Banks and payment systems are a prime target for "hybrid war" attacks. That poses a problem in Sweden, where 90% of transactions are cashless https://t.co/8RiVETjwKs ...

Core Insights - Warren Buffett's leadership at Berkshire Hathaway has resulted in significant returns for shareholders through effective capital allocation [1] - Mastercard has shown exceptional performance with a total return of 12,880% since its IPO in May 2006, despite only representing 0.4% of Berkshire's portfolio [2] - The company benefits from a secular growth trend as cashless transactions increase, with projections indicating that 52% of Americans will not use cash weekly by 2025 [3][4] Business Quality - Mastercard is considered a high-quality business due to its strong economic moat, characterized by a network effect that enhances its competitive advantage [5] - The company operates with 3.2 billion active cards accepted at 150 million merchants globally, creating a powerful two-sided platform [6] - Mastercard's business model allows it to benefit from inflation, as it earns a small fee on each transaction, leading to increased revenue during inflationary periods [4][5] Financial Performance - Over the past decade, Mastercard's revenue has grown at a compound annual growth rate of 11.6%, driven by the rise in cashless transactions [8] - The company's profitability is notable, with a net income margin of 46% for every dollar of revenue reported in 2024, indicating a highly lucrative business model [8] - Operating a vast payments platform has resulted in substantial profits, as the existing technological infrastructure supports high transaction volumes [9] Valuation Concerns - Despite its historical success, Mastercard's stock has underperformed the S&P 500 over the past five years, with a total return of 119% [11] - The current price-to-earnings ratio of 40 is significantly higher than the S&P 500's ratio of 28, raising concerns about the stock's valuation and future market-beating potential [12] - While Mastercard is recognized as an outstanding business, the current valuation suggests it may not be an attractive investment opportunity at this time [12]