‘HOLDING’ the next Starbucks…or as in Today’s Wallstrip-Kellogg’s

Finding “The Next Starbucks” is not as difficult as the media leads you to believe. The next Starbucks starts out on the all-time high list. HOLDING the next Starbucks when you were lucky enough to have bought it is the key.

I believe that I have latched onto and bought into the key to outsized gains in the market and am using this blog to continually flesh out the strategy and goal.

When I bought Crocs (CROX) at an all-time high back in September, based on price only, it made no sense based on the feedback. That feedback was wrong. I want feedback, but I don’t want active feedback ‘noise’, I want to tap into the public consciousness or ‘tipping points’ that Web 2.0 should allow me to tap. Here is the post . The meat is here:

The CROX post above made me think about product “tipping points” and Web 2.0. As I researched my original CROX post, I found hundreds of Flickr photos that CROX owners took of their shoes. Why?

I think we are on to something. It’s about public consciousness. If it is important enough, important and powerful trends should show themselves and persist in Web 2.0 social sites like Flickr and YouTube.

Photo and video sharing sites, tagging services and memtrackers of Web 2.0 have created a ‘tipping point’ in alternative stock research. It just makes sense.

My friend Roger, founder of Monitor 110 , and blogger at Information Arbitrage believes much the same and has created a product for institutions and hopefully, once economies of scale set in, for the smaller individual investors like you and me. Roger is also an investor and board member of Wallstrip.

A few months ago, I was introduced to Crawdad Technologies , a start-up from Arizona State University that analyzes consumer generated media. I asked them to track the ‘Buzz’ about Kellogg’s in the blogosphere and MySpace.

Here is a Summary of Kellogg’s Listening Post from Crawdad:

Crawdad’s Listening Post (see link) shows the tone (i.e. sentiment), focus, and volume of buzz, and words that are being talked about alot (hot), words showing up in positive posts (happy), and words showing up in negative posts (grumpy). Over the past 30 weeks the tone of buzz about Kelloggs has remained stable and relatively high. At 14% average tone, Kelloggs tops other food companies which typically have 10 or 20 percent lower tone. The recent upturn in Kelloggs? stock in March does not appear linked to any change in the tone or focus of buzz, and is thus more likely caused by financial news than consumer
news.

The summary table indicates that most of the entries found were on low relevance, indicating that most blogs that mention Kelloggs only do so in passing, indicating strong brand awareness but not widespread enthusiasm. The strong brand awareness and positive image are similar in nature to Kelloggs stock; recognized for good fundamentals and
under-priced, but not terribly strong buyer enthusiasm.

Here are some findings from looking at some of the entries indicated by the ‘README’ function.

There was negative buzz about:

Kelloggs had to change the name of Bran Buds in Sweden, as in
Swedish this roughly translated to ‘burnt farmer’.

Kelloggs closing of Cereal City USA

Kelloggs’ founder invented Corn Flakes to prevent masturbation (and in general was a strange fellow)

Some health related issues were mentioned–sugar, and pop-tarts recall for undeclared milk products

There was positive buzz about:

Stock-related news

Recent Xbox 360 promotion

I want to keep probing and testing on stocks as we go forward. It will likely make more sense on certain brands and names, especially those newer and ‘hotter brands’.

This is getting closer to what I want. I need to track it like a stock quote so need updates weekly by ticker. I need more historical and since buzz was not even trackable 5 years ago, the data needs more aging. But, you have to start somewhere. Please chip in if you have ideas on how to build on this and improve the service for projecting trends and ‘public consciousness’ research for stocks.