What's your % gain on them ? And if you don't mind, what's the dividend yields? I am just curious about business proposal in case of long term hold, thanks.
Great Video - I own Visa currently and think the dividend growth, share buybacks and strong performance will continue to deliver outsized returns, even with valuations being stretched - Of course my position entry was at a slightly lower multiple than the current trading price - around $197 per share 👍
Chuck, I remember having this same discussion with you back in 2015 when Visa was 27x earnings. Too expensive! I'm willing to bet the price will be substantially higher 7 years from now as well, as you pointed out at the end of the video. Thanks for the great service and presentation as usual!
With all due respect let me add a point of clarification. When a stock is overvalued, especially a fast grower like these, when you overpay it does not mean you will not make money. Instead it means you are taking on more risk than you should. I have said many times that you cannot overpay for fast growing company and lose money as long as you are willing to hold it long enough. Nevertheless, if you look closely at the graphs in this video the optimum time to buy visa was prior to 2012. When you pay fair value you participate fully in the growth of the business and you do it at controlled risk. Otherwise you can still make money but my point is you are taking on more risk than you should. I hope this clarifies things. Regards, Chuck
@@FASTgraphs I don't disagree with anything you say here. But it isn't 2012. We have to decide whether to buy today. There are stocks out there that are a better value, but I don't really see too many better companies. We may get a chance to buy V or MA again at a bargain, or we may not. I contend you are more likely to make more money overpaying for a spectacular company, than getting a bargain on a run of the mill stock. Love your service, and thanks again.
Interesting discussion here. Although I'm more inclined to agree with darth. Constantly seeking undiscovered "bargains" in the market is like trying to find a perfect love shaped pebble at the beach, it's very hard, and you're more likely to find value traps instead. It really boils down to how superior is your analysis in seeking out these bargains compared to the next person who is probably much more equipped, works in a large institution and has more tools at his disposal. Because it's really hard to beat the market! Yes, buying an incredible company like visa and mastercard at a present "premium", you lose out a bit on the value side, but these companies hardly ever trade at a steep discount anyways, unless there's blood in the streets like in 2008, a pandemic, or some kind of global catastrophe, meaning you will always have to buy these companies at a premium more often than not. Nobody wants to sell their million dollar home to you for dimes on the dollar, and this applies in the stock market too and pretty much everything else
Update: i found a way to decrease my cost basis and thereby reduce risk while holding onto the stock and not missing out on any upside and I am doing it now!
@@darthnatas953 I think this is one of those situations where you could quote Warren Buffett. "It's better to buy a wonderful company at a fair price than a fair company at a wonderful price."
Would you be willing to do a video on NEP? (NextEra Energy Partners). Great video on V and MA! Have owned both for a long time! Loved your son's deep dive into the balance sheets
Chuck- again phenomenal stuff. Could you guys think about doing a “ twins from different mothers” comparison with , say, Home Depot and Loews, Citigroup vs JPM or Shell vs XOM ? You guys rock. Love the attention to detail.
I made same request- not having seen yours. Just as a consumer, I’m all in w HD. I would bet Chuck will conclude Lowes is a better value. HD is like Next Era, Apple and Automatic Data; they very rarely come into fair value. Ditto Grainger, which I bought during Covid Crash. It takes a tremendous amount of patience to follow these A list companies and buy them when the rare opportunity presents. Dollar General just sold off 20%, which got me interested. Old WS adage= don’t eat the soup while it’s still hot. Costco is another phenomenal company that gives you a chance to buy it at fair value once every decade at best
Just want to clarify: When you say "measuring performance without measuring valuation is a job half done:" You are referring to the performance of the company generally, not the performance of your specific investment in the company. Correct?
Actually, I'm referring to the performance of holding the stock. This means if you buy the stock when its overvalued you will earn less than the company generates as a business, conversely if you buy when the stock is undervalued you will earn more than the company generates as a business, and finally if you buy the company had value and you are participate in lockstep with the growth of the business. Hope that clarifies it, regards, Chuck
Both are pretty expensive and their comfy oligopoly with AmEx might tempt some governments to rein in on them. I've seen both companies hit by EU legislation in 2015 when credit card commissions were capped at 0.3% of the transaction sum, far below what they had even charged large corporations. Another open flank is the interest rates they are charging - those might be considered "predatory lending" and similarly capped in some legislations. Furthermore, the payment platforms created by Amazon et al. might cut into their business so I guess I'll pass on them...
