MA, Mastercard

ma dec 25 2013 1ma dec 25 2013 2

The standard interest charged on these cards is somewhere between 19 and 22 percent, depending on the particulars and other byzantine things like “rewards” etc.etc. With the cost of funds for these card companies dropping close to zero they make out like bandits, especially when the actual credit risk is transferred back to the merchant or the bank that sponsors  the card. The question here is simple when is this stock in a bubble. The answer is fairly simple in most cases, when the stock goes parabolic, that is vertical on a normal chart. You can see this starting to happen in the arithmetic chart on the left, not quite there yet but pretty close. The semi-log chart will show as a perfectly straight line which, theoretically, could continue forever. Another year like this and the stock will be at $1300. We are about to re-enter the old channel  and this is often as good as it gets. A sell in our opinion, even a short if properly done.