sundrenched

Is Starbucks a Bargain? It Almost Goes Without Saying

Something below the surface here that I don't like (but it's your money!) is a subjective approach to stock selection. I'm very wary of "story stocks". There's several thousand stocks traded on exchanges in the US alone, tens of thousands worldwide. Your goal as an investor should be to put your money to work in the 15 or so that have the best prospects. The human mind is utterly and completely unequal to the task of comparing these thousand of stocks using a subjective approach. So first order of the day should always be to run a screen with certain criteria (deep value with strong balance sheet, for instance), which narrows it down to perhaps 20-30 stocks, and OK, from there you can start to look at the story.

But just to say because you like Starbucks, you also want to own the shares in the company.... That gets us exactly to the reason why large cap growth companies as a class underperform the market: they're glamourous and make the owner feel good, and people overpay.

Like people have said before, you may love the stock, but the stock doesn't know you!