One of my core beliefs after running the Jubak Picks portfolio for more than 20 years now is that when the reason I picked a stock to buy evaporates, then it’s time to sell.
So today (June 21) I’m selling Starbucks (SBUX) out of my Jubak Picks portfolio.
When I added the stock it was on the company’s plans to open more or its high profile coffee palaces in China. Sales growth in China would be, the company said, the driver of sales growth for the company as a whole, especially as growth slowed in the U.S. market.
I don’t see China slapping tariffs on Starbucks’ coffee beans, but the Chinese government has dozens of ways to inhibit a company’s growth in the domestic market. Permits can take longer. Inspectors can find new violations of a hundred regulations. Chinese partners and employees can face subtle or blatant pressures.
I’d rather not find out exactly how inventive Chinese officials can be. And I suspect that pressures on U.S. companies in China will increase even if the current round of tariff disputes are settled.
My apologies and a bit of an explanation for the late posting of this sell. I wrote this sell and posted it on my subscription JubakAM.com site on June 21 while I was in the middle of a long-distance walk on the Great Allegheny Passage rail to trail route. But for boring technical reasons I was unable to post it–or any of the other posts I wrote during that walk on this site until I returned to New York yesterday June 24.