So trying to read the news and other people's opinions on Visa should have you confused at best. I think I should change careers and become a financial advisor, since you don't ever have to be right nor consistent to sell your services to those trying to figure out what to do with their money. I have seen Cramer go from everyone shoudl buy Visa to having a bearish stance on it a few days ago. Most blogs or comments on Google Finance sway from buy now at before it continues to climb to sell because it's going to test its IPO price and beyond.
Since I am not a fincancial advisor I will stick with my original story of buying some at the open, then more as it dips and then make a last run as it begins to climb on some strong volume and instituitional interest.
I have purchased three times now, first at 56.70, then 64.60 and finally at 60.05. My cost basis is right around 60 even. Had I not bought the first round I would be negative right now as are much of the people I know. Not by much but it is never a good feeling to put a chunk of money into a stock and continue to see red when you check your account.
The strategy worked so far. But the question is will Visa rise, and if so when. Well, if I could answer those questions with a high probability I wouldn't be writing this blog... So let's take a semi-educated view on this. At first look, it's Visa so of course it's going to grow and probably surpass Mastercard. This is what a lot of people have said and are still saying. This is purely an emotional investment strategy, not to say it will not perform like this but still not based on facts and figures.
The latest news about the lawsuit investigation about interprocessing fees in the EU already hit Mastercard and didn't effect its price. Besides Vise Europe is not included in the IPO shares.
Asian market commentators are talking about the numbers of users potentially available and the current talks of "card technologies" that contain the Visa logo on them. So this is good news, since for the stock to grow, either investors buy it up ( push the P/E way up or it grows legitimally because the company has grown...
The stock has been porforming very well in relation to the market, very very low volume right now. No radical price fluctuations and has not challenged any new floor.
Once institutions are allowed to buy, and if they do, this will help us individual investors since there's nothing like watching what the big-guys are doing with the stock and following suit, sometimes...
Finally, the insider buying at the original IPO price is somewhat encouraging. Albeit, these guys, who do not need the extra money, could turn around and sell it for a 20$ increase and make some quick profits. But usually a good sign when insiders are buying and not exercising options to turn around to sell.
I have been watching moving averages and bolinger bands when I bought just to add a little technical credance to what I was doing, I did get in a good price points within the day by watching the charts and buying after-hours.
My plan is to ride this out until the economy stabilizes and institutions start buying as well as watching the options when they become available and buy as the indicators support buying as well.
My last word for the day is to hold on to this over the next 12-18 months before deciding to do anything. That is unless the market falls out...
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