They dont charge interest. They run payment systems. I dont see any hit from EU as EPS is much higher now than in 2015. And tell me a company which has no competition and government cannot influence it by regulations?
@@Cap_management I just took the 2015 EU commission cap as an example how easily governments can hit these companies. With the average US citizen owing more than 6,000 USD in credit card debt at APRs around 20%, I guess the business model of luring people into high interest rate debt might come under scrutiny - and even if it's not V and MA charging the interest, any caps there will seriously hit their business, too.
@@notroll1279If even the government needs to step in and "regulate" you can be pretty damn sure that business is a great business and makes a ton of money. It is actually a sign of strength and not a weakness. Remember msft was heavily hit with anti-trust back in the late 90s and early 2000s, but it still has grown by leaps and bounds since then and greatly beating the market by a huge margin
Visa could be a better company when looking at balance sheet but share price tracks EPS and EPS growth. Share price does not track cash on hand, assets, debt etc. so it makes this metrics almost irrelevant for shareholder return. I Mastercard will grow faster than Visa as analyst suggest than you will make more money with Mastercard. Another great example of this is UPS vs Fedex where UPS is a higher quality company without doubt but Fedex was growing faster and make more money to shareholders than UPS because growth was better.
Billionaire Old man Larry Tisch, when I asked how he got rich replied “insurance is a great way to build wealth over time” Time being the operative variable. there’s a reason why the tallest buildings in every major city across the globe have the names of insurance companies on them. The float is a beautiful thing. Old Republic, Chubb, AIG, Assurant, WRB, Trv are all solid companies. I Like Comcast and Disney as turnaround plays. Disneys balance sheet is a disaster but their content is formidable
With rising competition from Apple Pay, Google, Venmo and all the other 'electronic transfer' alternatives, I have chosen to skip Visa/MC. I don't believe in the long term for these.
No, because in those broad market index funds I would also be unhappy that I own a lot of stocks I would never invest in. However, I have looked at companies where I was upset that I missed the boat. Regards, Chuck
@@coocoocachooglin I agree with the uploader. I would hate owning low quality companies through index fund investing. Even though we may have "missed the boat" im sure there will be a time in the future where shares hit an attractive valuation, we just have to be ready. I also think that there will be many opportunities in the future to find other high quality companies.
@@chibble3591 I guess you can just buy Chuck's Fast Graphs and scan for high quality companies and when they hit an attractive valuation you could just buy those then.
@@vestedinterest5655V and MA are payment processors, not a credit card company. The other guy is right. AXP is totally different. AXP is more of bank these days as well. They issue credit cards AND provides credit card services. MA and V simply process the payment and that’s it. To put it in perspective people not paying their balance, would have no impact on V or MA at all. But it would impact AXP.
I bought both companies in my mid 20s a decade ago. I will hold these businesses for the rest of my life.
Why to invest money if you will never realize gains for rest of your life?
@@Cap_managementtake the dividends for paying for your lifestyle, pass on the assets to allow generations of family doing the same
@@xXRedEyedStrangerXxExactly, if your stuck in the mindset of buying $250K cars and a yacht, then you will never accumulate real wealth.
@@Cap_management "Why to invest money if you will never realize gains for rest of your life?"
Ask Joe Kennedy.
What's your % gain on them ? And if you don't mind, what's the dividend yields? I am just curious about business proposal in case of long term hold, thanks.
Great Video - I own Visa currently and think the dividend growth, share buybacks and strong performance will continue to deliver outsized returns, even with valuations being stretched - Of course my position entry was at a slightly lower multiple than the current trading price - around $197 per share 👍
Brilliant video. A masterful presentation of the valuation of these two companies. Thank you.
Wow very deep dive and a lot of valuable information. Thanks as always!
Chuck, I remember having this same discussion with you back in 2015 when Visa was 27x earnings. Too expensive! I'm willing to bet the price will be substantially higher 7 years from now as well, as you pointed out at the end of the video. Thanks for the great service and presentation as usual!
