Mong

Four Key Points from Visa's FQ109 Conference Call

Hello SocalSurf

a. regards issue of $3 transactions.

MacDonald's (ticker : MCD) turnover consists of a lot of such transactions, between $1.50 and $6, (or possibly more).

If MasterCard had say 10% of such transactions, that would do very well.

b. Marketing costs for small transactions.

Its probably not necessary for a huge marketing budget. Being able to settle little bills would be immediately obvious when you get into the joint.

c. The international market (vs supposedly mature markets)

Not withstanding the maturity of developed markets and the scope in such markets for small transactions, the international market offers potential too.

Small transactions like bus fares, soda drinks, automated coffee vends, are all good things.

(a), (b) and (c) are a compelling business idea, but as you correctly point out, the valuations are a perpetual problem, esp in this market.

Four Key Points from Visa's FQ109 Conference Call

There are two competing trends here, user352167 :

a. the much vaunted "secular trend to plastic".

I personally believe this has some merit to it. Particularly, with regard *small payments*. Ie, no more fiddly change, hence much quicker thru-put at the tills, and less stressed-out cashiers. This is one area Mastercard (and/or Visa) should pay attention to.


A very good area to move into.


b. Against the above mentioned trend is the recession, which points to lowered (or indeed, more accurately thus far, FLAT) spending. This is shown up in MC's/ V's figures.

This is a difficult case, as two conflicting trends present themselves.

Speaking personally, I think trend (a) has a good chance of winning out, and this would be manifested in stock price movements from *time to time*.

This stock is not immune to the current depression at all.


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Why Auto Stocks Are an Easy Short

I think its always important to follow up a story, regardless of its interest level. The last I heard about Ford, apparently 50% (yes 50%) of stock holders tendered their shares to Mr Kerkorian. Yes, thats 50%. I guess most stock holders think Ford is a sell then.

Why Auto Stocks Are an Easy Short

Now, I'm directing my comments at those I think are referring to my earlier post (above), and anyone who cares to read on.

There is no doubt exports are up. And I even think cars (not just USA ones; ie including German ones) are doing well in China.

However, now that the dust has settled with the flurry of comments (esp the one about Andy being 19!), please see :

www.bloomberg.com/apps...

This Week Is Likely To Bring Out the Bears

Andy, is there any way to get your charts LARGER? Larger charts are de rigeur if one is to take your charts seriously. All too many people just dump a small chart into their commentary ... and such charts are not helpful.

This Week Is Likely To Bring Out the Bears

I think he probably did it himself. A better tech analyst than a car (auto) analyst probably. lol

Why Auto Stocks Are an Easy Short

Perhaps Andy could be right, but for the wrong reasons.

The "right" reasons are :

a. Some people just won't buy an "american" car even if its as good as non-american ones.

b. Those who could buy "american" can't buy one because of the credit squeeze.

How's that?

lol.

How Far Will House Prices Fall? Implications From the Latest WSJ Survey

I have a question and some comment/questions :

1. The question : Given all reader's comments, in particular Alec's, are median home prices some function of 5 times of 1/3rd disposable monthly income currently?

2. The comment (with some questions too). This pertains to the equation. (It is only noted the Menzie's equation "predicts" how Case Shiller will move in relation to OFHEO data. The equation does not itself predict how house prices will move. Alec, please note : You and Menzie are not talking about exactly the same thing, hence your's and Menzie's methodologies are not substitutes for each other, even tho both methods apparently end up upon the same figure of around 40-50% )

(a) perhaps you could remove the negative intercept, which is although statistically significant @10% level, has a strange interpretation, namely that changes in case shiller are negative for 0 changes in OFHEO data.

A side effect of this is to bring up the estimates for Case Shiller.

b. With reference to the histograms, are expectations too *positive*? How accurate have these expectations proven to be?


c. Have the equation coefficients proven robust? What is the range of coefficients on a say 5 year (20 Q-s) rolling basis?

Markets Bounce Back From Bear Stearns Panic; Is the Worst Over?

Given all this volatility, surely you would never want to be out of the woods?

Spend Your Dollars Quickly before They Print More

Right. What do you propose to spend money on? Would a house do?

Brace Yourself For the Payrolls Number

Put simply, there is and is going to be a lot of bumping and grinding here.

What Kathy Lien said was right : the economy is still sliding down the pan.

What others have said is also right : the markets will do what they want to do. Rationalise this away as (a) expectations built in (b) people who think the market is cheap (c) short covering (d) momentum play (ie momentum gambling) -- which is fair enough -- after all, this is a market.

Complicating things are all these "efforts" to right the markets.

I think the market will continue to be a momentum play. Jump in one second after the data is released, and not before. Come out quickly too please.

U.S. Export Trends: Looks Good, Feels Bad

You are getting lost in your arguments.

(a) What is so involuntary about imports and exports? You are getting lost.

(b) if no further accumulationof $s take place, this means no further imports into the USA will take place. Again, you are getting lost.

(c) The issue of "real terms of trade" is an issue, but not a major issue when discussing appetite for ex USA ROW accumulation of $ assets. Again, you are getting lost.

(d) your accounting regards benefits and disbenefits from trade (imports and exports) is still incomplete. you may be talking about some "psychological" feel, but incomplete it still is. you speak as tho trade transactions are onesided transactions. So your arguments are still incomplete.

(e) I somehow thot you would bring up cars. My only point is : cars are not HOMOGENOUS products. Your argument is still lacking. I have no idea where you get the figure "10x" from. ~Hence, again more questionable data.

(e) the USA is not consuming more than its producing. The balancing item is debt into the future, and disbursement of past accumulated assets. Again, questionable economics.

(f) the government deficit identity is not relevant to what you have to say. Its something weighing on your mind perhaps, but its not relevant to what you have to say.


Look, you made a good try, but your points are incoherent, incomplete, premised on inadequate economic and accounting grounds and hence compromised.

U.S. Export Trends: Looks Good, Feels Bad

One last point for now .... (more of your "crap" economics and/or accounting highlighted). As regards :


"If that number is zero (meaning they don't want to add to their multiple trillions of USD financial assets they already have), US net exports will go to zero"

Actually, what would happen in this case is USA net exports would be far far from 0. Your economics is so appalling bad, I really have to circulate this to everyone who might come into contact with you.

You need tohave more sleep before posting.

U.S. Export Trends: Looks Good, Feels Bad

One might also add, your following statement is either strange or incomplete economics, strange or incomplete accounting, or some admixture of the two.

"Keep in mind: exports are real costs; imports real benefits)"

Exports are of course "real costs", but (what do you get in return?)

Imports are "real benefits", but (what do you lose for this?)

The economics and/or accounting premise upon which your article rests is very bad.

Its akin to say ... savings makes you feel worse off.

Actually, its intertemporal substitution of consumption!

U.S. Export Trends: Looks Good, Feels Bad

Your article deploys what at first sight is a rather strange variety of economics.

What supports your assertion about 4%?

"If that number is zero (meaning they don't want to add to their multiple trillions of USD financial assets they already have), US net exports will go to zero.

And we will feel worse by another 4% of GDP, all else equal."