Customer Reviews

Grande Expectations: A Year in the Life of Starbucks' Stock

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I've been amazed over the years at how many really smart, successful people -- CEOs, doctors, lawyers, etc. -- get utterly flummoxed by the way that the stock market works. Their own investments never do as well as they hoped. And if they have a big personal stake in the financial fate of some company, they're constantly frustrated by Wall Street's apparently fickle treatment of the company's actions and prospects.

For anyone who's been stuck in that quandary -- and haven't we all? -- Karen Blumenthal's book is a ray of sunshine. She astutely focuses on Starbucks, a well-known company that we all "sort of" understand. Then, chapter by chapter, she takes us behind the scenes to show how this company's financial destiny is really being shaped.

Some parts reminded me of a high-stakes judo match. (Short-sellers vs. everyone else.) Other sections read more like the journal of a lone explorer in dangerous territory (Individual investors trying to make the right decisions.) And the book's examination of hedge-fund strategies is like looking at your own blood under a microscope. It's a lucid peek at a hidden world that's packed full of weird action all the time.

For anyone whose life can be helped -- or hurt -- by what happens in the stock market, this is a fascinating and enormously valuable book.

I seldom go to Starbucks and can rarely stomach lengthy financial analysis, so I never expected to be so consumed by a book that I just happened across and then couldn't put down. As a liberal-arts-type reader, I was as riveted by this utterly charming biography of a stock as I routinely am by a great man's life story. As originally unappetizing to me as the thought of 300 pages detailing a company's year-long stock performance was the sheer pleasure here of following the author's wide-eyed pursuit of answers about why stocks rise and fall. As Ms. Blumenthal chases down a broad swath of individuals to learn all she could about the history and future prospects for Starbucks, I found the questions she put to Howard Schultz and other company execs, to security analysts and fund managers, to small DIY investors, and to many others, were exactly the kind of questions I wanted asked. Assuming you're not already a full-time securities pro, reading this book -- although it won't instantly certify you as a financial guru -- will, for less than the cost of a few macchiatos and frappucinos, make you far wiser about this amazing company and the ways of the market. Concentrating so deeply on one company enables the author to show how stock buybacks, black-box trading operations, analyst reports, and dozens of other abstract concepts actually work in a real-world case history over an extended period. Thus material that would otherwise seem academic and dry becomes far more palatable and understandable. Kudos to Ms. Blumenthal for wonderful reporting and making stock-tracking acutely interesting and intelligible.

This is a highly readable and interesting story about a cultural phenomena. The author gives us a "year-in-the life" story about Starbucks and its stock price fluctuations, while engaging the reader in behind the scenes details. She has woven a fascinating story without losing the reader to arcane financial jargon. The book is very balanced and a fun read. I highly recommend it -- Steve

Steve Forbes reviewed this book and loved it, and I think it appeals equally to people who understand the market well, and those who don't. Blumenthal details all the information you wish you had, but don't have time to gather, when investing in a stock. Mostly, though, it's a fascinating, fun read, and that's the reason to pick it up!

There is a world of difference between a company and its stock and this book aims to distinguish the two, which at times, can produce wildly varying perceptions, and Starbucks/SBUX is a prime example. From its humble beginnings in 1984 to its IPO in 1992 to the present, the company/stock has confounded all which has followed it. The author dedicated one year to cover this stock and provides much inner working details of what moves a stock, which all too often does not correlate with the company's performance, perplexing stockholders, analysts and even its own executives. What began as a fad and then an explosion of caffeinated loyalty, its tremendous growth during the 'yuppy' period of the early 90's was understandable, if not predictable. But what has fueled its continued ascent? This book describes, with many interviews with the Street's pros, the power of a growth stock (as opposed to a value stock such as her main rival McDonald's/MCD). She takes us into the huddle at the quarterly meetings and conference calls; into the chaotic annual shareholder's meetings; onto the trading desks of the NASDAQ market-makers, greedily juggling the spread. What drives the demand for SBUX with a perennial P/E of 40-60? Not surprisingly, this grabs the attention of the short sellers, who are often burned, when they ignore the PEG. She explains the stock buyback process and the thinking behind it, sometimes deceptive, but within the GAAP (dissect the 10-Q!). The one gripe I have is the hype on the sleeve of the book, which promises to enter the dark,strange world of the short sellers, which sensationalizes the phenomenon that is often blamed for the demise of a stock, company, or even the economy. There are one or two bland interviews with the short sellers, who are just rooting against the stock, hoping it will drop, just like a sports fan who roots against a certain team, hoping that it loses. Overall, it was a fine job, and a great choice of a stock to bring to light the often schizophrenic behavior of the stock market.

