Is it time to short Starbucks??? Answer below!!!

Is it time to short Starbucks??? Answer below!!!

I wrote a few weeks ago that with the political environment in the U.S. that one headwind the markets will be facing is the boycotting trend that is going on by both parties and the public.

There have been a number of casualties of big named companies such as Target, LL bean, State of Georgia, Kellogg, the NFL just to name a few.

I suggested that there might be some money to be made shorting stocks at the very early stages where the CEO considers himself a social warrior and puts his social views (political views) ahead of company profits.

The newest on the list is Starbucks. The CEO announced yesterday that they would be hiring 10,000 refugees over the next 5 years in response to Trump’s Immigration order.

I do not wish to get into the pros and cons of the order itself or the pros and cons of announcing this hiring practice as a response to the White House’s new policy. That is beyond the subject of this site.

But I do wish to get into the public’s response to this announcement by Starbucks.

As we have seen in the past, these boycotts have a substantial effect on the price of the stock once the boycotts become public knowledge and get assimilated by the media.

With Starbucks this is cutting edge news as the letter by the CEO went out Sunday.

In premarket the stock is trading at 55.65 or -.47 and -.84%.

One caveat, this stock took a large gap down on on Friday closing off 4%. as a result of slashing it full year revenue forcasts.

This to me looks like a reasonable short based upon what these stocks have done once a boycott is in place.

I might add for a CEO that made 21.8 Million in salary in 2016 to jeopordize his company for the sake of politics is just how insane things are becoming in the U.S. right now.

Is there a breaking point to all of this? Of course, and I have a feeling we are not far from it. As long as the main stream media and the politicians continue to stir up controvery where little exists and outside groups continue to finance protesters here in the U.S. there will be no rest to what we are seeing now.

The violence has been minimal however the rhetoric about violence is increasing at a substantial pace.

I am still long GEO from 35.62 and GLD from 108.25. In addition have have on several other swing trade to the long side.

I view any pullbacks as buying opportunities as short term despite the chaotic nature of  U.S. politics and the World, the White House’s plans for jettisoning regulations will have a rubber band effect for the short term.

I read a funny comment that pretty much explains the state of the Anti Trump hysteria from the left.  ” If Trump announced a cure for Cancer there would be rioting in the streets”.  While of course an overstatement, it does depict the environment the U.S. media, the left, and the republican never trumpers have created.

Long term if it continues it will not bode well for the markets.

If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.

It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:)

Good Luck Today


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