Starbucks, Doorway to the World
What is spent now using borrowed money by definition means less spending in the future. As investors, especially smaller investors, we have little control over Washington and what choices they will make. Fortunately, as investors we are able to adapt to a changing financial landscape. Adaptation results in new profitable strategies regardless of where Washington leads us.
Even without our current economic worries, continuous education is always a good idea as markets develop. If the economy is weak in one region of the world, maybe it's time to look at other locations that offer a better rate of return? We can invest in companies based in the U.S. with significant world exposure, or find companies based outside the U.S.
Focusing on the world's markets is not as daunting as it may first appear. I recently read World Right Side Up from Wiley Publishing by Christopher Mayer. The book is a must-read for investors wanting to explore investing opportunities worldwide.
Thinking "outside the box," or outside the U.S., as the book suggests is relatively new for retail investors. Before the Internet connected world financial centers together, investing in other countries usually required local contacts and big money. Investors no longer are confined to New York-listed stocks.
In today's wired world, it's as easy to trade Hong Kong futures as buying Apple (AAPL) . I know because I have traded markets around the world for years. By opening up your investing horizon to the entire world, you also open up your portfolio to exponentially more companies that meet your investment objectives.
Paralleling the book's diversification strategy, I recently suggested Banco Bradesco S.A. (BBD) , in the article Rising Dividend Stocks That Don't Care About the Fiscal Cliff. Investing in American-traded foreign companies has many advantages.
Banco is a Brazilian dividend-paying bank that I believe has considerable upside potential. Mayer does outstanding work in explaining the pitfalls and possibilities in markets around the world. Moving from region to region, Mayer puts the power back into the investors' hands with the knowledge that anywhere at all is a potential winner (and loser).
I remain bullish with Apple and will remain so as long as their numbers stay reasonably close to recent reporting. I explained in Put Away the Prozac, Apple's Just Fine why Apple is an even better investment now with the current price discount.
I have paid particular attention to another company that shares many of the same qualities as Apple. Starbucks (SBUX) is growing revenue and earnings at a significantly higher rate than the average stock. Both companies enjoy revenue and margins particularly higher than their respective peers.