With all due respect let me add a point of clarification. When a stock is overvalued, especially a fast grower like these, when you overpay it does not mean you will not make money. Instead it means you are taking on more risk than you should. I have said many times that you cannot overpay for fast growing company and lose money as long as you are willing to hold it long enough. Nevertheless, if you look closely at the graphs in this video the optimum time to buy visa was prior to 2012. When you pay fair value you participate fully in the growth of the business and you do it at controlled risk. Otherwise you can still make money but my point is you are taking on more risk than you should. I hope this clarifies things. Regards, Chuck
@@FASTgraphs I don't disagree with anything you say here. But it isn't 2012. We have to decide whether to buy today. There are stocks out there that are a better value, but I don't really see too many better companies. We may get a chance to buy V or MA again at a bargain, or we may not. I contend you are more likely to make more money overpaying for a spectacular company, than getting a bargain on a run of the mill stock. Love your service, and thanks again.
Interesting discussion here. Although I'm more inclined to agree with darth. Constantly seeking undiscovered "bargains" in the market is like trying to find a perfect love shaped pebble at the beach, it's very hard, and you're more likely to find value traps instead. It really boils down to how superior is your analysis in seeking out these bargains compared to the next person who is probably much more equipped, works in a large institution and has more tools at his disposal. Because it's really hard to beat the market! Yes, buying an incredible company like visa and mastercard at a present "premium", you lose out a bit on the value side, but these companies hardly ever trade at a steep discount anyways, unless there's blood in the streets like in 2008, a pandemic, or some kind of global catastrophe, meaning you will always have to buy these companies at a premium more often than not. Nobody wants to sell their million dollar home to you for dimes on the dollar, and this applies in the stock market too and pretty much everything else
Update: i found a way to decrease my cost basis and thereby reduce risk while holding onto the stock and not missing out on any upside and I am doing it now!
@@darthnatas953 I think this is one of those situations where you could quote Warren Buffett. "It's better to buy a wonderful company at a fair price than a fair company at a wonderful price."
Very informative on both the graphs and financial statements. Neither of these stocks have the MOS I like to see personally.
Are you a short term trader or a long term investor?
Would you be willing to do a video on NEP? (NextEra Energy Partners). Great video on V and MA! Have owned both for a long time! Loved your son's deep dive into the balance sheets
Good video! Would be nice to have something similar between Lowe's ans Home Depot
Yes Mr. Chuck - valuation matters a lot! Thus, I started a position in Fidelity National Information Services.
Thanks a lot for your videos!
What is the best buy now Visa Mastercard or Fidelity National ?
Chuck- again phenomenal stuff. Could you guys think about doing a “ twins from different mothers” comparison with , say, Home Depot and Loews, Citigroup vs JPM or Shell vs XOM ? You guys rock. Love the attention to detail.
I bought visa last month and will hold for decades, but I wished I had bought the last decade😂
Excellent analysis! Thank you for sharing.
Both very interesting, though there clearly will be better times to buy them than right now.
I made same request- not having seen yours. Just as a consumer, I’m all in w HD. I would bet Chuck will conclude Lowes is a better value. HD is like Next Era, Apple and Automatic Data; they very rarely come into fair value. Ditto Grainger, which I bought during Covid Crash. It takes a tremendous amount of patience to follow these A list companies and buy them when the rare opportunity presents. Dollar General just sold off 20%, which got me interested. Old WS adage= don’t eat the soup while it’s still hot. Costco is another phenomenal company that gives you a chance to buy it at fair value once every decade at best
I own a bit of both. Maybe should've bought more, but much better than nothing! Thanks for the review.
Would you cover WBA? I'm curious to hear your thoughts on it after the recent earning.
I dont think we will be able to buy them at a fair or even lower valuation untill the growth slows down ...😕
Great video. Visa looks like a moderate buy to me at the moment with a forward P/e of 24
Just want to clarify: When you say
"measuring performance without measuring valuation is a job half done:"
You are referring to the performance of the company generally, not the performance of your specific investment in the company.
Correct?
Actually, I'm referring to the performance of holding the stock. This means if you buy the stock when its overvalued you will earn less than the company generates as a business, conversely if you buy when the stock is undervalued you will earn more than the company generates as a business, and finally if you buy the company had value and you are participate in lockstep with the growth of the business. Hope that clarifies it, regards, Chuck
Thanks for the statements Insight!
Both are pretty expensive and their comfy oligopoly with AmEx might tempt some governments to rein in on them.
I've seen both companies hit by EU legislation in 2015 when credit card commissions were capped at 0.3% of the transaction sum, far below what they had even charged large corporations.
Another open flank is the interest rates they are charging - those might be considered "predatory lending" and similarly capped in some legislations.
Furthermore, the payment platforms created by Amazon et al. might cut into their business so I guess I'll pass on them...
