sbux price drop is buying opportunity Maybe yes maybe no, normally there's a reason for a drop like this. I thought sbux was priced to perfection at 50 (in some long ago post I explained why), sold, and promptly watched it go to 61...ouch, 22% up! But perfection is hard to sustain and the past two quarters, we saw- same store sales increase down to 7% in both quarters -- not bad but not perfection when previous three quarters were 9, 9, and 8. SSS in next few quarters will therefore have very tough baseline to overcome.- Gross margin right around 56% (56.2 and 55.8), continuing a steady decline since the peak of 59.5 in the quarter ending 1/3/2011- Negative free cash flow in quarter ending 4/1/12 (don't have latest quarter's cash)...this is partly seasonal and its less negative than year ago, but two years ago was positive. "Less negative" is not perfection.At some point I may look to get back in but I would like to see a turn around in margin performance and I am worried about further reductions in same store sale growth given the economic headwinds. Also watching cash as always. Not quite yet. I have already proven I can't call the top and I know I can't call the bottom, so i'm watching for signs that could be omens.For anybody out there who bought in the upper 50's, be careful. The legendary trader Paul Tudor Jones has a sign over his desk to remind himself that "Losers average Losers." I have done it more often then i care to admit (i'm not wrong, the market's wrong) and usually it ends in tears.
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