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Not Everything At Starbucks Is Savory

George Acs profile picture
George Acs

From the title, you may probably believe that I don't like Starbucks (NASDAQ:SBUX).

I don't, but I'm reminded of the very meaningful expression "hate the sin and not the sinner."

I've only used that expression one other time in my life, as my people's piety stopped evolving more than two millennia ago and failed to get that memo. But a few years ago we were hosting an inner city child in our home. One night he found some spray paint and adorned the side of our home with some 5th grade literary prose that extolled his prowess with the opposite sex.

He understood the expression, as I used it to express my dissatisfaction.

And then there's Starbucks.

I don't like their coffee. It makes my heart race and makes me even more annoying than I usually am, especially in social situations. My wife is a self-professed coffee snob and until she got me the gift she always wanted for my birthday, a Nespresso coffee machine, we always had either Starbucks or Peet's (PEET) in the house, which I occasionally would adulterate with Chock Full of Nuts, to her total cluelessness.

Howard Schultz, CEO/chairman is one of only a handful of those that can boast of restoring the magic to a company that he helped to found, subsequently stepped down as CEO and then returned to resolve crises. Had he known of my adultery, I have no doubt that litigation would have been in my past. If he reads Seeking Alpha, it may yet be in my future.

Ted Waite? Remember him from Gateway Computer? Jerry Yang of Yahoo! (YHOO). Michael Dell? It's hard to go back home, but Steve Jobs and Howard Shultz were able to pull it off, whereas most cannot.

And certainly, if you listened to Howard Schultz's defense

This article was written by

George Acs profile picture
I am a simple individual investor who believes that the playing field is level, but may require active management of one's holdings. I've devised a series of steps that constitute a highly defined covered option strategy that most anyone can follow and that I've described in Option to Profit (2011). Having retired from a career in Pediatric Dentistry, approximately 10 years ahead of schedule, after spending the previous 10 years working just 2 1/2 days each week, I now spend my time trading.For almost 5 years I alerted others of trading opportunities in large cap positions through the Option to Profit subscription service, a premium subscription service that provided actionable Trading Alerts via text messaging or e-mail at my old site www.optiontoprofit.com. As of January 2, 2017, the site  and the name "Option to Profit" are no longer mine. as I've again joined the dark side and taken the easy money. But I've returned to my blogging roots on January 2, 2017 by resurrecting the old TheAcsMan.com ad supported web site, open to all.That, too, ended and the new, subscriber based LEAPtoProfit.com which launched July 2018 and is geared to the less active trader who is either shifting into a "buy and hold" strategy, as am I in this next to final stage of my investing career or seeks to milk an existing "buy and hold" portfolio.Current;y. the LEAPtoProfit p[ortfolio is fully invested and the paywall has been removed until December 2019 when I expect an infusion of cash from position assignments.Ultimately, I hope to make my stock portfolio improve the quality of my life. Whatever stage of life you are in, you can make your stocks improve that quality by putting them to work for you and perhaps LEAPtoProfit can be part of that process.

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Comments (33)

George Acs profile picture
On a positive note, he does look happy and the baby blue cinder block is a nice complement to the alcohol blush
QuantRec profile picture
QuantRec profile picture

remurraymd on here

AKA Robin Murray: doctor robin murray excluded from Alabama Medicaid for fraud
mugshot listed online for felony fleeing scene of a crime.

All he is saying here is bogus and BS!

See the link below for more documentation:

QuantRec profile picture
LOL George just warning any one who may not know.

There are no background checks on this site!
George Acs profile picture
'There are no background checks on this site! "

And I know that I speak for us all, when I say that I'm especially grateful for that
QuantRec profile picture
remurraymd on here AKA Robin Murray: doctor excluded from Alabama Medicaid for fraud and mugshot listed online for felony fleeing scene of a crime:
George Acs profile picture
Not certain, but the ability to engage in potentially felonious actions may be precisely the bona fides that are required by someone seeking to scale great heights in personal finance
blunderbuss profile picture
>>>the ability to engage in potentially felonious actions may be precisely the bona fides that are required ... to scale great heights in personal finance >>>

“Behind every great fortune there is a crime.”
-- Honore de Balzac

Source: http://bit.ly/SpOp9w
George Acs profile picture
Apparently a long honored tradition
George Acs profile picture
From my perspective, companies should stop giving guidance and stop providing reasons for institutional invetsors to panic in one direction or another. AS they do, they take "the sheep" for a 3 minute mile run, when all they want or need is a leisurely stroll.

