User 183867

Why Visa Got Spanked

The only reason Visa has come down is due to a change in expectations. All the other stuff you're taking about above is total nonsense. Expectations have diminished somewhat because emerging markets are growing more slowly, which diminishes the NPV of the company since that's biggest driver of future value creation. This diminishes the stock price -- it's very simple.

Anyone with half a brain can figure out this is a wonderful business, but the stock market's not dumb, either, and it has priced in some very high expectations. There are enough people who actually have half a brain that believe everyone else possesses a quarter brain that this has been bid up to full value. Only if you believe there is no risk in this business (only the jackasses focus on the credit risk straw-man argument; there is plenty of regularly risk and customer concentration risk) would you believe 35 to 40 times earnings allows for excess returns in the future.