STIMULUS PLAN EDITION
20 FEBRUARY 2009
CONSUMER CUTBACKS CONTINUE
Gazette Reporter Forced to Embrace Instant Coffee
Reporters are known far and wide for their forthright and keenly observant ways and your Gazette reporter assures you that she is no different. As her recent travels have taken her far and wide, from the frozen prairie of our country's mid-section to the New York Harbor, your intrepid reporter would be remiss should she fail to report that Midwesterners and New Englanders alike are tightening the belts around their own mid-sections. Indeed, your intrepid reporter is loathe to admit that, in light of the recent salary cap thrust upon her, her own daily visits to her local Starbucks had all but come to a screeching halt. That is, until the company announced its foray into the world of - what's this? Instant coffee?
Shocking as it may be, your diligent reporter has confirmed through one of her most trusted and anonymous of sources that the high-brow, Seattle-based, crème brule of coffee houses has been sucker-punched right into the world of instant gratification (she calls 'em as she sees 'em). Despite a host of misgivings, your reporter gave it a try and, to her great amazement, instantaneously became a convert. Perhaps CEO Howard Schultz's strategy to capture a sip -- or even a gulp -- of this $17 billion market is worth a second, uh, taste.
Your faithful reporter had been trying to keep news of her clandestine activities under wraps as certainly her ancestors - the most patriotic individuals best known for tossing none-other-than tea of British East India pedigree into the Boston Harbor - would consider her nothing less than a Benedict Arnold. Yet, in a moment of great irony, your guileless reporter confirms that a disturbance worthy of a low registration on the Richter scale did indeed strike Harvard Square this very morning. The rumble felt was not an earthquake, but rather, this reporter is chagrinned to admit, Boston Tea Party participants rolling over in their graves.
On to today's headlines...
CASH FLOW UP, DEBT DOWN, YET...
INVESTORS WONDER WHAT'S BREWING AT STARBUCKS
Despite the rumor of draconian cutbacks in the typical American budget, coffee lovers remain inextricably drawn to Starbucks coffee houses. "People don't just go to Starbucks for coffee," Shareholder Lynn Brown notes on the Starbucks StockCentral forum. "I hit all four Starbuck stores in my community at least once a week and they are always a mob scene. Doesn't seem to have slowed down. Still seems to be the place to meet."
Still, Lynn questions whether her eyes are deceiving her. "Cash flow is up and debt down, but I thought the balance sheet was a little frightening with liabilities higher than assets," she writes. "Any thoughts about balance sheets?"
While she awaits the insight and depth that only StockCentral members can offer, Lynn is off to the company's March 18 annual shareholders meeting. "I am hanging in there with my shares until at least after the annual meeting. I can't wait to hear what Howard has to say, in person." Be sure to share your own thoughts on the Starbucks forum as the StockCentral community eagerly anticipates Lynn's West Coast return.
A GOOD GLASS OF MERLOT CAN GO A LONG WAY
Saul Seinberg Unravels the Mystery of Options
If you have long pondered the ins and outs of options, now's your chance to learn everything you ever wanted to know. Join in on the ongoing workshop, Using Options for Conservative Investors, taught by Saul Seinberg in the Stock Central Community Forum. Simply check the "Email me when someone posts to this forum" box on the top of the page and walah! You'll receive workshop posts in your very own e-mail box.
What is an option? An option is a contract to buy or to sell a specific financial product officially known as the option's underlying instrument or underlying interest. Saul's workshop demystifies a fast-growing but crucial corner of the capital markets. Topics include most aspects of beginner to intermediate levels of using options, including:
- Discover the gentle, useful side of options to generate income and reduce risk.
- Learn ways to generate income by writing covered calls.
- Learn how to identify and avoid common mistakes that option newbies make.
- Explore some option strategies that rely in part on fundamental and/or technical analysis.
- Learn about index and Exchange Traded Fund (ETF) options along with the prudent use of Long-Term Equity Anticipation Securities (LEAPs).
This workshop will continue until all participants are satisfied they have learned what they wanted to know about the types of options Saul plans to discuss. There is no fee to read the workshop messages, but you must be a StockCentral member to participate in the discussion. Not a member? Start your StockCentral free trial now!
Although complex option topics are beyond the scope of this workshop, Saul encourages you to join him at InvestEd 2009 in Salt Lake City, August 7- 9. Meet Saul face-to-face in the relaxing Cyber Café during the evening to explore complex option strategies such as spreads or straddles or the exotics such as butterfly or condor option combinations. Hint: It is amazing how a glass of good Merlot makes Saul eager to talk about options!
TODAY'S ENTIRELY RELEVANT QUOTATION
It may be "necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring. I understand that once in a hundred years this is what you do."
-Former Federal Reserve Chairman Alan Greenspan