American Express will cease to exist unless we bail them & others out - again!

[deadbroke]

So tell me again, what should be wrong this company? Results look solid. Are worried about loan growth?

Waterfall decline that rivals that of highway 12's falls en route to Lom Sak from Phitsanulok started on the day you spoke about its rosy future.

[Robert24]

Look I'm not long AMEX and I'm not holding any stocks in the finance sector. So I'm not saying you should be long AMEX and that AMEX stock will do extremely well in the future. But I struggle to follow the people who say this company is about to go bust, people who say nobody is using/accepting AMEX cards anymore. Whereas reality is that card revenues and volume is up, profit is up of this company, they have some strong long term shareholders, ROE is 29% etc. Stocks were down last week because of Argentina, Espirito Santo and sanctions on Russia.

Now can you outline what your view is on AMEX? Do you also think that this company is about to go bust like AfterLos? And if so could you outline why? Are you short the stock?

[deadbroke]

Look I'm not long AMEX and I'm not holding any stocks in the finance sector. So I'm not saying you should be long AMEX and that AMEX stock will do extremely well in the future. But I struggle to follow the people who say this company is about to go bust, people who say nobody is using/accepting AMEX cards anymore. Whereas reality is that card revenues and volume is up, profit is up of this company, they have some strong long term shareholders, ROE is 29% etc. Stocks were down last week because of Argentina, Espirito Santo and sanctions on Russia.

Now can you outline what your view is on AMEX? Do you also think that this company is about to go bust like AfterLos? And if so could you outline why? Are you short the stock?

Yes I am heavily SHORT

Short @ $95.19 in early June 2014

Short @ $95.03 in late June 2014

Short @ $95.27 in early July 2014

All STOPLOSS is at just above major 423.6% Fibo resistance

Will pour on the coal in added short once under $87

Will pour gasoline on the SHORT once under $82 because once under this level a massive TREND change will be confirmed and downside will accelerate.

All speculation but I've placed my bets already as above. My STOP will limit my losses if wrong.

If correct I plan to exit the trade during the wide part of the tsunami when breadth is at its maximum - guesstimating this to be around $40-30 per share.

If correct on this trade will close out the position completely during this part of the wave as any further involvement will result in not getting paid in a timely manner when the Govt. steps in and takes over this snafu.

The proceeds of this trade will provide for 30 years of free life in LOS

If wrong, a couple ice cream cones is all I'll get.

My overall view:

American Express name will collapse and become a non-entity by 2015-18. It will appeal to the US govt. for a bailout. If they asked me, I'd let them fail - good riddance. Nazi style pressure on merchants to comply etc., plain old VISA is and will flog Amex easily and the disparity will grow during the decline that is en route or likely underway as we speak.

[Robert24]

thanks deadbroke for your response. Good to see that you put your money where your mouth is.

Can you let me know the rationale why you think AMEX will go bust? I understand you are dead sure they will, but I don't see the reasons comments. (I might go short as well if you have compelling arguments:)) From what I see in your response is that VISA and Mastercard can outcompete AMEX? Are you worried that Berkshire Hathaway is a big shareholder who has quite a good track record? Any view about the more affluent customer base of AMEX vs Visa and Mastercard, ie better quality of loan portfolio vs other card providers?

My experience from going short stcks is that you need a lot of patience. I'm short IBM qnd had to wait a long time for the stock to go down and I'm still waiting for it to drop a lot more. And I can probably provide you a whole book with reasons why you should be short IBM. I'd like to see some of those for AMEX too.

[deadbroke]

thanks deadbroke for your response. Good to see that you put your money where your mouth is.

Can you let me know the rationale why you think AMEX will go bust? I understand you are dead sure they will, but I don't see the reasons comments. (I might go short as well if you have compelling arguments:)) From what I see in your response is that VISA and Mastercard can outcompete AMEX? Are you worried that Berkshire Hathaway is a big shareholder who has quite a good track record? Any view about the more affluent customer base of AMEX vs Visa and Mastercard, ie better quality of loan portfolio vs other card providers?

My experience from going short stcks is that you need a lot of patience. I'm short IBM qnd had to wait a long time for the stock to go down and I'm still waiting for it to drop a lot more. And I can probably provide you a whole book with reasons why you should be short IBM. I'd like to see some of those for AMEX too.

Robert, wish I could give you the reasons you need but you see my reasons for shorting are technical not fundamental (earnings,balance sheets, stock news, CEOs etc.) - Technical means pure Price action. To put it to you in the simplest possible way - if I was living on a faraway mountain, no human contact, but voila I did have a laptop, an internet connection, a brokerage account and a DATA source to download the daily data to my laptop - no TV, no Utube (let's assume) - I could make the same type of decision about entry buy short sell on Amex. PRICE is the only data I need. Same about a woman - all I need is the smile at me, all the rest of the stuff, where she was born, her job, her folks, her ex-boyfriends etc., all useless info. The smile trumps 'em all. I can make and have made correct decisions about the women in my life based on that eye contact, a glowing smile beamed at me and the leaning towards me gesture aka body language.

Remember Enron? Earnings galore, great news, investors pouring in, alll great stuff .... but PRICE and Volume showed the smart money was leaving in droves and therefore only the dumb investors were holding the bag. No way a fella like me could have fallen for that fiasco.

