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Today's SBUX announcement says they would like to
1000 new stores in Asia by 2003. There are other
SBUX is doing to grow their revenue. Also, their
revenue growth rate is still in mid 20's. No
how you look at it, SBUX is a good long play.
Since your SBUX is in 401k which you cannot realize
you are 59 1/2, holding on to SBUX appears to be a
move unless you have other money play which you can
the SBUX loss.
My experience says, if you are
patient with good
company stocks, they will reward you
in the long run.
SBUX currently owns the coffee
retail market and won't
go away any time soon. Their
revenue growth rate is
pessimistic estimate, SBUX will hit 25 - 30 in the
- 18 months.
My optimistic estimate, SBUX
will hit 25 - 30 in the next
can't see SBUX staying near the teens unless the
market crashes - still can happen with Y2k panic selling
SBUX can only be considered a
good investment if it is fairly priced, and if its net
earnings continue to expand. While its chances may be
better than many stocks, nothing is
Recently, one of the posters on this board compared
to 7-11. While 7-11 is still in business and
still has great name recognition, its business model
has been copied by scores of competitors, and it is
no longer the powerhouse it once was. Starbucks is
vulnerable in that same way; it cannot be safely assumed
that they will freely continue to sell coffee at their
high volumes and high prices without a high-profile
competitor emerging to check and balance their growth plans.
Einstein Bagels, a company that produces an outstanding
product, has thus far failed to succeed in its attempt to
become the next big coffee thing, but given the natural
law of the free market,
somebody will eventually
be successful in imitating Starbucks on a large
On another subject, I don't believe that negative or
positive postings have a great impact on stock prices.
While they may serve to sway the undecided, I believe
that the mutual fund folks and the seasoned investors
will stick with earnings reports and the behavior of
the corporation when making buy/sell decisions.
Trivia question for all: Name the restaurant which owns
a huge stake in Einstein Bagels...
> somebody will eventually
be successful in imitating Starbucks on a large
Very true just like all other buisnesses. That is why
banking on SBUX's expansion abroad. Anyway,
as a long,
I hate to admit but SBUX - like all
publically trading companies -
has its risks.
Note that even after a company is copied, sometimes
both do well depending on how (un)saturated
the market is.
I can think of only one example on
top of my head: CostCo
and Price Club which ended
up merging together later on.
I agree if someone comes along and immitates the
concept, then it will cut into their rich profit margin.
However with a business like this it will take years for
someone to build the chain and you will have plenty of
warning. This is not a high tech software or internet
business where two guys can come up with the next best
product in their garage on a shoe string budget out of
nowhere and challenge the establishemnt. This business
requires time and capital.
Of course there are many
coffee chains that have tried to become like sbux but
failed. Most of them have a very limited regional
presence. If you find another chain with similar quality
and # stores execeeding 500 then it's time to worry.
The very fact that sbux has expanded so fast is a
testimony to a great core management that can take the
Of course they have experienced
growing pain. I have been to many stores where the trash
cans stay full for hours. Where there is a teenage
punk in charge and tried to be a wise-ass with
customers.... But in majority of cases they have done a good
job managing their growth.
I don't understand
their business strategy and I am personally against
internet investment. Maybe the market reaction will be a
wake up call to stop f**king around with the
investor's money and stick to the core business. But I could
be wrong. Someone suggested to me to invest in AMZN
when it was $5 and I laughed!
In conclusion, I
think the company has a great future. The stock will be
in this trading range of $20-21 until the Fed news
next week. This price as in many other stocks has
factored in 0.25 %increase in the interest rate. If the
Fed raises the rate by 0.5% then we will probably see
a $17-18 trading range. And then it won't take long
before the big money does another rotation and lands on
SBUX. Good luck to all.
1-sbux model presents very little 'barrier to
entry'. it is a very low tech. bus. with little expertise
needed except funding. i am not referring to opening an
int'l chain but small private outfits. someone here
once noted that the most popular hangouts in their
city have become private coffee shops. i can add that
i have onlt been to one sbux is my city that had
any room, feel or ambience...there are 800,000 in my
city. Second Cup has beautiful stores and they are
always changing the look of new locations to fit the
asia and europe are potential at this
time. again, there will be much greater competition for
these expansions than there were in US. sbux is on top
and when you are on top you get recognized and gunned
for. you cannot compare this thing to macdonalds, 7-11
or anything else. it is unique.
lower then buy more? Remember I have $2500 more in invet in my market account. I would like to see $200-$500 return every six months, but I could be more risky is this the right time for risk?
All I am suggesting is, if you bought SBUX at 25
and don't mind 6 month wait for the stock
to come back,
play it long. What I hate to see
people do is take
the loss now and jump right back
into another stock
which may not be a good
Of course, if you can be sure you can take the
and make money in other stocks, it's your
What you do with extra money you have now is up to
because as most of you should know, no one can
be sure about any particular stock or overall stock
market trend in short term.
If I were you, I will
put the money in the market
leading companies and
get ready to play long.
My 2 cents.