Monday, September 17, 2012

Summer's Gone. Starbucks Anyone?

If, back in May you had taken the traditional advice espoused by many stock market pundits, "Sell in May and go away!" you would have missed this summers rally in the market and now becoming back.

Over the summer I did not do much. It has never seemed to be good practice to sell in May to me. This year proved it to be very unwise.

Last weeks extra little jump in the markets however caused me to pause and look at my portfolio's and rebalance them.

One stock I had bought with some hope a while back was Qualcomm (QCOM) this chip company never really performed well for me, so with the Apple (AAPL) move up last week Qualcomm made a rise which took it into reasonable profit territory for me, so I sold out in order to look for another more profitable opportunity

. With Bernanke's move on Wednesday last, I am thinking that some US consumables might be interesting. I am still a hold on Apple (AAPL) buying on that pullback in early summer has left me with some nice earnings. I plan on holding to about $700 and then clipping off a few shares that will return most of the initial purchase for all the shares I bought, back at $550. Any pullback then will mean the stock would have to fall along way for me to lose all of my money.

Another stock that looks interesting at under $60 is Starbucks (SBUX). I plan to use a good portion of the Qualcom sale proceeds to buy in here.

Why Starbucks?

Well a couple of reasons.

They have paid a reasonable dividend, 17cents per share.

With the forecast of lower coffee prices over the next few months and an acquisition of a food supplier for bakery services things look good to expand breakfast and snack services

. If Bernanke's policy works, We could see the American people move back to spending more money on small treats and rewards. Starbucks has always been seen as an indulgance and a reward. A daily life luxury and I see a return, if only a brief one, as people will see themselves as a little more prosperous following the stimulus and possibly post election euphoria may help, depending on the winner.

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