Back at the lows in April of 2009 I recommended buying Starbucks despite my misgivings about a business model that survives on charging a king’s ransom for a cup of coffee. My target was too low as usual but the idea worked out well (see recommendation in this blog). This was essentially the buy low sell high principal at work. Today the stock looks like this;
Now that the stock is up $30 from the low of $5 I would start thinking about selling high and buying low again. No doubt this one is overdone to the upside but this is a momentum stock par excellence. Start taking small short positions and or use options. I do not believe that QE2 will induce too many people to pay up for their lattes except , perhaps, in the proverbial square miles around the trading desks of the world’s financial centers.