Economics 101

The best economic advice that you will ever receive - maybe.

Friday, December 01, 2006

The Long-Term Report! MasterCard or Starbucks all the way!

I am bringing you the long-term report. I think you need to buy MasterCard or Starbucks and hold on to it, for a couple of years. I think that MasterCard has no choice but to double its stock price and reach $200 by the next year, and that Starbucks, who is opening nearly 6 stores every day and is thriving in China just needs to be bought. I have talked a lot about Starbucks already which is why I will focus on MasterCard. Yes, MasterCard is a bit expensive right now, but thats only because you didn't buy it at its IPO (initial public offering) price of $40. Yes, MasterCard was at $40, and I think you should have bought it then, but I take full-credit for that mistake, because I didn't make a post telling you to buy it when it came out at $40. Really, the only two "competitive," of what I call credit-card stocks, is MasterCard and American Express. Think about how many more customers MasterCard has. You also have too look at the current growth and the future growth of the companies. MasterCard has a quartly revenue growth of 13.90%, while American Express only has a quartly revenue growth of 11.60%. Let's talk about Starbucks a little bit. The only other public coffee company besides Starbucks is Diedrich. But look at the difference in market capitol. The lowly Diedrich has a market cap. of $17.95 million, but Starbucks has a maket cap. of 26.61B. Well, actually there is one other public cofee company, New World Restaurant Group (NWRG), but it is a bulletin-board stock, and those stocks will never take you anywhere.Let's take a look at the growth estimates for Starbucks. Let alone, next year it will grow 21.3%. And in the next 5 years, Starbucks is set to grow 22%. So Starbucks has a great chance coming up in the near-future, so you need to buy it.

The Bottom Line: You need to invest in MasterCard or Starbucks and make it long-term!

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