Starbucks and Stock Prices
Edmond G. Eberts
R Capital Formation Strategists Inc.
rapport capital formation strategists inc.
703, 141 Adelaide Street West
Toronto, Ontario M5H 3L5
Toll free: 800-363-8134
The stock market reflects the opinions of millions upon millions of investors. It has a very
long memory and seldom lets a crook off the hook. Without the knowledge of someone
who has seen it all before, the mistakes of the past are bound to be repeated in the future,
at great expense to the CEO at the podium and the investors in the audience. Whereas
opinion polls may direct democracies and are often used to determine economic policy,
they can only tell politicians what voters thought in the past and what turns them on today.
They are not able to forecast the future. Capital markets, on the other hand, can and do. It
is crucial senior executives make the right moves, or risk being put in the penalty box until
long after the game is over.
understanding what others do
The secret to Starbucks’ incredible success is how this marketing machine conjures and sells
café romance to ever-growing hordes of people around the world, new disciples signing up
every day of the year. Even so, its messianic leader is struggling to hold on to the company’s
soul, giving customers an authentic experience, an advantage none of its competitors have
so far been able to duplicate. Imagine what would happen to your outfit’s stock price if you
could convince the shareholders to become repeat buyers as time goes on, rather than cut
and run whenever there is but a minor hiccup in quarterly earnings? Better still, think
about how wealthy everyone would become if you were to find a way to lure investors into
paying a substantial premium, just as Starbucks does for a Decaf Triple Grande Vanilla
Non-fat with Whip Latte at ., compared to Tim Hortons’ best at . for a large cup.
But, before you can leave such a great taste in their mouths