Book Review: "Finding the Next Starbucks"
Once it stops belaboring the obvious, this book is rich in tips on identifying growth stocks.
Finding the Next Starbucks is like a triple-shot grande Frappuccino with whipped cream -- which is to say this book is big, rich and packs a jolt of high-test investment advice. Too bad it starts like Folgers.
Now, Folgers is good coffee, but it's standard-issue, and so are the first 200 pages of Michael Moe's book (Penguin Group, $27), which is subtitled How to Identify and Invest in the Hot Stocks of Tomorrow. Moe, founder of ThinkEquity Partners and former director of global growth-stock research at Merrill Lynch, is clear and often droll. But if you've read a lot of investing books, you become sensitive to writing that belabors the obvious.
Moe cautions not to underestimate the importance of compound earnings growth. We get that. And, he says, the knowledge economy, globalization and the rise of China and India are megatrends. Well, yes. Then right around page 200, there's a ho-hum interview with retired football coach Lou Holtz on leadership, and you start thinking the coffee really has gone cold.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But turn one more page, and things start to percolate. Moe disses the discounted-cash-flow method of valuing companies, saying that "although few people understood it (or perhaps because of that), it caught on in academic circles." Then he describes three of his company's valuation techniques. The techniques are a bit technical, but Moe explains them clearly and most investors should find them useful.
Moe saves the best for last: He gets down and dirty with trends, industries and specific companies. For example, he analyzes the fragmented for-profit education industry and points out the need for learning in the knowledge economy. Innovative companies should clean up as the industry consolidates, says Moe, who provides a list of prime education stocks for consideration.
Underscoring his book's timeliness, Moe also tackles the energy industry. He begins by discussing the degree to which different sources of alternative energy become economical as the price of crude oil rises to various levels. He assesses the pros and cons of hydrogen fuel cells, ethanol and solar power. As he does for education stocks, Moe lists his best bets among alternative-energy companies; he names 19, including a few you've probably never heard of.
Hot stuff.
-
9 Types of Insurance You Don't NeedFinancial Planning If you're paying for these types of insurance, you may be wasting your money. Here's what you need to know.
-
Are You Putting Yourself Last? The Cost Could Be Your RetirementIf you're part of the sandwich generation, it's critical that you don't let the needs of your aging parents come at the expense of your future.
-
Time to Prepare for Disasters Like They Could Happen to YouYou can no longer have the mindset that "that won't happen here." Because it absolutely could. As we head into 2026, consider making a disaster plan.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffett become people like Warren Buffett by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for Fall Rate Cuts by the FedThe probability the Fed cuts interest rates by 25 basis points in October is now greater than 90%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?
-
How the Stock Market Performed in the First 6 Months of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
Fed Leaves Rates Unchanged: What the Experts Are SayingFederal Reserve As widely expected, the Federal Open Market Committee took a 'wait-and-see' approach toward borrowing costs.
-
Fed Sees Fewer Rate Cuts in 2025: What the Experts Are Saying
Federal Reserve The Federal Reserve cut interest rates as expected, but the future path of borrowing costs became more opaque.
