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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Chisholm who wrote (5036)	9/21/1998 8:15:00 AM
From: Wallace Rivers	Respond to of 78825

Dan; I think your topic (SBUX) merits discussion on the short side, just as much as any discussion of stocks value investors find attractive to purchase. And, come to think of it, way back when I was a broker, I scalped a point or two on a SBUX short. FWIW, my girlfriend and I were switching planes in Charlotte one day a little less than a year ago. She loves coffee, so she went to the Starbucks there. She was there a while (lines and slow service), she came back with her java, and I asked her what she got, she said she didn't know! She had ordered one thing, but they kind of just gave her whatever they could make most conveniently to keep things going. So, her $3.50 got her, something coffee based!

To: Daniel Chisholm who wrote (5036)	9/21/1998 8:52:00 AM
From: James Clarke	Respond to of 78825

Buffett would ask two questions about Starbucks. 1) Can I be certain Starbucks will have the same dominant market position in 10 years that it does today? 2) Can I be certain its product will have the same market position in 10 years that it does today? I think you would be hard pressed to answer either of these questions in the affirmative. With Coke, Gillette or Wrigley you can. Valuation follows from that. If the business is low margin and low ROE now, it ain't going to get better, and is likely to get much worse. Is gourmet coffee a fad that will go the way of, what from the 80s - cocaine for example? Also, don't forget that Starbucks is in perhaps the worst business known to man. McDonalds is the only one in the restaurant business that has made money consistently over time. Remember Boston Chicken. JJC