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Starbucks
In Reply To:
Is it Time for Me to Sell?

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By MESuther13
April 17, 2003

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"Is it time for me to take the money and run?"

Well that is really your decision to make and none of us can make it for you. How much did you expect to make on it? Did you want to make a quick buck? Was 25% your goal? Do you have something else you'd rather put the money into? If so, sell it.

Or were you planning on investing in Starbucks for a long time? In the big picture 25% isn't very much. It's pretty good the way the market has been the last couple years, but what will it be worth in say 5-10 years?

Like I said, even in a market like this 25% is nothing. I bought a stock last year called Corinthian Colleges (COCO). It's been hovering around even the whole time I've owned it. It's finally up 12% in just the last few weeks though. I'm not going to sell it just because it hits 25% though. I think it's got a lot more in it than 25%. In fact, anyone lucky enough (why is it never me?) to have bought it in April 2001 is up over 800%. This is a good example of 25% not being a whole lot and time being the difference.

An example of a stock I bought thinking more short term was Amazon. I bought it awhile back for just over $6 and sold it last year for just over $20. That was a nice profit where I did "take the money and run." So far it has only gone higher and I could have held it longer for a better profit. However when I sold it I had achieved more than I had even planned on, so it is still a success in my mind. The stock reached the point where I was not comfortable holding it anymore because I was not confident in it. I'd bought it as more of a short term "educated bet" than a sound investment. I used that money to purchase Corinthian Colleges and more Starbucks, so I had a "better" place to put my money.

If you want my opinion of Starbucks as an investment I'll give it to you. I only own 189 shares of it and I wish I owned a whole LOT more. My shares are up 28.8% currently and I have absolutely NO intention of selling any of it anytime soon. It's a little richly valued for me right now so I have not been buying anymore. I was buying $200 worth a month when it was under $20. I hope I won't regret the decision to not buy it over $20 later on. I honestly can't see it dropping below that point anymore. What I need to do is come up with a new valuation and price I'm willing to pay for it. I've been thinking about raising the bar to $24 or $25 a share. At any rate I am 33 years old and, barring some catastrophe, plan on holding all the Starbucks I buy for 20 years or more. That's how I feel about it.

Remember, it's your money and only you know what you're willing to risk, what your goals are, and how long you're willing to wait to reach them. Good luck with your decision.

MESuther13


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