CEO Howard Schultz On The Future of Starbucks

I include below an intelligent quote from Starbucks CEO Howard Schultz during yesterday’s conference call with investors. It is noteworthy because he references some data metrics that Fedex founder Fred Smith shared with him that points to the closure of many traditional retailers in the years ahead due to the Amazon effect.

Schultz believes, and I agree, that the best way to ensure the survival of your physical business location is to make it experience-based. If I were in commercial real estate and operated a mall, I’d bring in musical performers, circus/magic acts, integrated discounts (my brother frequents a campus bar that gives you a $5 coupon for a haircut when you buy a pitcher of beer), and even talk-show type discussion and motivational speaker type discussion to stimulate traffic.

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Blaming Trump and Hillary For Poor Investment Results

You know how Warren Buffett mentioned that if interest rates stayed at 2% for the next twenty years, stocks ought to be valued at 50x earnings, but if they average 5%, they ought to go to 15x earnings?

The political analogy is that some sectors of the economy ought to be valued a lot differently depending upon which political party controls Congress and the Presidency. Twenty years of Republican rule will give me a different valuation for defense contractors, pharmaceuticals, and heavily regulated industries compared to twenty years of Democratic rule.

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