Now lets get one thing straight, MA has fallen from $320 a share to a modest $150 in the recent downturn of all downturns know as "The Recession, even after all that I still have love for them. Today they announced earnings that beat Wall Streets estimates and the stock is up $10 as we speak.
Now if you don't understand how MA works let me give you a quick explanation. MA does not lend money to anyone, so they have no credit risk. They simply perform the transaction for financial instituion. For example, you go to CVS and buy a pack of gum for $1.00. You decided to pay with your debit card, cause honestly who carries cash now a days. Your debit card is from you bank, but your card has the little mastercard logo on it, so $1.00 is taken from you bank account and MA charges the place you bought the gum a fee for using their card. Usually around 3%. So they just made .03 cents off poor CVS. Now think of all the transactions that occur, ya they get 3% of them. Not to bad if you ask me.
Ok so now your thinking well people are spending less, blah blah blah, but guess what? People still have to buy gas, groceries and shit from Wal-Mart (WMT) and you know what they are gonna use to buy it.... A Credit or Debit card and MA is going to take that all the way to the bank baby.
So now they you clearly understand how it works, go pick up some MA shares while they are just oh so cheap.
I found this picture from my younger years and figured I would share it with you guys. Ya I know, the girl was a beast, clearly she didn't need to wear those heals.
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