I've decided to override my plan to buy SBUX in mid-Aug, cough up the extra money and buy on Monday. Why? This whole thing is reminding me of IBM a few years ago. I sold in the late 80s at 175 when everyone was saying it would hit 200. 175 ended up being the high. The stock dropped. When it hit 40 everyone I knew was saying dump it, it's going to 20. I bought. 40 ended up being the low. IBM is now trading at 240 (ignoring the split last year). Everyone is saying buy. Well, I'm holding. Contrarian? You betcha.
SBUX could go lower but it's trading at a reasonable price based on earnings projections. I see no reason to gamble that it will drop further and potentially miss a buying opportunity. Since I;m dollar cost averaging on this stock, I figure I can't lose.
I know I can't please everyone but I hope this meets the relevancy criteria of most of you.
I don't have any figures to back me up, but I don't think that if/when the recession hits, SBUX will be affected that much. I arrive at this conclusion based on a couple of things: 1) Caffeine is addicting....if you need good coffee (ie SBUX), you'll continue to buy regardless of the price. 2) It's a social thing too, and as someone else pointed out, it's a very cheap evening for first dates and old friends. 3) When movie ticket prices went skyrocketing, people said they wouldn't go to the movies. Still looks like the studios are bringing in the bucks, especially in the international markets. HMMM, just like SBUX reaching out to China, etc. 4) OK, so you don't want to pay the cost of a movie ticket, you can rent the video. Well, if you don't want to buy a latte in the shop, you can buy the beans from SBUX or your local grocery store and make yourself a cup at home. The SBUX shops I have visited in Los Angeles County and Ventura County are always nice, clean places with friendly folks at the counter!!!
Bought SBUX on Fri. and feeling pretty good about it. I've been watching the stock and was lucky to get in on the dip. My opinion, Starbucks is a well run company with no other Nat'l. competitor. Alot of local java joints, but I'd rather have Starbucks anyday. Our stores here in the Southeast are clean and well run, always a line. I know alot of people that buy their beans there as well as their daily coffee. I'm also seeing S.B. ice cream in the local grocery stores. Looks like they have alot of opportunities to start branching out into other retail ventures as well. Happy to be aboard.
Oh, about that Latte, have you ever made one at home that tasted as good as the one handed to you over the counter?