starbuckssupersmall.jpg
Does the fate of Starbucks predict the fate of the American economy? That's the argument the Philadelphia Inquirer's Jonathan Last is making :

Plot Starbucks'

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Starbucks as Economic Indicator

starbuckssupersmall.jpg
Does the fate of Starbucks predict the fate of the American economy? That's the argument the Philadelphia Inquirer's Jonathan Last is making:

Plot Starbucks' stock price against the Dow Jones industrial average and you see that over the last four years, Starbucks has anticipated the market at nearly every turn. Starbucks' stock started heading north in 2005, five months before the rest of the market started climbing. Starbucks began its decline in late 2006, just as the outlines of the recession were emerging on the horizon. And Starbucks' stock dropped through the floor nine months before the Lehman Bros. Holdings Inc. crash sent the rest the market tumbling.

How long Starbucks can remain the recipient of luxury coffee-product dollars remains to be seen, what with formidable foes Dunkin Donuts and McDonald's getting into the business. Still, those newcomers appear to be focused mainly on coffee itself, which isn't the main sell. As many have pointed out, Starbucks' biggest business is milkshakes that adults can tell themselves are coffee.

Thus, the local coffee giant may be well-positioned to remain the industry's resented 800-pound gorilla when the economy recovers. Says Last, "It's fun to root against Starbucks in the same way we root against Microsoft Corp. or the Yankees."

Fair enough, we say. But how could anybody root against this?

 
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