According to Forbes, American Express is the 22nd most valuable brand in the world.  Buffett owns more than 15% of the company, and his ties and fondness are pretty well documented. (It seems like every other speech that he and Munger have given for the past 50 years has involved some reference to the vegetable oil scandal.  Munger even recently talked about how Valeant is NOT like Amex was in the 60s).  My point is Amex has street cred.

It is taking major heat (1) they recently lost the merchant rules antitrust lawsuit (now merchants can apparently put up signs saying they prefer visa or mastercard because of Amex’s higher fees); (2) they lost the Costco co-branded business; and (3) they lost the Fidelity co-branded business.  The Costco loss seems like it was a big issue, Fidelity not so much.

The Amex earnings are really going to be hurt in 2016 because of the Costco issue, but the antitrust issue doesn’t seem like a company crippler (even though I read a press release from Kenneth Chennault saying it was just that).

I read somewhere (maybe it was a Graham writing) that lawsuits are never as bad as they seem when you are on the receiving end, and never as profitable as when you are on the prosecuting end.  I can attest to this as a trial lawyer.

Even with the earnings hit, Amex’s earnings are still strong.  They are spending tons of capital trying to snag another big fish, another Costco.  Although their offshoot ventures, i.e. Bluebird, etc. seem, well, kinda lame.

Overall, its an awesome company with an awesome history.  Personal experience says that they are the best and they know it.  Even their employees are positive about their company…seems that way anyway.  Unfortunately they are embattled right now.

Visa is pac-maning their co-branded partnerships, and their customer base is completely dwarfed by visa and mastercard.  Then again business owners, execs and high net worth customers know Amex is the best.

Qualitatively, Amex is great.  They will continue to be great.