Independent E.G.

Time to Buy Airline Stocks?

There shouldn't be any dispute that Mr. Buffet is a "big" investor. If you are a serious investor, you wouldn't think those "mutual funds" are getting anywhere near "big" returns. Mr. Buffet really believes in monopoly. It's allover in his investing philosophy and practices. That's an indisputable fact. The airlines are shaking toward that direction. Lots of volatility. The time-frame we are talking here is right now and "meanwhile". Not the 90's. That's a very different scenario.

Time to Buy Airline Stocks?

Airlines are important to modern society, very important. But they have to depend on oil for fuel. Oils are relatively scarce (comparing with hydrogen) and do get expensive (comparing $10/barrel). Next comes labor cost and everything else made up pretty much the last third of the cost. It may seem to be complicate or different with its unique characteristics but it falls in transportation and service categories. That shouldn't be the reason to scare people away, or does it? It share many common ground with other business, then what is it that really make people think they should stay away from airlines? If it's not the high oil price?

How Bad Is the Oil Shock of 2008?

1. Leadership. Leadership at all levels and in all walks of lives and communities.
2. Good conscience. Imagine if every citizen or resident proactively contribute his/her share, what's no to overcome?
3. Collective power. Why not utilize all these talents collectively? We have the largest pool of smart and practical brain power in the World, don't we? We need to pull these people together.
When the world changed after 911, when we are under attack in so many angles, the status changed. Don't surrender to this mess! Ask not what others can do for you, ask what you and your corporation can do for your own country!
Do we have that spirit? We used to.
When Asian financial crisis hit Asia a few years ago, Korean Airlines' flight attendants jointed other citizens at their airport in Seoul to ask people not to leave their own country so their money will be spent inside their own country.
Right now in Taiwan, the Mayor of Kaohsiung is offering free ride on all their public buses. The government in Taipei is offering 20% raise for their employee in helping them overcoming oil crisis.
And their citizens responding actively in efforts to reduce energy consumption.
Just to list a few. What are we going to do?

Time to Buy Airline Stocks?

Oil price will come down. The World will act together. Read and learn what's going on at G8+3 summit. 911 didn't kill US airlines and US economy, but the drivers behind the oil price are seriously trying. "All the airlines have to file for Chapter 11"? In your dreams!

Time to Buy Airline Stocks?

Big investors invest in monopoly which guarantees a lot. Look at those gas companies. Look at their profit level before and after their mergers. Those small gas stations were bought by bigger ones when you had a pro-merger government (congress and administration). Now the airlines are following the same pattern, only a little bit late. But airlines usually get on headlines a lot. If you can see the potential which means reduced capacity and higher price, reduced hedged whole-sale fuel price, reduced labor cost and service cost (what do they serve nowadays?), you will think very differently. Is airline important for business and society? Be objective in your reasoning even you don't like to fly and don't like their service. Can you imagine a modern economy without airline service?
On the other side, those experts and specialists really want to protect their territories because of its unique aviation "mysterious" nature of business. Airlines business is different in many ways comparing with other conventional business models. They have special regulations, they require special training, they are different from other transportation or service business. It's enough to keep Mr. Warren Buffet away from this field. But Mr. George Soro invested heavily in Chinese airlines and Jet Blue. And so do hundreds of private equities funds. They are in it with claimed "expertise". And they usually try to protect their claimed "territories". Meanwhile, Mr. Buffet is using his private jet and invest in railroads instead.