Selling Mastercard (MA)
This entry was posted on 10 Nov 2006, 3:12 PM and is filed under Finance,options,Socially Responsible Investing,My Portfolio Trades.
Sold half my
MasterCard Inc (
MA) position at $89.43. The stock has nearly doubled since I bought it back on June 2nd ($46.98). It's even gone up further since I sold short puts on July 24th. When I bough the stock I thought I was buying a company with a forward p/e of 17. And while analysts have increased earning forecasts, this company is not growing like
Starbucks (
SBUX) or
Google (
GOOG). Why should I pay such a high multiple for a financial services company that has held a
duopoly* for so long. And I see that duopoly in danger from technologies and regulation. The
chart however looks great, and makes me want to hang on for a bit longer. What do? Sell half and wait.
Photo by 小猫王's *I tried to find some sites with a better explanation of a duopoly than
Wikipedia. I could not - Wikipedia, a non-for-profit enterprise is the poster child for the greatness and democracy of
Web 2.0. I donate to them. You should too.
Disclosures and Confessions: I own Mastercard (MA). I own no Google (GOOG) but have traded it and its options in the last two years. I currently own no Starbucks (SBUX) but have traded it in the last two years. I am currently short SBUX Jan 2007, 15 strike puts.
Disclaimer: Nothing in this blog is meant to be specific financial advice or a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult an investment professional familiar with your specific financial situation before buying or selling any security. 
