No. of Recommendations: 2
Whatever it the terminal growth rate works out to be, I think there's enough runway to ride this for another 2-4x before worrying about the end game.

I agree with that assessment. My issue with the 500% growth rate is that the end arrives rather quickly and China has a propensity for overbuilding. My experience with retail tells me that low cost eateries can sustain a very high number of stores because they have to be within walking distance of their customers. You would not get in your car to go to an out of the way MacDonald's. Even so, at one point in time Starbucks managed to open way too many outlets in the USA. IIRC they had to call back the founder to set things right.

Wikipedia has a better memory than I do...

On January 8, 2008, Schultz returned as CEO of Starbucks after an eight-year hiatus.[26] Although the company was growing, that growth was largely dependent on opening new stores, while same-store sales were declining.[25] He fired many executives,[25][27] closed down hundreds of weak stores,[25][27] hired the company's first Chief Technology Officer,[27] introduced the Starbucks Reward Card,[27] and temporarily closed all US locations to retrain employees in making espresso.[27] The company soon returned to organic growth and investor favor.[27]

Look at what happens when a great idea is mismanaged, specially when it coincides with a financial crash (2006-2009)

Denny Schlesinger

BTW, LK came up as the best covered call to sell this week. ;)
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