Cramer: The Lesson of Starbucks

 | May 17, 2017 | 1:00 PM EDT
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amzn

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sbux

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pnra

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mcd

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aapl

Why did you sell that Amazon (AMZN) ? Why did you get rid of one of the greatest performers in history?

Because of days like today, that's why. Because you looked at what you owned and you said, holy cow, I have a good gain on this one and I am not going to let it go away. Or because you said, oh no, Amazon's expensive as all get out. Maybe you even said, you know what, I am being really greedy.

It is true that I have often said bulls make money, bears make money and hogs get slaughtered. Nonetheless, that doesn't mean you have to throw away a stock entirely because you can't take the pain or you are worried about the implications of Trump's issues -- as if the business of Amazon has anything to do with Comey, Flynn and the rest of the grist of the White House mill.

If anything, you can always sell some and play with the house's money.

Let's use a real-life example that I talked about with club members of Action Alerts PLUS today on my monthly conference call. Let's use the stock of Starbucks (SBUX)

Today we were scanning stocks as we always do and saw that the stock of Starbucks was actually up on this hideous day. I said to myself, what an attractive opportunity to lock in a gain. Why not? It's up, isn't that exactly the opportunity you want?

But then I started thinking a couple of things. First, what kind of buying power is out there that this stock can buck the maelstrom of S&P 500 futures sellers? What does that say? It says there are motivated buyers.

Second, what did Starbucks do wrong that I would want to sell it other than the action in the market makes me nervous. If you think back to that last quarter, the company disappointed and missed the domestic same-store-sales number. But if you listened to my interview with Howard Schultz and Kevin Johnson, the executive chairman and CEO, you heard that things got better as the quarter went on and they are beginning to get their arms around the problems of too many customers coming in at once, including many on mobile pay. That's caused a jam-up and bad will at the register.

Panera (PNRA) had this problem, and when it was fixed, the stock zoomed. Ultimately Panera got a takeover bid. That's not going to happen at Starbucks. But the stock's resistance to falling does tell me you can't give it away here. If anything, you want to be a buyer.

I mention this because, like Amazon, Starbucks has been an incredible performer and yet very few people have been in it for the long run. Like Amazon, Starbucks has had its problems that have caused the stock to underperform. As my colleague David Faber from Squawk on the Street pointed out today, McDonald's (MCD) now has a much bigger market cap than Starbucks, $119 billion versus $86 billion, something I didn't think I would see happen.

But what matters to me is that I do not want to be shaken out by this period of underperformance any more than I wanted to be shaken out of Apple (AAPL) during its swan dive last year at this time. (Starbucks and Apple are part of TheStreet's Action Alerts PLUS portfolio.) 

Days like today try your skills and your patience, if not your blood pressure. But I don't want to look back at Starbucks like so many look back at Amazon and ask, "Yeah, I sold that, but you know what, I forget why, maybe something with Trump?"

Believe me, that's going to happen. I just don't want it to happen to my trust. That's not how you invest. It's how you panic and, there we go, no one ever made a dime panicking. 

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