IFB129: A Sip of Starbucks Balance Sheet

11.28.2019 - By The Investing for Beginners Podcast - Your Path to Financial Freedom

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Dave:                                    00:36                     All
right folks, welcome to the Investing for Beginners podcast. This is episode
129 tonight. Andrew and I are going to go back to the well, and we’re going to
answer a listener’s question. We got a great one the other day, and Andrew
thought this would be a great conversation for us to have with you guys, so I’m
going to go ahead and read the question, and then Andrew will take the first
stab at it. All right, so here we go. I have been practicing using the VTI
Excel sheet and pick Starbucks since they are a large company that has been
around for a while and doesn’t seem to be going anywhere. When I input their
numbers into the spreadsheet, it put on a VTI of 1428 I see. They have more way
abilities than assets. Their dividend has decreased from last year, and their
shareholder equity seems to be in a negative. Yet when I read articles online,
they say it as a good buy. How do you reconcile these articles with the data we
are receiving through the VTI process. Thank you, and love all the content.
Andrew, what are your thoughts on this?

Andrew:                              01:35                     Yeah,
super good question. First off, and I think there’ll be a lot of fun to talk
about Starbucks and take a deep dive into it. Just for kind of clarification
for people who don’t know what the listener is talking about, we need to says
VTI that stands for value trap indicator. It is a formula that I created and
use on every stock I buy. And so basically it takes some of the financial
numbers around the company and does some calculations and tells you generally
whether it’s a good buy or not. So 1428, that’s a very high number in the range
of VTI world. That’s definitely like in strong sell territory or at the very
least, do not buy a territory. So I think you know it. It’s a great question
and a great thing to think about. Because you have, you have on let, let’s
start maybe with a disclaimer.

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