A man named Moglia talked on TV about the boss of Starbucks, Narasimhan. He said that Narasimhan did not answer well when asked why the company's value is going down. Moglia thinks Narasimhan should admit there is a problem and try to fix it. Read from source...
1. Moglia's statement that Narasimhan must be on drugs to say something like that on national television is an ad hominem attack, which means it attacks the character of the person instead of their argument. This is a logical fallacy and does not provide any valid criticism of Narasimhan's response.
2. Moglia supports Cramer's line of questioning, but he does not address the specific issues that Cramer raises about Starbucks' stock performance. He simply agrees with Cramer without offering any counterarguments or alternative perspectives. This makes his criticism weak and unsubstantiated.
3. Moglia claims that what Narasimhan is doing is not working, but he does not provide any evidence or data to back up this claim. He only expresses his opinion, which may be biased or influenced by personal factors. A strong critique should include empirical evidence and logical reasoning to support the argument.
4. Moglia says that Narasimhan needs to acknowledge that what he is doing is not working, but he does not suggest any concrete steps or solutions for improving Starbucks' performance. He only offers vague criticism without offering any constructive feedback or guidance. This makes his critique ineffective and unhelpful.
Negative
Reasoning: The article discusses an expert criticizing the Starbucks CEO for his response to falling stock performance and mentions that the company's shares have plummeted after a disappointing quarterly report.
Based on the article, it seems that Starbucks (SBUX) is facing some challenges in terms of its stock performance and management. Here are some possible investment recommendations and associated risks:
1. Sell or avoid buying Starbucks shares: One option is to sell any existing shares of Starbucks or avoid purchasing them, given the negative sentiment and criticism from experts like Moglia and Cramer. This strategy could help protect your portfolio from further losses due to the company's underperformance. The risk here is that you might miss out on potential future growth if Starbucks manages to overcome its challenges and recover.
2. Buy puts on Starbucks: Another option is to buy put options on Starbuxs, which would give you the right to sell the shares at a specified price within a certain time period. This could be a way to bet on the company's stock price continuing to decline or consolidate, while limiting your losses if it rebounds. The risk here is that you could lose money if Starbucks shares reverse course and start rising significantly.
3. Buy Starbucks on the dip: A third option is to buy Starbucks shares when they are trading at a lower price than their current or historical average, hoping that they will recover and increase in value over time. This strategy could be rewarding if you believe that the company's fundamentals are still strong and that the stock price drop is temporary or overblown. The risk here is that you could lose money if Starbucks shares continue to fall or if the company fails to address its challenges adequately.
4. Invest in other consumer discretionary stocks: A fourth option is to invest in other companies within the same sector or industry as Starbucks, such as Dunkin' Brands Group Inc (DNKN), McDonald's Corp (MCD), or Yum! Brands Inc (YUM). This could diversify your portfolio and reduce your exposure to Starbucks-specific risks. The risk here is that other consumer discretionary stocks may also suffer from similar headwinds, such as changing consumer preferences, increased competition, or economic downturns.