We Study Billionaires - The Investor’s Podcast Network TIP281: Intrinsic Value Assessment of Mastercard w/ Sean Stannard-Stockton (Investing Podcast)
Feb 9, 2020
In this engaging discussion, Sean Stannard-Stockton, President of Ensemble Capital, dives into the intrinsic value of Mastercard. He sheds light on how Apple's innovations have reinforced Mastercard's market position in payments. The conversation highlights the growth opportunities in fintech and the competitive landscape, particularly with emerging players. Sean also shares insights on managing investment risks and offers practical advice for novice investors on building a balanced portfolio.
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MasterCard's Business Model
- MasterCard's business model is incredibly profitable, with high margins and substantial cash flow.
- They reinvest aggressively in growth areas like business-to-business payments, unlike complacent incumbents.
MasterCard's Role in Payments
- MasterCard and Visa facilitate transactions between banks, merchants, and customers, taking a small percentage.
- They've solved the chicken-and-egg problem of network adoption, creating a near-unbreakable advantage.
Fintech and Apple Pay
- Fintech companies, initially perceived as disruptors, have largely built upon MasterCard's existing rails, furthering their growth.
- Apple Pay's adoption of MasterCard and Visa rails validates their dominance.