Waiting for Visa.....

A while back I recommended Mastercard (MA) as a core purchase. First at around $42.00 per share, and later at $102.00 per share. Yesterday the stock closed at $189.00, which is down from it's weekly high of $200.00. A gain of over 100% from when I last recommended the stock. I have sold quite a lot of this stock and am now tuning my attention elsewhere because I realize that a stock that costs $20,000 for a lousy 100 shares is beyond the means of many investors. I believe MA will continue to move up in the LONG TERM and I will continue to buy long, slightly-out-of-the-money calls. However, short term prospects look a little bleak, as the consumer spending is down, oil prices are surging, the credit markets are going through a bit of a whirlwind, and thus far the earnings reports coming from most companies paint a dismal picture for the rest of quarter. Mastercard will also face significant pressure when the IPO for Visa becomes a reality. Yesterday, American Express paid 2.25 bln to Visa to settle their anti-trust lawsuit. Discover and Visa are lining up Mastercard in their sights in a similar lawsuit so be prepared and think about some protective puts just in case.......

Another stock I picked this week is a little more affordable. Prior to it's earnings on Wednesday, November 7, I purchased 200 shares each of Onyx Pharmaceuticals (Nasdaq: ONXX) and Corrections Corporation of America (NYSE: CXW). Both saw considerable interest prior to their earnings reports. ONXX surged up by almost 20% on Wednesday morning, and CXW was up a nice, modest 7.5% on Thursday. PLEASE don't think I only pick winners. I bought Cisco (Nasdaq: CSCO) ahead of it's earnings report on Wednesday 11/7/07, and the stock went down 9% on Thursday. Luckily I ditched it before it reached bottom, but I still took a nice loss.......

In the next post I will give you details that led me to BELIEVE ONXX and CXW would rise after their respective earnings report.