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Politics : Ask Michael Burke

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To: Cynic 2005 who wrote (40)	7/29/1996 2:10:00 PM
From: HB	of 132070

Mohan-- I've seen some interviews with fundsters shorting SBUX in Barrons (a few months back)...The reason I haven't done any research to decide whehther to short them yet is that they don't have a shop in Albuquerque (where I live). So I figure their expansion probably hasn't played itself out yet... Once every town with over 100,000 people in the US has a Starbucks, and every town the size of Albuquerque has five, it'll probably be short city!!! (I'm also peeved at SBUX for what appears to be strongarm tactics towards local coffee roasters, and for buying out Coffee Connection, with a subsequent decline in the quality and variety of their offerings. Also... they overroast!!! But I wouldn't short 'em just on that basis. Their brand recognition among people who aren't really coffee snobs, but just think they are, is amazingly strong! The short seller interviewd by Barrons claimed that their ROE sucked, and the thing was already mostly just debt-financed expansion at that point. But they still seem to have room to expand, and name recognition waiting for 'em where they do.) Cheers, Howard

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