Mastercard is Burnt

Discussion in 'Stocks' started by ByLoSellHi, Jun 7, 2007.

  1. Nice 300x P/E multiple when consumers can't afford to put gas in their cars and retailers are sucking wind.

    Love it short!
  2. That kind of thinking usually results in getting burned.

    MA will rebound

    Understand that credit card companies thrive when people are cash strapped because they use credit.
  3. They pay down their bills and cut back on spending when the wealth effect is lost - which is exactly what's happening, as reflected on retailers' books.

    MA depends on transactional volume. It is inherently tied to the health of the retail sector. Very few people use cash in good times or bad. And in bad, they charge less/.
  4. Chart looks like a very very dangerous short. Keep a close stop in order to limit risk. Good luck.
  5. If you had a credit card or money you might know that people use credit cards a lot more when they have money.
  6. I should make it clear I'm buying puts here, not shorting naked or covered.

    She's a' gonna' retrace to 110. ;)
  7. Puts are a great way to play these. IV is cheap by historical standards and with the puts you have an automatic stop loss, i.e they become worthless.

    Good luck on MA, I don't own it, rooting for you :D
  8. Thanks.

    As a %, the puts aren't any more expensive than most others, and I see a lot of downside if this does break. It's the kind of chart I love, up 300% in the last year, and an incredibly rich multiple, in a pure consumer play.

    There aren't many times I bet aginst the consumer, but I will make an exception here and now.
  9. I lost 350 in the AM on this trade..i thought about holding till noon for a reversal..but sold out instead..thank god it was only a paper trade!. :eek:
  10. I love this trade. Down $8. Panic selling, anyone?
    #10     Jun 7, 2007