On Visa and Commodities: An Addendum

Visa (V) has a great model and in the long run will be a great stock. Visa, once the economy rises and we have a sound financial sector, will continue to go up to eventually surpass MasterCard (MA).

But recent events show that Visa, like any other stock, is not bullet proof. Visa is susceptible to the financial sector. It is susceptible to the economy. It is susceptible to a BEAR market. It is susceptible to the rise in oil. Not because I say so. Because Wall Street says so. Despite the fact that Visa had stellar earnings, it did not rise to the expectations of many.

I predict Visa will have a new leg this year. It may even see 90. I see signs that point to an illusionary rise in the financials. Mainly due to one analyst boasting that the financials have hit a bottom (I disagree), the drop in oil prices, and out of favor commodity markets.

I wrote another article on the inelasticity of supply side oil prices. The acceleration to this scenario will be if there is a military confrontation with Iran later this year. The ingredients for such an event happening is becoming more real. I say be ready. I plan to pull out of Visa once it breaks 80 again, (I bought at the IPO price and high 50s).

Now is a great opportunity, in my opinion, to stack up on commodities. Fertilizers, coal, and oil are dirt cheap. The storm is brewing in my opinion. Should the Iran confrontation occur as I predict, commodities will hit the roof. Timing is everything, especially in the commodities market. That is why I did not panic early in July when commodities went down. I feel that this was a temporary correction. The next commodity rise will happen as soon as supply side effects in oil prices go up. This will happen sooner than you think..Frank Maura