JBL: The Case for American Express

During a Fox News appearance two and a half years ago to promote my book Have More Money Now, I was pitted against a very pretty bank analyst, Meredith Whitney.

It turned out she was a beautiful pit bull, and she attacked me for recommending Citigroup (C).

"How can you pick a financial in a rising rate environment?" she asked defiantly.

I looked back at her, tried to make my case, and realized deep down I really just wanted to choke her.

Well, Citigroup turned out to be a pretty good pick, and then I really showed that analyst (without resorting to violence) -- I moved to New York and married her. We still argue over stocks, but now over wine and a nice dinner.

Today, I have another pick in a rising rate environment, and yes, it is a financial: American Express (AXP).

Sunshine in the Forecast

The latest inflation data showed that inflation, minus energy and food, was tame. So I guess as long as you don't eat or drive you wouldn't feel the effect of milk and gas prices going through the roof.

Rightly or not, I believe the Federal Reserve is just about done raising rates (Alan Greenspan must have his chauffeur buy his groceries and fill his car) and think American Express is a buy right here. In fact, I will go on record as to say this is the very best of the Dow stocks.

American Express credit cards cater to the wealthy, who are not affected by gas prices. The company is still going after the middle to higher-end markets, which are where the most enviable consumer and corporate accounts are. American Express already has 40% of the lucrative corporate expense market. With 78% of that market still operating with cash, check or personal spending, there is a lot of room to grow.

To view JBL's video take on American Express, click here.