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A Gift During This Bear Market

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American Express - AXP

This financial giant has not been this cheap in years. It is highly unlikely that American Express's real world business has declined by 40% or that they will have enough customer defaults to justify such a discount.

This is the perfect time to buy a company that can be held forever and earn very high rates of return going forward. Before the crisis it could be argued that shares were worth close to $143 using a blended average valuation for banking assets and credit card business. Buying today you have an opportunity to double your money in a short amount of time (once COVID-19 fears pass and the world gets back to business) plus participant in the company's future growth with Return on Equity (ROE) of 29%.

Very few companies are able to generate ROE above 10% or even 5% so when you find high ROE companies trading so cheaply you must start backing up the truck.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.