ozcutty2

Visa: Not Everywhere I Want to Be

Still like dfs, but it won't take off until the economy improves and charge offs come down.

Credit Card Issuers and Processors - How They're Faring in the Crisis

I've seen a lot of articles like this. Visa and Mastercard are wonderful, the rest are crap.....
Thats why Visa trades at 20xp/e and dfs trades at 3xp/e.
The question is not which is the better company but which is the better investment.
Considering dfs network volume has doubled since 2004, i'd say 3xearnings makes this a better investment

Trio of Death in Consumer Credit Cards Marches On

Trio of death? slight exaggeration. Things are certainly bad however considering AXP and DFS are still reporting profits and have large litigation payouts to boost income over the next 12 months i think that call might be a bit premature. Not to mention TARP funds they have just recieved.
I would also like to point out that AXP and DFS make lots in fees and dfs owns diners club and the largest non-bank atm network in the US which is a cash cow. Then you would have to say Buffett would have an interest in backstopping axp in a worse case scenario.
However you are right that things will get worse and they will start posting loses soon, how much of that is factored in already has to be considered.
Of course if financial commentators are right and massive inflation is in the future, credit card companies become the perfect investment
I would say shorting from here is a bit risky.

American Express Is Now a Bank

I don't think Amex are in that much trouble, after all they just won a 4 billion dollar legal settleement from v and MA. Probably just a case of why look a gift horse in the mouth? if the fed wants to give me cheap cash am i really going to turn it down?

Also discover announced that it will use its deposits from Discover bank rather than commercial paper because its cheaper right now.

Five Great Businesses Currently on Sale

link to my blog

Five Great Businesses Currently on Sale

My god, have you been reading my blog on fool.com?. Its almost exactly what I have been saying since January.
Infact DFS is my largest investment, also own LM. You forgot about health insurers, I am long UNH.
Also long MCO, CSCO, PM, MKL and AXP is on my watchlist.
I did own FDX for a while but sold out before it dropped because of fuel, I agree getting back into a company like UPS or FDX will be a good move at some point.