Why I bought McDonald's today...

C

Cabin111

I've been eyeing this stock for a few weeks. Wanted to get in on a dip...But wasn't able to. Last night I put in a price at $184.69...Got in at $187.90. It has a 2.7% dividend. Then did a covered call for the June 21 $210., sold it for $9.85. I sold a CD at Schwab to get into this...Had to wait till the money cleared (today).

Things I like about this company; They have a presence around the world!! North America, Europe, Asia, Middle East all are established. Since they are established, they should have their distribution channels working well...Vendors (and back up vendors) set up. In the US (and around the world) they have prime locations. The locations (which they own the property) are SO good, that when a location needs work, they can do major repair easily or just tear down and start from scratch.

COVID-19 issues...They are open here in California. You can drive through or pick up at the counter...No eating inside. That cuts down on extra people cleaning up. If and when some chains falter, MCD will still be there. Many McDonald's have play areas and drive thru...Both can help bring people there. I believe Luckin (in China) will make it...But if they don't, McDonald's will pick up their business. In Australia there is a chain of coffee shops called Gloria Jean's Coffees. The franchisees are not doing well...Almost like Quiznos in the US. If it falter, MCD could pick up market share. I wonder if pension fund managers may look to this company as a fairly safe investment.

This is sort of a buy and hold for me. If it gets called away in less than a year, I will be OK with it. It's in my Roth IRA...Tax free. Don't know about earning this year...Just looking for a long term investment with income.

If the US or the world goes into recession, people may not look to Starbucks for their coffee. They may bite the bullet and spend less, go with McDonald's. Since they are there, they'll pick up some junk food as well. Cabin
 
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Fast food chains draw more investors when they expand aggressively. I don't think MCD would choose to expand in a recession. And the economic downturn will affect at least some of the francise owners too. Historically, MCD was not a safehaven in recession.
 
Ha, I thought you were going to tell us about how you went and bought drive thru. I was going to tell you about the McDouble with a side of Big Mac sauce I bought yesterday. I'll see myself out now.
 
keesa said:
Fast food chains draw more investors when they expand aggressively. I don't think MCD would choose to expand in a recession. And the economic downturn will affect at least some of the francise owners too. Historically, MCD was not a safehaven in recession.
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It surely is a mature industry...I get it. Expansion is pretty much done. Again things like; property, locations, distribution, world reach, dividend, good option money, pension funds/mutual funds, even in a recession it should hold value. If a recession hits, I can ride it out on the dividend and do another covered call when the stock price is up a bit...
 
Except for some breakfast items, I am not a McD person. Here in Las Vegas, NV, barring coupons or other discounts, their primary menu pricing competes with Carls and Arbys which are both at the high end of pricing for fast food chains. It is amazing (to me) that the drive-thrus are packed. But in my observations, Sonic, which is no longer public on its own, hands down was the big winner here during the shutdown... the Sonic drive-in became something to do to get out of the house: a family outing!!

Personally, I flattened my IRA into cash about a month ago. GLD is my sole IRA holding, for the time being.

Anyway, as long as you have a plan, and it sounds like you have thought through your MCD position and a few possible scenarios, then all I will say is just stick to the plan that you created. Recognize when the plan no longer benefits you, and always know where the exit door is.

Good trades to you.
 
tiddlywinks said:
Except for some breakfast items, I am not a McD person. Here in Las Vegas, NV, barring coupons or other discounts, their primary menu pricing competes with Carls and Arbys which are both at the high end of pricing for fast food chains. It is amazing (to me) that the drive-thrus are packed. But in my observations, Sonic, which is no longer public on its own, hands down was the big winner here during the shutdown... the Sonic drive-in became something to do to get out of the house: a family outing!!

Personally, I flattened my IRA into cash about a month ago. GLD is my sole IRA holding, for the time being.

Anyway, as long as you have a plan, and it sounds like you have thought through your MCD position and a few possible scenarios, then all I will say is just stick to the plan that you created. Recognize when the plan no longer benefits you, and always know where the exit door is.

Good trades to you.
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Yeah, not a fan of their food. I enjoy the breakfast burrito and coffee. Besides that, nothing excites me. But a family on a budget...Someone wanting coffee/Coke/Diet Coke on the go (and pick some food) it works. It is NOT fine dining!!

I spent time on this Australia McDonald's website...Takes a little time to load, but I enjoyed seeing the menu.

https://www.google.com/url?sa=t&rct....com.au/menu&usg=AOvVaw1cCgO4KAH5xSdPBdcaLwWm
 
Cabin111 said:
...But a family on a budget...Someone wanting coffee/Coke/Diet Coke on the go (and pick some food) it works...
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If the family is on a budget they should NOT be eating out. It's quite expensive compared to whipping something up at home.

If they have a little time on their hands though and want to eat out, they could do some Denny's all-you-can-eat deal, stuff face, and when they are full, order more, wait a bit and then ask to take it home in a bag.
 
Bugsy said:
Ha, I thought you were going to tell us about how you went and bought drive thru. I was going to tell you about the McDouble with a side of Big Mac sauce I bought yesterday. I'll see myself out now.
More...

As I long time MCD holder... this is exactly what I had been expecting also!
 
Overnight said:
If the family is on a budget they should NOT be eating out. It's quite expensive compared to whipping something up at home.

If they have a little time on their hands though and want to eat out, they could do some Denny's all-you-can-eat deal, stuff face, and when they are full, order more, wait a bit and then ask to take it home in a bag.
More...

There are a great many things people "should" do, but don't. This falls into that category for many/most. Poor people eat at McDonalds constantly and also drop $5+ per day on coffees etc. from the drive-through.
 
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