TL;DR

A day trader, convinced Starbucks is failing because he’s seen empty stores, bets against the stock. This highlights the dangers of emotional, ill-informed investment decisions and the importance of thorough market research.

Story

Another day, another delusional day trader. This time, our protagonist isn’t falling for a get-rich-quick scheme; he’s creating one – or at least trying to. His “insider information”? Empty Starbucks. His genius plan? Betting against Starbucks’ stock because he’s seen a few empty stores. It’s like predicting a tsunami based on low tide at your local beach.

His logic is a house of cards, built on wishful thinking and confirmation bias. He’s cherry-picking data to fit his pre-conceived notion that Starbucks is failing. He hasn’t considered broader economic factors – inflation, changing consumer habits, global supply chain issues – and assumes his limited observation reflects the entire company’s health. This isn’t financial analysis; it’s armchair quarterbacking with real money.

The human impact is… well, it’s the guy’s potential financial ruin. It’s the cost of those puts, the risk of losing his money chasing an unfounded prediction. It’s a sobering example of how easily emotions can override logic in investing. Remember Enron? People lost their life savings because they trusted inflated figures. This guy is building his own miniature Enron with his Starbucks observations.

The lesson? Don’t be a caffeine-fueled Cassandra. Real financial analysis involves deep dives, not drive-by observations. Look at the company’s financial reports, industry trends, and competitive landscape. Don’t base your decisions on your dating life in a handful of empty coffee shops. Diversify your investments. Don’t put all your eggs in one basket, especially a basket built on speculation about how many women are at Starbucks.

In conclusion, this story showcases how easy it is to rationalize bad investments using flawed information. This isn’t about Starbucks’ success or failure; it’s about the danger of emotional investing and the importance of rigorous analysis. This guy’s “strategy” is as effective as trying to win the lottery by wishing really hard.

Advice

Never base investment decisions on anecdotal evidence or gut feelings. Always conduct thorough research and diversify your portfolio to mitigate risk.

Source

https://www.reddit.com/r/wallstreetbets/comments/1lesnzn/sbux_numbers_not_looking_good/