They dont charge interest. They run payment systems. I dont see any hit from EU as EPS is much higher now than in 2015.
And tell me a company which has no competition and government cannot influence it by regulations?
@@Cap_management
I just took the 2015 EU commission cap as an example how easily governments can hit these companies.
With the average US citizen owing more than 6,000 USD in credit card debt at APRs around 20%, I guess the business model of luring people into high interest rate debt might come under scrutiny - and even if it's not V and MA charging the interest, any caps there will seriously hit their business, too.
@@notroll1279If even the government needs to step in and "regulate" you can be pretty damn sure that business is a great business and makes a ton of money. It is actually a sign of strength and not a weakness. Remember msft was heavily hit with anti-trust back in the late 90s and early 2000s, but it still has grown by leaps and bounds since then and greatly beating the market by a huge margin
Great analysis
Visa could be a better company when looking at balance sheet but share price tracks EPS and EPS growth. Share price does not track cash on hand, assets, debt etc. so it makes this metrics almost irrelevant for shareholder return.
I Mastercard will grow faster than Visa as analyst suggest than you will make more money with Mastercard.
Another great example of this is UPS vs Fedex where UPS is a higher quality company without doubt but Fedex was growing faster and make more money to shareholders than UPS because growth was better.
thanks Chuck
Thanks.
How do you export the financials to the spreadsheet? Is is a copy + paste or there is an export tab?
Great companies but slightly too expensive for my liking still some better bargains out there currently
u got a bargin for me? Cant find anything high quality at cheap prices anymore 😢
bargain *
Billionaire Old man Larry Tisch, when I asked how he got rich replied “insurance is a great way to build wealth over time” Time being the operative variable. there’s a reason why the tallest buildings in every major city across the globe have the names of insurance companies on them. The float is a beautiful thing. Old Republic, Chubb, AIG, Assurant, WRB, Trv are all solid companies. I Like Comcast and Disney as turnaround plays. Disneys balance sheet is a disaster but their content is formidable
People have been saying this for years though. A high PE isn’t necessarily a bad thing.
Hello , what do you think of VFC 52 weeks low . Could you do an analysis ? ;)
I make it a policy of not trying to guess where stock prices will go in the short run. I consider it an exercise in futility. Regards, Chuck
Could it just be that MA is spending more on investments/marketing/cap ex than V is?
With rising competition from Apple Pay, Google, Venmo and all the other 'electronic transfer' alternatives, I have chosen to skip Visa/MC. I don't believe in the long term for these.
How do people top up their apple/google pay, paypal, and other 'electronic transfer'?? With their visas/mastercards of course!
Chuck. Have you taken a look at FHN
Do you ever look at these companies and think, damn I missed the boat, but are happy that you own them in your low cost broad market index funds?
No, because in those broad market index funds I would also be unhappy that I own a lot of stocks I would never invest in. However, I have looked at companies where I was upset that I missed the boat. Regards, Chuck
@@FASTgraphs Do you not have any index funds?
@@coocoocachooglin I agree with the uploader. I would hate owning low quality companies through index fund investing. Even though we may have "missed the boat" im sure there will be a time in the future where shares hit an attractive valuation, we just have to be ready. I also think that there will be many opportunities in the future to find other high quality companies.
@@chibble3591 I guess you can just buy Chuck's Fast Graphs and scan for high quality companies and when they hit an attractive valuation you could just buy those then.
Why these companies have very different ROI ratios?
This was covered in the video. It has to do with buying back stock and retiring or keeping it in the treasury to be reissued later.
I buy whether the market is up or down. Fuck timing the market.
I'd love to see American Express added to the comparison.
AXP is a different company than the 2 in this video. The comparison would be unfair.
@@shawnstanley4784 why exactly? they are all credit card companies.
@@vestedinterest5655V and MA are payment processors, not a credit card company.
The other guy is right. AXP is totally different. AXP is more of bank these days as well. They issue credit cards AND provides credit card services.
MA and V simply process the payment and that’s it. To put it in perspective people not paying their balance, would have no impact on V or MA at all. But it would impact AXP.
First!
Buy shares in either, sit on your ass and do nothing, get rich boi. It would make a terriable movie plot but it is an easy way to grow rich over time.
*PromoSM*
Please go back to value stock lists. Visa and Mastercard are overvalued trash
That was the point to illustrate overvaluation and how it affected rate of return is not recommended by today.
What are your thoughts on Discover (DFS)?