Category — The US Economy

As many as seven massive natural gas export terminals are expected to start up overseas this year, expanding worldwide capacity by 20 percent and flooding markets with new supplies of the key power plant and heating fuel. Dozens of new tankers capable of carrying natural gas in a liquefied form are slated to hit the seas.

Just as these new supplies come on line, worldwide demand is expected to drop as the global recession deepens.

…“It’s completely counterintuitive,” said Murray Douglas, a global LNG analyst with Wood Mackenzie in Houston, who is predicting U.S. LNG imports will grow 30 percent to 456 billion cubic feet this year and to more than 1.1 trillion cubic feet by 2013.

“We don’t believe Asia and Europe will be in a position to absorb this new production, and the U.S. is the only market that can take it, that has a large amount of storage.”

I’m thinking about Starbucks. Stock symbol (SBUX) Starbucks is sitting at $9.44/share as of Friday. The lowest it has been in 2008 was $7.06, The last time it was that low was in September of 2001, when it reached a low of $6.73 and closed out the month at $7.47. You have to go back to 1998 to find prices lower than $6.93.  Way back then, Starbucks was a much smaller business, fewer stores. I just have a hard time thinking it could ever go to $5, much less $4.45. but right now you can sell a $5 Put option for 55 cents and take in $55 dollars per option by holding the option for slightly less than 1 year (January 10).

If on January 10, 2010, the option were put to you, you would have to buy Starbucks for $5, less the 55 cents you already received.  Is it likely that Starbucks would ever be worth less than $4.45/share? Each option represents 100 shares of stock. It looks to me to be an easy 5,500 bucks if I sell 100 of those put options. I’m seriously thinking about it, coz I wouldn’t mind owning Starbucks at a net cost of $4.45/share. I suspect the assets they own are worth far more than that.

Starbucks Monthly Prices