AM
    Card Issuers: Facts and Fictions [view article]
    Your analysis isn't bad but you have a fatal assumption regarding rebates. V/MC lifeblood revenue comes from assessments. If you would present the data in your posting, you could show this has grown in direct relation to scale. Reply
  • commenter
    Ryoga
    Jul 31 11:20 AM
    Does Visa's Beat Bode Well for MasterCard? [view article]
    to my understanding V doesn't contain the EU segment (still owned by banks in the EU), yet the CEO quotes intl numbers?

    the difference between these two stocks is V is bigger, but MA has more global exposure.

    help me out here, is V's CEO talking about US customers using cards overseas?     Reply

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