Jim,
Re BA.
I don't think BA fits the mold of "Buffett" stock. The first thing I look at: In 1991 (as far as my database goes back) book value for BA was $12.14. The most recent figure I show is a book of $13.45. This company is not growing equity much for the shareholders, even during the recent years of the uptick in the business cycle. See table below.
yr book
1991 $12.14
1992 $11.26
1993 $12.59
1994 $13.73
1995 $13.21
1996 $13.94
1997 $13.16
1998 $13.45
One thing I'll grant, is that Boeing would do well to just improve their current ROE/EPS and the stock will go up, but these are not Buffett-like numbers.
One thing you've mentioned that makes sense to me is that the company should be able to produce better returns given their market power. To me, however, it signals big problems when a company with strong market share like BA can't operate at a profit. If they can get things turned around you should do well, but I haven't seen much to make me think they're getting the house in order (granted, I haven't been looking for these changes, but the occasional press release I do see seems to indicate further problems).
As you point out, this should be a good business. Long term growing demand, only 2 real players in the market space, and low fuel costs. I don't understand what the problem is in Seattle.
Shane |
