Chapter 2 [My first time buying Starbucks stock]

Source: https://www.facebook.com/794648900700097/posts/2124995264332114/

[The Origin and Today of James] Chapter 2 - My first time buying Starbucks stock (01/21/2022)

The first time I bought Starbucks stock, in the fall of one year, I returned to Taiwan from a business trip in the United States and stayed at the Huaguo Hotel in Taipei. On a weekend morning, I walked alone on Linsen North Road to find a breakfast restaurant. Autumn is the most comfortable climate in Taiwan. Walking on the streets of Taipei in the early morning is indeed very comfortable. Suddenly I saw a coffee shop at the corner. It was very bright and clean. I walked in. Under the autumn sunshine, I felt very warm. I opened the large French door (there were very few restaurants in Taiwan at that time). (It has such a grand glass window and a large glass door) I entered this coffee shop. There was no one there, but I was very moved by the atmosphere. It was clean and bright, and the service at the counter was first-rate. I was deeply impressed. I don’t remember much about what I ordered. I only remember that it seemed to be a bagel, cheese and coffee. At that time, I was moved by the atmosphere of this store. Later I saw a book on the checkout counter, which was an autobiography by the owner of Starbucks (Howard Schultz). I discovered that this is an American chain store. I have lived in the United States for so many years, but I have never found a coffee shop like this. Maybe I didn’t have the habit of drinking coffee at that time, and I lived a frugal life, and I was not used to high-end coffee consumption.

Before this, I didn't read many investment books, but I read Peter Lin's stock selection strategy. At that time, I learned to choose good companies from around me. I discovered that Starbucks actually opened its first store in Taiwan. I recalled that when I was in college, McDonald's opened its first store on Minsheng East Road. My classmates and I lined up at the door early in the morning before McDonald's opened to eat McDonald's burgers from the first McDonald's store in Taiwan. I remembered that if I had known how to invest and invested in McDonald's, I would be very, very rich by now. So when I saw that Starbucks opened its first store in Taiwan, I knew it was a good investment. In addition, I had read Peter Lin's "Stock Selection Strategy" book, which recommended that ordinary investors invest in companies that they could personally experience, so I bought an autobiography by the owner of Starbucks (Howard Schultz). After reading it, the stock price rose from $6 to $9. At that time, I started buying a large number of Starbucks shares from $9 regardless of anything.

I was very impressed. I would buy as long as I had money, and I would buy again when the market fell. At that time, I still had financing in my account, so I bought the financing funds (Buying Power). At that time, Starbucks had 2,000 branches in the United States. If I owned two thousandths of it, it would be equivalent to owning four Starbucks stores.

The feeling of investing in Starbucks is that I am the owner of four Starbucks stores. Every time I walk into Starbucks and see the long queues in the store, I feel that my company is very profitable. I am also very concerned about the service attitude of Starbucks clerks, and the service provided by Starbucks at that time was such that I could get to know every regular customer. Every time I enter Starbucks, the clerk knows my name and knows what coffee I order every day. Sometimes he knows that I want Venti coffee when I am still in line. When the clerk sees me in line, he calls out James, good morning! and pours the coffee immediately. At this time, I used whether Starbucks employees recognized me as an indicator to judge the company (for a period of time after that, I found that employees changed very frequently. These employees no longer knew me very well, and they often made small mistakes, so I felt that there was something wrong with Starbucks. It turned out to be true. The boss stepped down and left the CEO position for a period of time, and the stock price also fell. In order to perform well, the new CEO expanded a large number of stores quickly, resulting in insufficient employee training and poor service. Of course, he later came back when he saw that the situation was not right.

) For a long time, I have held Starbucks stocks, and the gifts I gave to friends were all Starbucks products. I felt like I owned the company 100%. This feeling and investment mentality are really good. As Buffett said, investing is to imagine that you 100% own the company. This is the most important psychological factor in investment. When you are moved by the investment target, and you have the passion to hold the entire company 100% for a lifetime, this is the key to long-term investment profits.

When I went through 30 years of investment experience and learning, I came full circle, and ended up returning to the simplest investment method I had (definitely not technical analysis, reading financial reports in the news, listening to analysts' reports, etc..., any research you spend on these will prove to be invalid and cannot compare with the performance of the market). So what I want to share with you here is that after decades of hard work and research, I have returned to the original point. Only caring about the company's business model and the company's value is the true meaning of investment. The final advice to all investors is: "Buy the U.S. market index, invest for the long term, and you will be rich if you don't sell." Life is really interesting. You have to search for it through hundreds of thousands of people. Suddenly looking back, that person was there, in a dimly lit place. 』

Even during the 2000-year-old dot-com bubble, because I continued to invest mostly in Starbucks, Starbucks' performance at that time was not affected by the dot-com bubble. Starbucks stock price continued to rise, so it was not harmed by the 2000-year-old dot-com bubble. Although I still own a small number of high-tech stocks, for some reasons I have escaped the disaster of the bubble.

Although I escaped the dot-com bubble of two thousand years and the subprime mortgage crisis in 2008, if I continue to hold Starbucks without my studying technical analysis, basic analysis, price volume analysis and option operations, and watching the news that McDonald's will sell coffee, Peet's coffee tastes better than Starbucks, the price of coffee beans will increase recently, Starbucks' profits will shrink, etc... The monster information will make me doubt the future of Starbucks and sell Starbucks. If I could hold on to Starbucks stock until today and never sell it, I would be richer.

Therefore, what you need to learn in investing is not technical analysis and any basic analysis, or understanding economics and politics, listening to analysts and reading market reports from investment banks. These are not helpful to investment at all, but are harmful. In the investment world, effort and performance are inversely proportional. Instead, we must learn to "do nothing" and learn "not to operate." "Nothing" is the highest state of investment.