Boeing…Tsk Tsk
About five years ago, I was just getting into investing. As I have previously said, investing has always appealed to me, but since I was just starting and was eleven, I was mostly following the opinions of others. One day, I was scrolling through CNBC (it was the cheapest finance source available, but now it sucks), and I saw an article celebrating Boeing and its wonderous nature. Next Thursday, on my weekly call with my grandfather, I told him about Boeing and how optimistic I was despite reading one CNBC article. He told me to watch myself, and sure enough, Boeing fell to the ground (pun) when two of their planes crashed. Even though it's a bit morbid to consider, their stock fell as well. Now, I was ready to pounce. In my mind, this was a great stock struck down by bad luck. Once again, my grandfather cautioned me not to try and catch this falling knife. And once again, he was correct. Each piece of bad news caused the stock to fall again, and the bad news kept rolling down the hill. Eventually, COVID happened, and the stock finally bottomed out. People sort of forgot about two of Boeing's planes just falling out of the sky, assuming the Federal Government had handled it. I gradually lost interest in Boeing and transitioned to a tech-heavy portfolio; a portfolio that has served me pretty well.
Now, it has happened again. The Department of Justice has begun a criminal investigation of Boeing. All of this was sparked after a door on the oft-troubled 737 MAX flew off during a flight. Likely, the criminal investigation will yield some bad news about Boeing's procedures and the overall health of the company. Likely, Boeing will be found to have cut corners many times. And likely, Boeing will pay a hefty fine, something similar to the $2.5 Billion over four years ago, and we will forget about this entire event until a decade from now when this feckless, coddled company will cut too many corners and kill people...again. And this all brings me to my final point; do not try to catch the falling knife, especially when that knife is Boeing.
There are just certain companies that suck, and Boeing is one of them. Companies like Boeing return again and again to parade around their supposedly top-of-the-line valuation. Soon, you find out why those companies were valued so kindly. You and I are too small to catch this knife. We cannot possibly comprehend the advantages that the hedge funds have over us. To them, we are completely insignificant. Even our wildest dreams of success in the market are a Tuesday. We cannot catch that knife, that is not within our ability so there is no point in trying, especially with Boeing.
Boeing is a special case. The US Government will never let it fail, because Boeing makes great warplanes, and also, to let Boeing fail is to let Airbus (a dirty European company) win, so obviously we cannot let Boeing fail. When companies do not have real competition, and Boeing does not, they get lazy and sloppy. The lack of competition is why Communism fails. Not to get too political, but simply when there is no incentive to work, say a competitor, humans, and companies fail to work. Boeing has always cut corners, and they kill people. The stock plummets as Federal Agencies pledge to fix the issue. Their bosses are voted out of office or their term limits expire. Boeing gets a massive fine that is quickly balanced out by the billions the Federal Government pays it for weapons, and we are back to square one.
This has been meandering, but I write all of this to say that Boeing has always, and will always be, a bad company. Boeing’s lack of direct competition makes it weak. Lack of punishment makes Boeing weak. Lack of leadership makes Boeing weak. Overly-enticing valuations drive weak traders to Boeing’s doorstep. You do not want to be weak in the market or suckered in by a fairy tale of growth from a dying, played-out, and relatively despicable company.
Boeing if you give me a fighter jet, I will reverse my opinion completely.
