Adesai

Visa: Why I Sold All of My Shares

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.

Does Visa's Beat Bode Well for MasterCard?

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.

Credit Card Breakdown: AmEx Disappoints, as Predicted

Mojo is an idiot, its clear he loss some $$$ in Amex and DFS.

Have you seen MA chart for the last 2-3 years. Its on a steep incline.... WHY???? MA and V is targeting developing countries. In china 1 in 30 owns a cc; in india its about 1 in 60. These are huge potential markets. Global trend from cash to credit is occuring at a exponential rate. With the summer olympics along with huge chinese/ indian/ middle eastern banks investment in V, look for about 10-15% increase in credit card transaction year on year, which is what CEO saunders has predicted. Suntrust has a price target of $100 which is what V willl likely be trading at within several months.

Amx and DFS will likely be bankrupt or be in the red within several years.

Why American Express Should Be Ignored

I enjoyed this article and you made a great point Fxtrader. However with Visa being traded at 72 currently this stock has taken a beating. Suntrust has projected price target of 100, and there is no reason to believe Visa cant hit that with the upcomming olympics, growth potential in asia, buying visa europes, and buy back of shares. Visa is expecting 20% growth year after year.

Remember that before the first quarter earnings Visa was at prices of 73-75, after the earnings release the stock jumped to 80+. With second quarter earnings comming up look for the same trend. Visa and MA are being traded at high PE ratio compared to other credit cards, which is justified b/c of the limited or no exposure to consumer debt. While AXP and Discover will likely fall victim, as have banks recently, to the badd economy. The price of V has taken a beating because of lower expectations from the financial crisis, however once earnings release watch this baby sky rocket.

My Investment Philosophy and Visa

I have bought several thousand shares of visa on the first day it came out on the market around $56-59 collectively. I then bought another 500 shares 3 days later when the price went to $67 (premium at that time). The price dipped back down to $59-63 for the rest of the month. That was greater than a 10% loss, although at that time i felt badd that i had bought visa at a high premium, i felt confident that the prospects of this stock were strong. 3 months later i gained over 20%, if i followed your your theory then i would have likely taken a loss and kicked my self today. The same is true of IPI (intrepid potash) i bought it at $45 i bought another thousand shares at $51 which was 2 days after IPO. The stock fell to $43, but i held my position.....why???? Because of strong fundamentals of the company and growth prospects. The stock is well above $65...hit a high of 75. There were analyst that had a SELL rating with price target of $40 for IPI. There were analyst that had a sell rating for mastercard 2 months after its IPO....

The lesson: If you believe in a company and have done your research and homework you should trust your judgement and intuition. Dont follow an analyst or a calculator. The price of Visa will likely be $100 by end of the year. You will be kicking yourself for selling when the stock hits that price. In fact Visa will go to $150 in 2 years, with all the prospects and growth opportunity.

So while you will continue to use your calculator for your investment i will use my head and knowledge for investments, as should successful investors.

Dont get me wrong i leave my emotions on the side, i will dump a company quickly if i feel that the prospectives are not strong. But i dont simply dump a company b/c of temporary 8% loss. With the current market and volatility stocks may move up/down by 10%.

Reason why you are getting bashed on SA is b/c of your reasoning for selling a stock. YOu provided NO GOOD INSIGHT such as prospectives, growth, analysis, earnings, concerns of Visa...whether they be good or badd, to justify your decision........only 8% loss.

And readers on SA wants to hear "reasonings" so they get good insight in making investment. If i wrote a article and simply claimed i sold my stocks b/c of 8% loss without useful insight..... i would expect readers who took time to read my article to be pissed.

Nobody wants to read a useless article.

My Investment Philosophy and Visa

I have visited your website and i was the one who claimed that you used your calculator and not your head. And i will likely stay true with that comment. One question i had for you Robert, if you claim VIsa as a "hold" then why didnt you follow your own advise. You sold your shares.

With your experience, i dont believe your an amateur. I do believe that selling your visa share was an amatuer move. Something that i wouldnt expect from an investor with your experience. You have to look at the prospects and growth potential and not just simply 8% loss.

You didnt even give valid analysis on why you sold your shares. Simply 8% loss.

Visa: Why I Sold All of My Shares

Robert Freedland,

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?????

Visa: Why I Sold All of My Shares

Improviz,

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.

Visa: Why I Sold All of My Shares

And by the way Robert Freedland, you claimed:

"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.

Visa: Why I Sold All of My Shares

Robert Freedland,

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%.

Visa: Why I Sold All of My Shares

As one blogger claimed.....you must have big balls to write this article when you know you were going to get slammed.

Visa: Why I Sold All of My Shares

I bought the shares you sold 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+...

Visa, 3 Months Later: Where That IPO Money Went

Oh my god...........so all the talk about litigations for the past 3-4 months were true!!!!!!! What are we going to do now????????? We should all SELL visa and BUY discover.......hahahha... This is the most uninformative, uneducated article.

Visa: Trading Transparency

Frankmeister,

I like your post about stocks falling and nobody giving you refund. Well said. I too have been on the bandwagon on Visa. The stock is highly overvalued.....the PE ratio dont lie. I am just waiting for for V europe to join the mix and for V inc to buy back some shares once these 2 things occur the price should shoot up to around $100 and then i may consider selling....b/c by then i would have made over 80-90% of return on my large investment.......you wont ever see that type of return in visa after that.

The 10-20% growth Visa has claimed for the next 5-10 years is already factored into the stock (hence the high PE ratio). But i dont think the situation of Veurope joining Vinc and buying back of shares are factored into the current PE....if it was then the PE ratio would be almost 10-15 pts higher than MA. Currently its only 3-4 pts higher than MA. Apparently in october they will annouce the buy back of shares and V europe to join V inc.

Visa Estimates Upped Through 2010

I really enjoy your post greencap. You seem to give a balanced view of this company.

And your right...numbers dont lie. V has a high current and forward PE ratio compared to MA. However, I have invested in Visa b/c of the growth potential, worldwide name recognition, the guidance of future growth of this company, guidance of buying Veurope in several months, along with the growth potential in china. Additionally this is a comapny i can relate to b/c i use visa credit cards more than i use cash. Just to keep records of all my purshases without holding on to reciepts. More banks and institution from asia (china, india), middle east, etc..etc.. have invested in this company compared to MA... which tells me that this will be the premier card which will be advertised when people go to banks to get debit/credit card in these developing countries. Although in the short term MA may look good b/c of its PE ratio and EPS....in the long run (3+ years) visa is the much better company. And I am in it for the long run...

In fact even in the short run i have made about 30-40% return on this investment in today's bleak economy...which is something i dont think anybody will complain about.