How to Analyze Financial News to Get the Best Return on Investments in Binary Options Trading
How to Analyze Financial News to Get the Best Return on Investments in Binary Options TradingJune 6, 2012
Looking at the current financial situation in the Euro zone, with an added portion of skepticism in the Spanish government lead by Mariano Rajoy, its easy to see why investors are flocking to the East. However, it isn’t exactly easy pickings in China these days. It’s enough to look at BIDU stock during the last 3 months to understand whats the general trend.
And when institutional investors in Japan make a transition from manufacturing to safe-haven sectors, such as the food, pharmaceuticals, and railroad industries as Daniel Inman from WSJ online mentions, you have to recognize the fact there is a global recession triggered by the Euro Zone crisis fueled mainly by Greece and Spain, but also in the background we start hearing more talk about countries like Italy and Portugal. So I’d like to seize this opportunity to take a look at one of the more well known and influential stocks in the food and restaurant business – SBUX aka Starbucks.
First of all a bit of disclosure, I’m short on SBUX within the last 24 hours. Now for the interesting part, Starbucks has recently purchased a chain of Gourmet French Bakeries called La Boulange. The purchase was made from the Next World Investment Group (the holdings company) for $100 million in hard cash. The international coffee giant has claimed to have done its research and wants to strengthen its core U.S. retail business while at the same time expand its food offerings.
Personally I’m very skeptic about this strategic decision. SBUX management has decided to engage in a long term investment strategy, but they will suffer the consequences in the short term. The growing young sector is less interested in fancy bread and more organic foods and energy drinks. These figures are well known in the industry and failure to read market demand will result in a loss of market share.
Taking a chance on a maturity curve and the belief that creating market demand will significantly influence sales is a bit arrogant, not to mention pretentious. I’m sure the corporate boys at Starbucks will have a different opinion, but personally I don’t see this happening. I’m very concerned with the way this company has been managed, particularly due to the fact that its accounting practices have been known to be “less than perfect” to say the least. I also believe that 100 Million is too dilutive and during times like these a more practical and market focused approached should dictate business development policies. To be specific, the procurement of small factories producing organic food and/or investment in the energy drink sector. A chain like Starbucks has massive distribution and marketing power. The right type of partnership and co-branding could create an immediate boost in income and create a new niche of gourmet energy drinks.
As for all this talk about the Gourmet French Pastry becoming standardized and MacDonaldized, I don’t really care for that. There will always be a demand for quality food and if Starbucks is able to create quality food on a mass scale – kudos. Although I can’t see that happening. Anyways, the short pattern on a cup and handle scenario as my candlesticks show indicate a short on SBUX. This is also strengthened by what I hear on the news these days. So when I start to trade binary options today, I’m gonna call a put option below the support line. This however is not relevant for MCD, I’m gonna start trading right about now at OptionBit because all the signals are indicating call right about now.
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