Earnings season is always a challenge and, maybe it's just a sign of getting older, but those three months between earnings seem to pass faster and faster.

The funny thing is that I like market volatility, but I don't like individual stock volatility. I suppose I was always a better student of macroeconomiuc theory than microeconomics. The kind of movement that you highlighted in URBN makes it unnecessarily challenging.
George, I agree about the sheep. The comment should have read "is rife with sheep". I can see why lawyers need to be so exacting in their speech, i.e. so wordy, verbose. lol.
The problem we have today in the market is one of excess. Today URBN beat on both the top and bottom lines and moved up almost $6 at open. What--20%. Please! Most of the companies that beat expectations beat the bottom line only this past or passing earnings season.

In other words revenue or sales just didn't make the grade. That isn't as easy to manipulate as earnings. It is getting to the point where all the cost cutting and efficiencies have been realized. The reactions to the winners is over the top.
I have been trading stocks for my own account for over 20 years and I am at the point where I feel the need to sell stocks prior to earnings season or rather the earnings date of the stocks that I own. The fact that I am a trader and work online at a discount brokerage keeps the cost low but it is still a pain.

Yes, I am emotional about money. I do not have nearly enough. Being on Social Security and all. You know those darn entitlements that I spent a lifetime buying/paying for.
George Acs profile picture
If you dissect out every fourth letter of each article, that strategy is plainly spelled out. These days so few people take the extra time. But the saving grace is that there's nothing better than post-fuss romance.

Now that you've figured out the pattern, I'm going to have to rehire my cryptographer before the next article.
George, I think some of our colleagues get so romanced or fussed by your writing flourishes and individual stock picks they miss your broader strategy: searching the market for interesting name recognition stocks with weekly options and tight bid/ask spreads so as to maximize your income stream.

If your on-line broker gets a few extra sheckles out of that I see no crime. And if the game is more interesting and lucrative using provocative individual stocks instead of high volume ETF's I certainly cast no stones!
George Acs profile picture
As I said, "business is business and friendship is friendship." I agree, you shouldn't let subjective factors interfere with a singular objective, which is making money.

I'm not certain I get your allusion, though. Driven by sheep? If the market is driven by sheep they wouldn't maintain the characteristic of being sheep, who follow and never lead. SOmetimes it takes just a singular voice in the crowd to say "People, enough already" so that more objective factors can get back to determining a stock's price. The emotion and hyperbole was overdone
Whether one likes the product of SBUX to me is totally immaterial. This is all about making money. I sold the stock when it dropped under $58. I just bought it again in the $43's. Thank you to Square and CS for the dollar jump for each in the stock price. This stock is definitely not worth the price being paid for it, but people are paying it. It will likely go back into the 50's.
I have never and will never pay the price of $5 for a cup of coffee. I buy a 2 lb. can for $8 and have well over a hundred cups of coffee from the one can. So in the end it is all about how much extra money people have in their pocket. Apparently many people have way too much.
One post script. The market is driven by sheep. If you doubt it turn your attention to FB today. One off the wall recommendation and the broken stock jumps a dollar. Prior to that rec. it was heading to a new low.
zipit123 profile picture
A cup of coffe at SBUX is currently 1.69 in CA. Comfortable surroundings, free Wifi, pleasant people to be around.
You really need to get out more.
George Acs profile picture
That's about 4% below the national mean for the smallest sized cup of coffee at Starbucks. However, since no one walks in CA (at least not in LA), and gas is pushing $5/gallon, more than 4% above national mean and you have to engage with snarly people at the gas station , while in roaming mode and in traffic, it may be a push.

