David vs. Starbucks

A small town coffeeshop has taken out a large billboard ad reading, "We May Not Be Big... But We're Not Bitter, which is a shot at the new Starbucks in town. The article notes that the owners recognize the important role Starbucks has had in creating a market for retail coffeeshops and coffee-to-go. Without their influence, there would probably not be a market for smaller, locally-owned coffeeshops.

Starbucks itself saw its stock price fall recently due to falling sales caused, apparently it is believed, by an increase in prices. Higher dairy costs, in particular, have caused Starbucks coffee to rise. This decline was the first decline they have had ever, I think. Part of this is also just more general - as the American economy struggles, so goes Starbucks. If the housing troubles spill over into decreased consumer expenditure - which it may very well be doing, given the substantial fall in the value of American homes in some parts of the country - many consumer products like coffee and clothing will take a hit.

I'm currently reading the classic investment book, A Random Walk Down Wall Street by Princeton economist Burton Malkiel. Reading it, and then reading about the decline in Starbucks stock plus the big swings in Google stock over the last month, I'm more and more certain I don't ever want to try to chase individual stocks.