February 13, 2015 12:20 p.m. eastern time

With American Express down another 3% today to $78, I decided to add a small amount to my relatively modest position. Basically I am showing the courage of my convictions in having recently rated it a a Buy at $93. I don’t know the impact of losing the Costco contract and I do know that payment cards are a technology-based industry. Credit card companies have been extremely profitable for decades. But it is the type of industry that could be disrupted. Still, the industry, including American Express also has the benefits of the “the network effect” and “sticky customers” so I am not expecting an imminent decline in the industry. For the most part, retailers have had no choice but to accept the Visa and Mastercard and many also feel forced to accept American express. Costco is the rare case of a retailer that has the upper hand and can decide to accept only one credit card and can squeeze for razor thin merchant fees.