Help me to learn to trade stocks!!!

[Broken Arrow]

Thank you tripod. Now THAT's the kind of answer I am looking for! I do have a few questions though... and perhaps it will also shed some light as to why I didn't get into the buy....

Visa uses an open-ended royalty system that Mastercard also uses, Discover has at a discount, and American Express is opening up with soon. What competitive advantage does Visa bring with theirs that others do not?

The IPO was only a month ago. How did you conclude that it was undervalued, despite all the hype?

Again, what is the forward fundamental that suggests that Visa will sustain this level?

Finally, would you recommend a buy NOW? Because what happened has already happened right? And I can't go back in time to buy it at the IPO price.... So, the only thing I can consider is whether to buy it now or not.

I hope this doesn't seem to come across as personal attack either. I've got money in reserve for a buy if this is still a good opportunity. Again, I'm really happy for you guys that Visa is panning out so well. I agree Visa is indeed a good company, but is it a good investment now?

[tripods68]

The edge for VISA is they don't carry credit liability like AMEX. They are simply a transaction company; therefore they carry no default risk. Like AMEX which I do carry BTW, they are subject to high default risk in bad economy. In addition, AMEX is already a matured company, which means the only way to grow earnings is to lower default risk, or expand their products which also carry risk at the expense of their revenues. On the other hand, VISA employ less than 6000 people worlwide and they have so much growth potential which carry high valuations (price per share) in the next 5 or 10 years. As far the stock being undervalued, this came from analysts I read about prior to IPO. Much like their counterpart MasterCard (MA) which has a market share around 40% their stock price is at $291 as we speak since going public in 2006. Go figure!

As far the stock outlook, I'm looking to buy more shares in the next several months. My goal is to get 100 shares. So far I've accummulated 40 shares @ 59. I do recommend buying this stock on the dip which is my strategy when i want to accummulate stocks over time to get to my goal. However, I'm long on this stock so you need to adjust your expectation depending your risk tolerance.

[Broken Arrow]

Ah, a prompt and excellent response. Thank you. Now... hmm... this is the part where I think I may be running the risk of coming across as a poo-poo head.

But I do feel the need to point out that Visa does indeed offer revolving debt products, and without looking into their numbers, I currently can't imagine their default risks any higher or lower than Mastercard.

However, I do have to disagree about American Express being a higher default risk. American Express' core business has always been the charge cards, and it's typically held by clientele that are a lot more financially stable. The credit offerings are a more recent development and their royalty system is still closed last time I looked.

That said, I do agree about much of what you said, especially going long and buying on dips. I think I'll maintain a "wait and see" approach on V, but I think I've rained enough on people's parade on this one. Here's to hoping that it continues to prosper for you guys.

[tripods68]

VISA offers alternative payment choice, but don't offer debt to no one. That link you referred are various payment options VISA offers. Debt are carried by Bank like BOFA, Wells Fargo, CITIGROUP, etc...that offers VISA logo on their cards. VISA does not extend credit to anyone. Try again!


Anyway, Here's one article i found, link is below:


MasterCard was offered at $39 a share, less than its proposed target price, in May 2006. But shares closed Monday at $198.45. In each of its quarterly reports so far, the company easily topped Wall Street estimates of its earnings per share.

In January, Craig Maurer, a top-rated analyst on MasterCard who rates the stock "buy," renewed his price target for the shares at $260 after seeing the company's fourth-quarter results.

"There are many who missed out on the MasterCard offering," said Menlow.

Like MasterCard, Visa is not a lender but a processor of card-based consumer purchases, which dominate retailing. Its revenue comes from fees paid by merchants who offer the card.

By contrast, credit card issuers that extend credit to customers, including American Express, Capital One Financial and Riverwoods-based Discover Financial Services, saw their share prices swoon late last year along with the downturn in the economy.

Visa charges ahead with IPO plan -- -- chicagotribune.com

[hacik.istanbul@yahoo.ca]

Regular trading in stocks is not suited to the faint of heart investor. Unless you have a real understanding of the industry and the growth potential of the company you are investing in, I recommend taking advice from a professional who understands your specific needs and risk tolerance. Please don't be misled by all the spectacular advertising about how you can strike it rich with little or not money. Proper investing takes time, patience and a clear understanding of your goals. Good Luck ! Hacik Istanbul

[Broken Arrow]

Hmm! Thank you for the clarifications! I will definitely keep an eye on this as a potential future buy then.

[schrutzen]

I started out two three years ago when the market was booming..
i think i just got lucky cos if i started now i could have lost lots of money since the economy is in a bad swing.