American Express: A Deep Dive into Its Business Model and Moat

The Investing for Beginners Podcast - Your Path to Financial Freedom

Andrew Sather & Glassbox Media

Business, Investing

4.2 • 1.5K Ratings

🗓️ 29 May 2025

⏱️ 50 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode of Investing for Beginners, Dave is joined by Brett Schafer from Chit Chat Stocks to delve into the business model and competitive advantages of American Express (Amex). They discuss Amex’s unique vertically integrated model, combining credit card issuance with payment processing, and its robust revenue streams from swipe fees, credit card loans, and high-fee premium cards. They also highlight Amex’s strong brand equity, historical resilience, and strategic partnerships. They tackle potential risks, the benefits of their network effect, customer satisfaction issues, and the prospects of emerging competitors. To conclude, Brett shares his cautious optimism about the company and his investment strategy around it. 00:03 American Express: A Deep Dive 01:18 Buffett's History with American Express 02:54 American Express Business Model Explained 04:04 Revenue Breakdown and Key Drivers 05:56 High Fee, High Reward Cards 11:28 Expanding Customer Base 14:25 American Express' Competitive Moat 21:24 The Power of American Express 24:30 The Value of American Express for Merchants 25:00 American Express's Marketing Strategy 26:10 Pandemic Impact and Recovery 27:36 Potential Risks and Downsides 29:35 Competition and Market Position 35:32 Why Not Invest in American Express? 41:05 Key Performance Indicators to Watch Timestamps are generated by artificial intelligence, and are not 100% accurate depending on the platform used for listening. Today’s show is sponsored by: Go to ⁠⁠⁠⁠SHOPIFY.COM/beginners⁠⁠⁠⁠ to start selling with Shopify today. Get your summer savings and shop premium wireless plans at ⁠⁠⁠⁠MintMobile.com/beginners⁠⁠⁠⁠ Today's show is sponsored by BetterHelp Get 10% off your first month today with ⁠⁠BetterHelp⁠⁠ More from Brett: Chit Chat Stocks Podcast Chit Chat Stocks Substack Brett's X Handle CCM_Brett What do Dave and Andrew recommend? Andrew works really hard to find the best insights he can every single month at ⁠⁠⁠⁠Value Spotlight⁠⁠⁠⁠. To see a sample of his previous work, go to ⁠⁠⁠⁠stockwriteup.com⁠⁠⁠⁠. Have questions? Send them to ⁠⁠⁠⁠[email protected]⁠ ⁠⁠⁠⁠⁠ SUBSCRIBE TO THE SHOW ⁠⁠⁠⁠⁠ ⁠Apple⁠⁠⁠⁠ | ⁠⁠⁠⁠Spotify⁠⁠⁠⁠ | ⁠⁠⁠⁠YouTube⁠⁠⁠⁠ | ⁠⁠⁠⁠Amazon⁠⁠⁠⁠ | ⁠⁠⁠⁠Tunein ⁠⁠⁠⁠ For sponsorship inquiries, reach out to us at ⁠⁠⁠⁠[email protected]⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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1:07.0	All right, folks, welcome to Investing for Beginners podcast. Today we're going to talk about American Express. We have our good friend Brett Schaefer back from Chichat Stocks to talk to us about American Express.
1:14.3	This is a company that Andrew and I both own. Unfortunately, Brett does not currently own it, but it is high on his watch list. And I know it's one of his favorites. So this should be a fun convoy. So Brett, welcome back to the show. Let's talk Amex.
1:27.3	I know it's unfortunate. I haven't
1:28.9	owned this in the last year. It has done quite well, but as someone who maybe is too disciplined
1:34.7	as an investor, it's going to remain on the watch list for the time being. And I guess I'm greedy
1:40.4	and waiting for a better price to pay, which I should say, Andrew and Dave got a couple of
	...

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