The stock price of any stock within a year can fluctuate significantly. It may trade as high as $60 and as low as $30. But is it possible for a company to be worth twice as much or half as much within a single year? It is possible, but unlikely.

In this book, the author tracks the price of Starbucks' stock and explains why it goes up and down. In the short run, the price is mainly influenced by supply and demand from market participants and not so much by the long-term fundamentals of a company.

Because the author goes into a lot of detail, reading it can be boring at places, but I recommend it to investors who truly want to learn why prices move up and down so significantly is short periods of time.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Have you ever watched a particular stock go up and down in value in the market and had trouble understanding the rational behind why it moved as it did? In Grande Expectations Blumenthal, a former long time writer for the Wall Street Journal, examines the historically "hot" stock of Starbucks. In it, she examines varying players in the buying and selling of a stock and spends time with each of them to understand why they choose to buy, sell, or hold Starbucks stock. The company had their Initial Public Offering of stock in 1992 and since that time has rocketed in growth.

One clever stylistic portion of the book is the text on the first page of each chapter is tapered in the form of a coffee cup. The chapters are divided by months and Blumenthal examines different things which affected the stock price. One example is an examination of how a price increase in coffee or the introduction of seasonal products affect sales and consequently the stock price. The book is not only a chronological account of the stock's price over the year of 2005 but also delves into the roles of analysts, mutual funds, hedge funds, investment clubs, individuals and varying other investors.

She attends the shareholder company meeting, which is put on as an entertaining spectacle and huge pep rally for shareholders. Additionally, she speaks with CEO Howard Shultz and a number of other executives to understand company strategy and why they do what they do. She also talks with local Starbucks owners and learns about the company's purpose in sometimes having multiple stores within close proximity such as directly across the street.

The stock market prices stocks based on expectations and potential for growth. It rewards companies which consistently produce strong growth and punishes companies when numbers slip even slightly from what its high expectations are. This can be seen in high growth companies who report solid earnings and yet the stock price takes a hit. The market has come to expect extraordinary results and prices the stock as such so when results are simply good and not extraordinary the stock price can fall.

It would have been nice to have seen the stock followed during 2006 so more recent history could have been followed but having a record of the stock's actions during 2005 was also educational. At times the technique of using months as chapter breaks did not seem to work from a literary standpoint. To some degree, we revisited the same characters whether individual investors, analysts, or investment clubs but I would like to have maintained the same cast and visited with them more frequently during the year to better grasp their thinking on actions with the stock. At the same time, the book tried to dig down to understand the various elements involved in why a stock price moves. The book felt like a journalistic style of interview, background, and research which provided a good end product but perhaps could have excelled more if it focused either on the story of how the individuals interacted with the stock or more strictly on the various components of why the stock moves.

Regardless of the aforementioned suggestions, the book provides a great historical and relatively current look at what is becoming a classic company recognized worldwide as well as insight into why a stock price moves as it does. Whether you're a coffee lover, stock market buff, or financial nerd, this book provides good reading material and lessons along the way.

Bought this as a required read for a master's class I took. It was an interesting book. I read it within a couple days, not because I needed to for my class, but because it was actually interesting.

I thought this was a good book about the history of the starbucks stock. The author kept the pace smooth and easy to navigate throughout.

While this book is subtitled "A Year in the Life of Starbucks' Stock," it serves as an introduction to the stock market for general readers--you don't have to be a coffee lover or Starbucks' stock owner to enjoy the ride. That's not to say that Starbucks fans won't enjoy it, though, as Blumenthal provides a fun look back at the rise of the Seattle coffee giant.

"Grande Expectations" is by far one of the most easily accessible books on the stock market ever written. As such, seasoned investors may be let down--but for the casual investor, I give this a five-star rating.