I prefer my La-Z-Boy and Nespresso machine
TwistTie profile picture
ronster9 profile picture
In evaluating Starbucks I would suggest your look at this metric:
what is their employee (they call employees 'partners') turnover rate? You'll discover that they pay part-time employees (those who work at least 20 hours per week) health care benefits - which is one reason their turnover rate is much lower than other retailers -which, in turn, results in lower HR costs, better trained and capable employees and a better in-store experience for customers. Now, there's a real triple threat! You'll also discover that they've been one of Fortune's most admired companies to work for, for many years running.
George Acs profile picture
I need no convincing regarding the company, nor the components that accentuate revenues and reduce costs. Undoubtedly, turnover is a menace to many companies, yet they fail to appreciate the tremendous costs associated with low salaries or poor working conditions.

It's still the inner Schultz in his outer activities that makes me have thoughts, but not about the stock.
remurraymd profile picture
We think high PE stock experiencing growth issues and have a few puts.Think it heads down before up buying a few more puts on rallies.
Like MCD kind of topping out in a dead cat bounce currently er think.
For us take the B out of $SBUX you have SUX.
mjk0259 profile picture
Only two weeks ago you said you were selling puts. Naturally you bought it at the twenty year low like all stocks.

"SBUX) a great company reports of demise are greatly
exaggerated if you look at chart simply pulling back
to Fibonacci support will be a buy lower after a few
dowgrades. Commands a better PE as a grower.
We bought @$8 in 2009 so a "5-bagger" (500%) since then.
That is what you call growth!
We sell cash secure puts on pullbacks 10% under the
money 3 mos our for 3-5% profits on pullbacks get
cash or get long and get paid 9-15% while we wait.
Covered call selling above if you do not mind getting
you stock "called" away also an option.We did this
plus a few 50 strike Aug put buys protected us.
We are not selling; 'Let your winners run' Peter Lynch"
George Acs profile picture
On a positive note remurraymd did go softly on the rhetoric with this comment and was a bit more respectful og the English language, other than the "er think"
I wish the author were less in the habit of beating around the bush regarding Schultz's behavior and more in the habit of relating material knowledge that would be useful to an investor.

Disclosure: I am long SBUX, and I like their product (though I prefer to frequent the mom & pop shops when I get to know them in an area). I like the company that Schultz has built, but I dislike his personal politics.
George Acs profile picture
Have a cup of coffee. It will relax you and make the beating of the bush go by that much faster.

But to that point, why did you bury your dislike for Schultz's politics? Had I known of your position earlier, I wouldn't have read the rest of your comment.
Mr. Vargas profile picture
Thanks for your disclosure but if you're long GRPN, you have disqualified yourself from any serious consideration or comment.
George Acs profile picture
That's the point of disclosure.

On the one hand you will find people criticize because you don't have skin in the game and then there are those, as yourself who criticize if you do.

However, you haven't asked whether I was long Groupon at the time that Schultz left the Board. Is that not relevant, or do you just look for the opportunity to criticize?

The point is that there was very likely a conflict while he was on the Board, or does that fact escape you? Whether you owned shares of Groupon at that time or were short the position is immaterial. It is the action that is of question and not the fact that the action is questioned.
Tiderip profile picture
Would sure like to be your broker. Having all that stock called away.
George Acs profile picture
I don't mind paying minimal fees (especially compared to the bad old days) when it means only a penny or two per share to squeeze out much more in profits. Think volume and you won't get bogged down with minutiae
tikigod18 profile picture
Long GRPN??? You need SBUX to keep you from bankruptcy!
George Acs profile picture
Well, it is also a matter of proportion. Being long in a particular stock, whether a big winner or big loser (on paper) is only as relevant as its overall representation in your portfolio.

Of course, then there's also the matter of price entry points. Not everyone entered Groupon at 26 or Facebook at 38, nor SBUX at 32
blunderbuss profile picture
Good evening from Tokyo, Mr. Acs.

I haven't read all of your articles, but have you written on the subject of Starbucks' attempts to infringe on GMCR's market share by making their own home brewing machine? It seems that (SBUX) came out with a machine called "Vista" a few years ago, or tried to, and is apparently inflicting a device called "Verismo" on us later this year.
George Acs profile picture
I have mentioned in the past that Starbucks has been less than a reliable partner with regard to the relationship with GMCR.
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