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Today's Financial News - Posted August 3, 2009
We pride ourselves on unique visions and foresight. Even more so, we love to brag every time when of our free tips makes you money.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): It is becoming a common theme. On Monday mornings, as I sip my second or third cup of black coffee, I stare at a blank screen while the computer boots up for a week’s worth of activity.
Over the last several weeks, as the black box whirs and clicks to a start, I cannot help but wonder if the market can continue its positive momentum. So far, the bulls have not let anything stand in their way. It is just as true today as it was last week and the week before and the week before that.
Of course, a rising Dow does little if you cannot make some money off of it. If you have been following my advice lately, it is time to do just that.
Yes, it is time to unload one of those free picks readers are constantly begging for… with gains of over 20%.
Lock ‘em in, folks
When I initially recommended buying shares of Discover Financial Services (NYSE:DFS), I did it knowing the knocked down credit sector would eventually rebound. When the market was full of fear last September, traders hammered shares of just about anything that had to do with the banking or credit sectors.
As a company fairly removed from the opaque derivatives market, Discover was about as clear from the credit crunch as any credit card company could be. After discounting share price, it was only a matter of time before the markets fixed their mistake.
That time has come. Over the last month or so, shares of Discover have climbed from $9 to over $12 today. With gains of over 20% on the table, it is time to sell and move on.
Why not hold and wait for more gains? I know you are asking the question.
The answer is simple. There is better money to be made, with lower risk, elsewhere, even in the credit industry.
Instead of waiting and hoping shares of Discover get back to the $15 mark, you can take your gains and put them into a much more valuable asset, like Visa (NYSE:V) or MasterCard (NYSE:MA).
Both of these companies are exciting investors these days as they found a way to actually increase their revenues while so many other companies are enduring horrific top-line reductions. Thanks to a burgeoning debit-card business, which accounts for nearly half of their revenue, these two companies have a bright future.
With no access to this growing market segment, Discover will be forced to stand by, slowing losing market share, as the industry big-shots add momentum.
While I am not officially recommending a play in either of these two companies (I am reserving the act for my paying subscribers over at TFN Strategic Trader), I do recommend selling your shares of Discover and doing some due diligence on its biggest competitors.
Is there any better way to start a week than locking in some gains? The only thing I can think of is doing it again tomorrow.
Next Article: Three winners from Cash for Clunkers
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