By Karen Blumenthal
(Crown Business, $25)
As a veteran Wall Street Journal reporter, Karen Blumenthal probably understands the stock market better than most people do. So she decided to do what most first-rate journalists do: research a topic from the bottom up and then publish what they've learned. To make the result palatable, Blumenthal explains the macroeconomics of the market by focusing on the microeconomic - the ups and downs of one company's stock. And, in this case, that company is Starbucks.
Blumenthal organizes Grande Expectations - not surprisingly, and certainly effectively - by month. The February chapter, for example, focuses on Starbucks' annual meeting for investors. May is devoted to an explanation of why Starbucks executives purchased some of the company's own stock on the open market (known as buybacks). November examines the thinking of a stock-market analyst who helps her clients decide whether to sell or to purchase Starbucks shares. But the book is really two sagas in one: There's a clearly explained, well-written account of stock-market vagaries, plus there's an examination of Starbucks' founding and growth. Blumenthal skillfully weaves together the two narrative lines so that they complement rather than clash with each other.
The account is mostly favorable to Starbucks; Blumenthal's reporting determined that the company is pretty much the good corporate citizen its image portrays it as. But the book does not constitute an unedited love letter. The author occasionally demonstrates skepticism about the company. After recounting the introduction of bottled water selling for the high price of $1.80 at Starbucks outlets, Blumenthal quotes a company executive using financial jargon to justify that price. Then, parenthetically, Blumenthal says, "My translation: Everything at Starbucks costs more."
Grande Expectations is also no valentine for the stock market. Blumenthal removes some of the mystery, but she wants her readers to know that rationality won't always reign: "One day seemingly good news can send a stock plunging; the next day bad news can send it climbing again." - Steve Weinberg