Things that don't make sense... or, do they... ?
Boeing can't build an airplane that flies the way it should... or, at least, can't build one that flies without the fuel tanks being full of junk, etc. And now, with the coronavirus problem, all of their customers are going broke at an accelerating pace. Airlines are notoriously low margin and highly leveraged businesses... one of the first into the tanks in a downturn... then dropping like a rock to sit on the bottom of the pool for the duration, with the massive leverage from borrowed money to buy airplanes biting them hard. They're going BK all the time just for screwing up competitive business decisions... much less when all the customers decide its safer just to walk instead.
Airbus also builds airplanes... that currently have nothing obviously wrong with them... but, they also have issues with having airlines as customers when the market for air travel turns south...
So, which stock should be hammered the most now... given the recent viral downturn ?
Well, Boeing was ALREADY being hammered because of spectacularly bad corporate management making airplanes that crash... so having the downturn now, only helps them relative to competitors... by giving them some time to sort things out... while competitors now will struggle for reasons that aren't self induced.
But, Boeing also has a far more diversified business... as well as military sales that aren't suffering now, even as Israel just got the nod to buy 8 new Pegasus refueling tankers...
Both still have a long way to go... this is early days, still... the virus not just a "one off" that will be shrugged off when the danger is past... but more of a catalyst exposing systemic weaknesses... so the virus risk ending really won't enable stuffing that genie back in the bottle...
I got the Boeing call right, here, early on... and those long term put options from a year ago ? Wow.
Now only a question of relative advantage... the timing in taking profits... and where to put them then.
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