Karen Blumenthal, like most people, is mystified by the stock market. Just why is it, she wonders, that seemingly good news can send a stock plummeting and bad news can send it skyrocketing again?
In Grande Expectations, she shows how money is made and lost by following one of America’s hottest growth stocks, Starbucks, through a year of rapid store openings, fancy new drinks, and clever promotions, revealing how the many players—big and small investors, company management, analysts, and the media—propel its shares up and down.
Blumenthal pulls back the curtain on the stock market to expose its quirks and inner workings, from the power of a penny of earnings and the unexpected impact of a stock split to the image-enhancing effects of a brand of bottled water. With a fly-on-the-wall, character-driven narrative, Grande Expectations not only makes investing interesting but also will help you make smarter and savvier investing choices by:
•Understanding how big pension and mutual fund managers decide whether to buy more Starbucks—or dump it
•Seeing the unique ways that analysts and other finance professionals assess an investment—dissecting not only the numbers but also the company’s management, demographics, and global opportunities
•Learning how Starbucks executives manage our expectations and keep excitement percolating about the business—and the stock
•Watching how a stock is traded and how that might affect your buying or selling
•Gleaning how multibillion-dollar private hedge funds make money on infinitesimal changes in a stock’s price
•Entering the dark, strange world of the short sellers
•Realizing how different people can make absolutely opposite bets and all still come out ahead
You’ll come away with new insights into how the stock market really works—the power of expectations, stock buybacks, and profits—and explore Starbucks’ phenomenal growth and whether it is sustainable. By unraveling the market’s mysteries, Grande Expectations shows how investing can be both profitable and understandable. Get ready for the ride of your life—and a lifetime of fruitful stock market success.
Veteran journalist Blumenthal, whose most recent stint was with the Wall Street Journal, gives us a twofer with her informative, well-researched and very readable book. She takes a look at the factors that move a blue-chip stock these days--in this case, Starbucks--while weaving in the fascinating history of a company that 20 years ago experts would have said couldn't exist. After all, coffee consumption per capita in the U.S. peaked in the early 1960s, and coffee itself is the ultimate commodity: Everyone can make it, and everyone sells it. Yet Starbucks has been a soaring success, with margins that "profiteering" oil companies and others would absolutely drool over. (13 Aug 2007)