More on the food stocks ..

Today, I saw an interesting article about Shake Shack - for those who know a very popular burger joint in Manhattan area which is soon to foray into the LA area to take up the likes of IN N Out. On the culinary side, I am strongly on the Shake Shack side compared to In-n-Out. However, I got intrigued by the non culinary aspect of this companies. I got sucked into the food sector and soon I began comparing the Shake Shack with Habit Burger, Chipotle, the ever green MCD, and so on. Now, I am a big fan of Chipotle. And I had invested in the DRI - which has the olive gardens, DIN - apple bees, EAT and so on in the past.

Strictly speaking this list is easy to break down and really based on my food as well a the stock performance, I think it is better to stay with the biggies such as MCD. I am no fan of other places like Burger king or wendy or so on .. I like subway which is private. Among the chains, I like the pizza ones like Dominos or Pizza hut. When they go up, they can really go up and when they go down, they can stay there for a long time. Come bad news or Recession these are usually the first ones to go down. Hence, they bring up on this unnecessary stress to the investor as to whether to sell or hold on to these investments. Unlike say a MCD which like a WMT is a very diversified entity. On top of it, they are at all time highs at the time of this writing in May 2015. So for now, I would just hold off on this. Also, the food industry including MCD has the persistent problems about minimum wage increases, food preference changes in millenials, food quality, the chances that certain regions might not do well, real estate costs, unpredictable costs and simply plain old fact that a restaurant business is brutally competitive and you never know when a next truck is going to steal your business. Like on paper, I like the Potbelly more than the Panera breads more but it is the latter which has the better stock but no dividend yield and honestly does not correlate with the beta of 0.75 .. I see way more waivering and fluctuation of the graph. Add to this the higher forward PE. Investor psychology plays a role. For instance I like chipotle, shake shack, potbelly so might get emotional in buying and holding this stocks. Probably not needed for this. With MCD though, I never go there :D .. so maybe way less emotional about that.

Bottomline, even with MCD and the rest of the gang, I will just stay put for now. At max, these stocks might get added to a zing list. I will revisit them later in the down market.