I want to try something different today. I just downloaded this great iPhone app called @partiko, which is just about the best Steemit client that I’ve ever used. In fact, I liked it so much that I delegated some STEEM POWER to it a couple days ago. And I am, in general, a pretty cheap guy. So it must be a damn good app for this skinflint to support it. I like it so much that I’m even writing about it in a public post!
Oh man, so meta...
So what’s so different about this post? It’s the fact that I’m writing it entirely on my phone. 😱 I’m sure any millenials reading this post are gonna be like, “Yeah, whatevs, big deal, I do everything on my phone.” But just know that the @shanghaipreneur is an old man. Doing anything on my phone is revolutionary!
But let’s get back to the theme I’ve been harping on the past couple days: Risk and long-term investment.
If you’re new to this blog, you can check out those posts here:
That’s kind of my thing. And, like pretty much everyone, it’s something I am trying to get better at understanding and doing the right thing for my portfolio no matter where we are at in the market cycle.
Which, finally, brings me to today’s topic:
Starbucks
How can Starbucks help you better understand long-term investment?
Well, it’s simple really. As recently as June, Starbucks (SBUX) was at multi-year lows. It traded at $47.37 per stub the week of June 25. Even in China, where I live, analysts were talking up the threat of new arrivals on the coffee scene, Luckin Coffee and CoffeeBox. Armed to the brim with gallons of piping hot VC money, the argument went, these two new upstarts were primed to take market share away from the Old Green Mermaid via heavy discounting, free delivery, and savvy social media marketing. China is massively important to Starbucks’ share price as it is one of the key means of volume growth for the brand.
And guess what? Just over 4 months later, the stock traded at an all-time high (ATH), having reached $68.98 per share in early November.
What did Starbucks do different? Nothing much, really. They tuned out the noise and just kept executing on their plan. Open up a couple Starbucks per day in China. Copy the good parts of your competitors and leave out the bad. They reached a delivery deal with the best food delivery app in China, ele.me, and basically just kept on grindin’.
That’s what you have to do, both as an entrepreneur and an investor.
Keep your head down and stick to the plan.
After all, you must have had a good reason for that plan in the first place. But as my daughter often says while stamping her feet when she can’t figure out how to do something, “It’s soooo hard. I don’t wanna!”
Believe me I know, it’s not easy. But we’ve got to keep our composure. Not get too high, not get too low. Think critically and rationally, NOT emotionally.
Every year, I contribute the max to my daughter’s Coverdell Savings Account. It’s a great little way for Americans to save for college. I buy one stock a year of a brand I think she will look back on, whenever she’s old enough, and approve of. Something she can look back on and say, “My daddy was SO smart when he bought that stock for me!”
When she was born, I bought her $2000 worth of Starbucks. So I’ve ridden the emotional rollercoaster of the chart above. There’s self-doubt, self-loathing, all the nasty little psychological quirks that come up when a thing you’ve researched well enough to invest in just doesn’t perform the way you want it to. Ugh, it’s horrible!
But it happens. And no matter what happens, it’s probably gonna keep happening.
So get used to it.
Sometimes you win and sometimes you lose.
But if you lose smart, then hopefully, over time, you’ll start winning more often than losing.
And when that starts happening, you deserve a treat! Go buy yourself a patented Starbucks extra-exorbitant extra-fabulous Christmas season drink like this Snowy Cheese Flavored Latte.
Have a great day everyone!
PEACE ✌🏼
