Pt. 1 of How NOT to Make Money
I recently published three stocks to invest in for the coming year so you can swim in cash. Now, I will publish the inverse. Here are some stocks you should not invest in for the coming year. I add a caveat that you may have some information I am missing or knowledge I do not possess; also, I will try and talk about stocks I have not mentioned as being sells yet, so no Tesla or Nvidia. Here is the first stock, and I will add to this list as we progress through the holiday season.
The first stock on the chopping block this season is Starbucks. No, I am not telling you to sell because of anything related to the Israel-Palestine meltdown. That boycott has little long-term impact, and I honestly doubt its staying power. I think Starbucks is a sell because of one big reason. Starbucks is overdependent on China. The Chinese economy is about to tank, and consumer brands like Starbucks will be taken down. Starbucks depends on China for 10% of all revenue, owning and operating 6800 stores in 800 cities. If tens of millions of Chinese lose their jobs, they probably will not have much time for overpriced coffee. The Starbucks target audience is the youth in China, and the youth are unemployed. Youth unemployment in China has gotten so bad they stopped reporting the figures. If you add a Chinese government that is becoming exponentially more anti-America, I believe you have a company reliant on a poisonous fruit.
Starbucks is not a tech company. I am looking for tech tech tech in the coming year, and a brick-and-mortar company that I believe has reached its ceiling does not fit that billing. Every year sees the release of some new drink or trendy coffee, and Starbucks is not a rapidly adapting company.
I know I said this did not play a factor, and it does not directly, but Starbucks involving itself in politics is a lose-lose situation. The boycott does not matter much, but as I learned from Disney, there is no winning when involving yourself in a situation like this. No matter your political beliefs, pro-Israel or pro-Palestine, as a company like Starbucks, there is no benefit in involving yourself. In a situation like this, where the stakes are so high and so many different people are dying, Starbucks making a statement does not help you as a shareholder. If you agree with their statement as an individual, that is great for you, but it is objectively true that making any sort of statement does not add value to the company. Their support of Israel, or at least condemnation of attacks against Israel, stands in line with about 60% of America as a whole, but many fewer Americans in the younger bracket agree with their statement. That bracket is also where the majority of Starbucks sales come from. Add onto that the naturally progressive customers at Starbucks who have openly condemned Starbucks’ statement, and you have an unnecessary involvement in politics that they hopefully learn from.
Starbucks is a company that has been around too long to be making errors like the one with Israel-Palestine, and that is a sign of poor leadership, leadership that has shifted recently because of Howard Schultz’s retirement.
I am unsure about Starbucks and its future. I am unsure about Starbucks and its ability to stay on top of the market they have controlled for so long. I am unsure about so much of Starbucks, and there are many other places I would rather put my money. Merry Christmas/Happy Hannakuh/Happy Kwanza/+Many Others!
