Loading...
Symbols:
Authors:

Companies We Care About: Starbucks, Apple, Google, & Amazon

by: Research Recap September 15, 2008 | about stocks: AAPL / AMZN / GOOG / MSFT / NFLX / SBUX / WFMI / YHOO    

Research Recap

About this author:
Become a Contributor Submit an Article
  • Font Size:
  • Print

Jacob Weisberg and Jim Ledbetter inaugurate Slate’s new business spinoff, The Big Money, with a provocative piece arguing that we all care personally about only four companies:

“Aside from the companies where you or members of your family work, how many do you actually care about? We think that for a lot of us, there are only four: Starbucks (NASDAQ: SBUX), Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), and Amazon (NASDAQ: AMZN)—call them the SAGA companies.”

The authors say these four companies have five characteristics in common:

  • They have a ubiquitous, everyday presence
  • They reflect the comparative advantage of today’s America, yet they are genuinely global.
  • They are restless innovators.
  • They follow their founders.
  • They engage consumers on an almost spiritual level.

“This may sound a bit silly, but it is crucial to understanding why people feel so passionate about SAGA companies. Think of the reaction this summer when Starbucks announced that it would close 600 outlets. There were protests and petition campaigns throughout the country. Americans reacted as if they had a legal right to lattes, and within short reach of their homes and offices.

In large part, this is because the companies inspire both a sense of community and the ability to create personalized brands.

“These commonalities help to explain why many other innovative and successful companies— Yahoo (NASDAQ: YHOO), Whole Foods (NYSE: WFMI), and Microsoft (NASDAQ: MSFT), for instance—don’t make the SAGA cut at the moment. Yahoo hasn’t changed anything about American life; Whole Foods is a presence in upscale life but has yet to achieve the mindshare of a Starbucks; Microsoft is no longer characterized by a strong sense of purpose. There are a few other companies that we think of as potential SAGA contenders. One is Netflix (NASDAQ): NFLX), whose SAGA status will probably depend on how it adapts its business to the age of digital downloads. Another is Facebook. Its explosive growth and deep engagement suggest SAGA-like passion, but it is still relatively young and occupies a space that is vulnerable to fads.”

[It can be argued that "SAGA" companies are losing some these characteristics: Starbucks is getting to feel more like McDonalds than a community coffee house; Apple is starting take on some of the less customer-friendly attributes of Microsoft, while Google is showing signs of its competition-squashing behavior as documented by Joe Nocera of The New York Times.

Still, there's no arguing with the article's basic thesis that "they're still the companies we want to read about."]

Disclosure: The author of this post is long Starbucks and Whole Foods.

Related Articles

This article has 6 comments:

  •  
    Sep 15 05:08 PM
    Cool article. Unfortunately being a SAGA company doesn't necessarily equate to a bullish future. I'd say the advantages are already priced into the stocks which then makes you wonder where should you put your money?

    Kevin
    20smoney.com
    Reply
  •  
    Sep 15 09:20 PM
    Well, yeah ! But when was the last time anyone 'Yahoo'd" something ... Google is ubiquitous .....And MSFT is just an annoying expense every year or so for no real benefit... Kinda like paying to do your taxes..

    jegan ;-)
    Reply
  •  
    Sep 16 08:56 AM
    ubiquitous aapl? A phone worth a couple of hundred bucks is not upscale? And what was the market share of AAPL again - have they broken 20%. Does this really pass muster?
    Reply
  •  
    Sep 16 03:31 PM
    Brilliant article with astute perceptions!
    Reply
  •  
    Sep 17 02:13 AM
    I'd look closely at Whole Foods.

    Upscale people set the trend, organic food will eventually be for everyone.
    Reply
  •  
    Sep 25 08:20 PM
    WFMI in Alabama is always packed - always, even today as we speak and as the market goes every which way.... It seems almost to be a bit of a refuge, one just feels better in there... It's at a major discount now and, please - a Kroger, Wal Mart, Safeway, A&P, Publix... are NOT equals to WF. No way. I can't "techically" shop there based on strict economics, but like many, I do. It's just a great place. Again, check the parking lots....

    Reply
More Comments on SBUX ยป
More by Research Recap
Investment Resources
Money Managment
Research
Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
Long Ideas