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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (9644)	1/31/2000 12:50:00 PM
From: Archie Meeties	Read Replies (2) of 78666

I would like to suggest that the good numbers we've seen coming out of airlines represent an anomaly due, in part, to exceptional domestic demand coupled with abnormally low fuel costs. The two are related. The marginal pool of flyers contracts when rates increase as airlines pass on higher fuel costs to customers. At the extreme ends of fuel costs, I view airlines as cyclicals who lag and move inversely to oil prices. MAIR, as noted, may be able to tolerate higher fuel costs better than most. But all will see margins hurt and growth slowed if oil sustains it's current price. FWIW, I don't think it will and am investing as if oil will hover around $20-24. When it does, I will re-evaluate airlines and then think about a purchase during the first full quarter of lower fuel costs. In any case, ng seems the better of the two long term. simmonsco-intl.com -A.

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