My Recovery Spec Is Boeing

I got excited about jet aircraft more than 70 years ago. Actually, I

lost my hearing jumping out of an aircraft during the Korean War.

That was an early fifties experience. Nobody won. Just a “cease

fire” in 1953 that is still in place.

As a young analyst in the fifties, I called Boeing’s chief financial

officer to arrange a visit to their Renton factory. They issued me a

bicycle and I was free to tour the factory’s floor where they were

assembling 707’s. A huddle of mechanics surrounded each aircraft

on the floor as they wired ‘em up.

It’s there I learned about titanium fasteners, a Boeing development

superior to stainless steel fasteners.

Still a shareholder, I doubled up on my long-standing position,

some 20,000 shares. Boeing was one of the few stocks that held

its ground in the face of Trump’s threat to lower credit card

interest rates. The market sold off some 2%.

Typical growth stocks like Apple, Tesla, Nvidia, American

Express, IBM and Meta dropped a bunch of points, but many

bounced back on the second day of tracking. GDP stocks like

General Motors and IBM had shed some 4 percent practically

overnight. Even my recovering American Express took gas, down

a dozen points. There was no money for Amazon, down 8 points,

some 4%. Today, they took GE out to be shot, down some 20

points, 7%.

Provided I have ready cash, I love to buy into panics, choosing

viable growthies with solid balance sheets. You don’t need a long

list. Maybe, just half a dozen properties. My candidates currently

are Boeing, American Express, Goldman Sachs and Amazon.

There’s plenty of “also rans” that do act poorly, and whose

fundamentals are challengeable. Bad acting growthies embrace

Microsoft and Apple. The major Boeing risk is that something

mechanical will go wrong with either a new or old model aircraft

that’s in service. Such a happening, even assuming it is

correctible within a reasonable time period, could destroy the

price-earnings ratio for the stock.

Boeing would never ever sell at a premium price-earnings ratio

again. The market would consider it then just another damaged

capital goods producer with serious production problems. I could

see Boeing selling then at 10 times earnings or wherever mediocre

machine tool stocks normally trade. It would get crushed by

carrying a lower price-earnings ratio on flattened or declining

earnings.

Boeing has doubled over the past 12 months, being rewarded for

its mechanical excellence and healthy order book.