With me, you break a monthly trendline to the downside and I'm outta there like a rocket.

You break a daily and I'm taking profits or going short.

Certainty? There is never any. There are only ODDS - when they're in your favor you take the shot.

Taking the shot does not guaranty success but if one never takes the shot one ain't alive the way I like to be.

[deadbroke]

. I'm short IBM qnd had to wait a long time for the stock to go down and I'm still waiting for it to drop a lot more. And I can probably provide you a whole book with reasons why you should be short IBM. I'd like to see some of those for AMEX too.

OK, so you understand the style I'm referring to ....... let's do your IBM. I don't play this stock but that's irrelevant.

(1) loook at the weekly chart to see why its slow to drop. Its bouncing off the 200 ema - I count 3 sure bounces and the 4th came close. The 200 ema is a very potent elastic band

with a high coefficient of restitution - it can reverse a falling trend in a heartbeat. So treat it with respect. If it breaks however, the stock will drop like a stone. Look at the huge +ve divergence generated by it.

(2) Place your Fibonacci tool on the 1993 low and 1999 high and observe how IBM's top hit at exactly 161.8%? this is called Fibonacci Extension of the wave. Uncanny. Stuff like this would cause me to exit instantly in April 2013. Of course this is in hindsight and everyone is a genius.

I would be wary of the bounce potential generated by the 200 ema.

[gerry1011]

I understand that some businesses don't like, and refuse to accept the Amex card.

They have their reasons. No problem.

On my side I do like Amex, and I do not like the businesses that don't accept it.

If a business does not accept my Amex card, I go to buy somewhere else.

Up to them not to accept the card, up to me to spend my money at businesses that accept the card.

I have Visa and MasterCard too, but Amex is by far the best (I am not such a pro American in most other cases though...)

But to be honest, most of the places I go to accept the Amex card without problem.

Sent from my iPhone using Thaivisa Connect Thailand

Edited August 5, 2014 by gerry1011

[deadbroke]

On my side I do like Amex, and I do not like the businesses that don't accept it.

Sent from my iPhone using Thaivisa Connect Thailand

Walk for a moment in their shoes, Your Magnificence

https://www.americanexpress.com/us/small-business/openforum/articles/are-small-businesses-losing-ground-to-corporations/

[Robert24]

thanks for your response deadbroke. Appreciate it. Let's watch and see how the share price of AMEX will develop. I'm more focussed on fundamentals in my analysis with regards to the Equities asset class but have some friends who use technical/chart analysis for their short term trading. I'm not familiar with that with exception of looking at historical prices in the long run.

[deadbroke]

thanks for your response deadbroke. Appreciate it. Let's watch and see how the share price of AMEX will develop. I'm more focussed on fundamentals in my analysis with regards to the Equities asset class but have some friends who use technical/chart analysis for their short term trading. I'm not familiar with that with exception of looking at historical prices in the long run.

Thanks Robert,

Its worth the time to have a simple look at the HISTORY of a stock. It tells about character and other personal features. One can be wrong too in one's assessment but that's an occupational hazard. I personally don't bother with stocks that have short history. This is one of the reasons I love the Dow Jones spliced with the British Empire all the way back to 1700s - look at that on a quarterly chart and its a sight to behold.

[deadbroke]

Just took partial profit on my overall position as American Express has descended to the strong support of 200 ema and could generate a substantial bounce.

5000 shares closed SHORT @ $86.46

Profit = $8.73 per share

Total profit = $43650 gross

Nett after commissions etc., Uncle sam (figure out tomorrow) and Mrs deadbroke's cut = zip

Just another day at the office earning zip for my efforts

[Robert24]

Q3 Earnings of AMEX published last night. Still solid:

EPS $1.40/net income $1.48bn. Up 8.1% vs same quarter last year.

Total revenue/interest income unchanged. Company managed cost base better to increase profit.

looks still very solid to me.

[SheungWan]

The party's over - that much is clear. But some folks seem to think it's a good idea to buy stocks near their all time highs.

Amen! Behold the 2nd commonsense person I have found at Thaivisa in a month - the first one is a fellow named Naam. I'll be happy if I find even 10 - usually at Forums the ratio is 1 per 3,000.

Yahoo Finance seems to agree with AfterLOS that American Express is overvalued and a cheap bugger to boot. See for yourselves

From November 2013, gotta be much worse now

"American Express gives investors a mere 1.1% dividend. That is low for a DJIA component and low for being a financial leader. We would point out that the street high on AmEx is $96 for a price target, so some analysts see the stock continuing to rise. Will investors buy an $81 stock just to make a $0.05 profit over a year, and is almost 17-times earnings a fair value for a financial stock?"

http://finance.yahoo.com/news/4-overvalued-djia-stocks-amex-160505010.html

Yahoo Finance. Right. What we have here is the last of the big spenders on financial research.

[Robert24]

Q4 results published last night. YoY profit up 11% to $1.45bn or $1.39 per share. Full year 2014 profit up 10% vs 2013 to $5.89bn or $5.56 per share.

Looks like this is a very solid company under strong management. NPL also much lower than other credit cards due to it's customer base being more affluent.

@deadbroke: hope you haven't lost too much on your short position. I don't think your technical analysis works, at least not with AMEX.