Starbucks ($50.01), a longtime darling of the investment community and a global favorite for talkers and readers, is percolating again.

After being scalded by about a 28% drop from its 2004 close of $62.36 to its 2005 low of $44.58 and an even greater 40% plunge from its 52-week low of $37.03, the world’s largest coffee-shop chain – 8,500 locations in more than 30 countries – is steaming again, having surged 33% from its low point.

But not every investor is delighted. One of them is Leonard Schramm, who has been caught up in a war – no, not in Iraq, but in the heated battle between the shorts and the longs in the stock. In a recent e-mail, he wrote: “Dan, my broker should only drop dead. He urged me to sell my Starbucks, which I bought at $39, telling me I was at great risk and pushed me to short it (a bet its price will fall). I took his advice and I’m behind around $18,000. I can’t stand the pain and I’m thinking of covering my short. Could you please give me your take on this matter.”

Answer: It won’t be any great solace, but you’re not alone as a beaten-up short seller in the stock, which has a sizable short position of 11,928,000 shares, or about 2.5% of the float. Despite the view of the shorts that the stock, which sports a lofty 45 price earnings multiple, is overpriced – this is what your broker may have thought – a couple of analysts, based on their latest research, think you risk even bigger losses ahead if you stick to your short position.

One is Ashley Woodruff of Bear Stearns, who rates Starbucks as a market outperformer. Taking note of the company’s recently reported fiscal second-quarter per-share earnings gain of 25.2%, and its higher same-store sales guidance for the remainder of fiscal 2005, Ms. Woodruff has raised her full year’s earnings estimate to $1.18 a share and reiterated her buy rating with a 12-month price target of $60.She expects the company to meet its current earnings target and thinks it’s well positioned to grow earnings 20%-25% a year over the next three to five years.

The analyst observes that the company has repurchased $334.7 million worth of its stock in the second quarter, which is more than it has ever spent on a share repurchase in a full year, and she believes Starbucks has been active in this respect in the third quarter as well. She notes that store margins declined more than expected in the second quarter, but she expects this deterioration to dissipate over the next several quarters as the company begins to tap higher costs associated with many of its recent initiatives, like a lunch menu, upgrading stores, and adding assistant managers to prepare for an accelerated expansion in its number of locations.

Larry Miller of Prudential Securities, who also savors Starbucks, likes the fact that the company has allayed fears about slowing sales by raising its comp-store sales guidance to 7% or slightly above for the remainder of fiscal 2005 to the upper end of its targeted 3%-7% range. Further, he sees very few fundamental concerns and believes the current multiple of 32 times estimated fiscal 2006 earnings represents an attractive entry for the shares. His earnings outlook calls for $1.18 and $1.46 a share, respectively, in 2005 and 2006, and he sees the stock rising to $58 over the next 12 months.

So the clear stock message from our two Starbucks fans seems to be a knockoff of the former advertised slogan for Alka-Seltzer: Try it, you’ll like it!

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TOO MANY BULLS? That may be hard to believe, given the market’s recent pounding, its poor 2005 showing, and a bevy of concerns, plus recent surveys that show decreasing bullish sentiment at the public and professional levels. But the facts speak for themselves. A recent survey by veteran consumer pollster Sindlinger & Company shows a near-record 57.4% of American households now hold a stake in the stock market. That’s just a shade below the 57.8% household peak in 2000 when the bubble popped. Interestingly, September 1987 saw the all-time high (up to that point) at 36%, which was shortly before the memorable one-day market crash on October 19, when the Dow plunged 22.7%. Household America isn’t alone in its enthusiasm for stocks. A recent Market Vane reading (a consensus of the views of investment advisers) found 59% of them bullish. The big risk here: crowd psychology, be it bullish or bearish, is often a super-contrary indicator.