You may have noticed that in the last few days, that American Express (AXP) stock price has jumped to the tune of +9%.
American Express (AXP) – 30 Minute Chart (tradingview.com)
News broke last week that ValueAct Capital has taken a one billion dollar stake in American Express (AXP) …
“ValueAct Capital Management has amassed a stake in American Express Co., people with knowledge of the matter said, as the activist fund considers pursuing shareholder-friendly changes at the credit-card issuer.
ValueAct’s investment is about $1 billion — still less than 5 percent of American Express — said the people, who asked not to be identified because the holding isn’t yet public. American Express jumped 6.3 percent to $79.72 at 4 p.m. in New York, the most in four years, for a market value of about $80 billion” – Bloomberg
If you search through past Sharpe Income posts, will you find that I ‘predicted’ this on a previous entry? Did I have any idea such a move was coming?
I will say that I do not think it an accident that when I use the same type of formulaic approach to purchasing companies at a great value, that Hedge Funds with billions in capital use? Especially one with a name like ValueAct? Well … this really isn’t much of a ‘surprise’.
Investing profitably for the long term is not about prediction. It’s about calculating what is trading at a great value and letting the market take care of the rest.