I cannot think of a biz that AXP has that will do well. It won't be travel, It won't be their credit card business. I am a seller because although I thought a few weeks ago that they may have escaped I was wrong. I am now sticking to my prior views of sell baby sell.
With the economic downturn, rising unemployment, decline in house prices, and limited ability for consumers to continue using their homes as an ATM; credit card debt is poised to be the next disaster in the financial sector with bearish outlooks for credit lenders Capital One (COF), Discover (DFS), and American Express (AXP). Credit card processors such as Visa (V) and MasterCard (MA) have also declined with the overall market, but are leveraged to the volume of transactions with debit and credit cards rather than
Shares of this wide-moat gem are near five-year lows, thanks to consumer weakness and the market's cold feet regarding anything even remotely tied to financials or consumers. Amex won't rocket up the charts overnight, but for patient investors who are willing to go against the grain and grab shares right now, the long-run return prospects look almost absurdly favorable. If you currently have a position in American Express, you are right to own this stock -- it's a great business trading for a good price today. (And not coincidentally, Buffett is a longtime shareholder.)
AXP is very oversold. Market has overreacted to soft economy and its negative impact on AXP. Stock is moving up sharply off of 5-year lows with heavy volume. As the excess disposible income produced from the continued drop in oil prices begins to work its way through the economy, AXP will see a consequent recovery in earnings. Once stock passes minor resistance at 40, it should move quickly back to resistance around 50.
I mentioned in October that I planned to buy puts on Discover (DFS) because of current and impending credit card defaults. The stock hovered between around $10 and $12.50 before dropping below $7. I thought I missed my opportunity. (Why am I trying to time the buying of puts? Although I think DFS will eventually go to $0, July is the farthest out put available right now and I don't think it'll happen that soon. I don't short sell because I think it's riskier than puts, and the government loves to change the rules). Now that DFS is again above $10, I have another chance. If American Express
I mentioned in October that I planned to buy puts on Discover (DFS) because of current and impending credit card defaults. The stock hovered between around $10 and $12.50 before dropping below $7. I thought I missed my opportunity. (Why am I trying to time the buying of puts? Although I think DFS will eventually go to $0, July is the farthest out put available right now and I don't think it'll happen that soon. I don't short sell because I think it's riskier than puts, and the government loves to change the rules). Now that DFS is again above $10, I have another chance. If American Express
Up to 19,000 employees of Washington Mutual face being laid off this weekend as JPMorgan Chase turns up the synergy on its recent acquisition.
On Friday, JPMorgan Chase (JPM) said it expects to retain the 22,000 employees who work at Washington Mutual branches and 2,000 workers in the mortgage and wealth management divisions in California, spokesman Tom Kelly told Forbes.com. The company has not yet determined the total numbers to be cut in other states, but it planning to inform all former WaMu employees of their job status by Monday.
Except for the chosen ones -- CEOs and the like who have outrageous salary and benefit packages -- almost nobody has been able to escape the financial pain in the world today.
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Except for the chosen ones -- CEOs and the like who have outrageous salary and benefit packages -- almost nobody has been able to escape the financial pain in the world today.
