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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: gcrispin who wrote (55628)	7/6/2015 9:10:40 PM
From: Graham Osborn	Read Replies (1) \| Respond to of 78748

Fair enough. But are you sure the DoJ investigation accounts for the decline? It's interesting how various seemingly uncorrelated cyclical companies have had legal or tax troubles recently that seem to produce reasonably correlated price behavior: So when all the negative newsflow blows over, I wonder if we're not just left with a cyclical downturn? FWIW, LUV's forward PE seems in doubt when fuel prices and interest rates can only go up. Just trying to see the forest between the trees, Graham

To: gcrispin who wrote (55628)	7/6/2015 10:11:46 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78748

airlines: I've added to AAL couple days ago. I have a losing position in AVH, and while the stock looks inexpensive to me, I've lost patience with it, and recently cut back my shares to a stub -- my belief being that I don't understand its situation vis-a-vis other airlines which look to have had better stock performance and maybe also business performance. I don't hold LUV or DAL, but I do have a basket of several others, in which AAL is the largest position.

To: gcrispin who wrote (55628)	12/10/2015 10:47:47 AM
From: gcrispin	Read Replies (1) \| Respond to of 78748

On the flip side of the KMI debacle are the airlines which will greatly benefit from the drop in jet fuel. I added a small amount to my position in LUV which I bought in July. I also own DAL and AAL. AAL is unhedged so they will benefit the most. In its 2014 annual report American noted that it would save $43 million for every $0.01 decrease per gallon in the price of jet fuel. Since the beginning of 2015, jet fuel prices have slipped $0.258 per gallon leading to fuel savings of roughly $1.1 billion on an annualized basis. The savings are even larger if the comparison is with the $3 per gallon level seen in 2014. In this case the savings would be $1.77 per gallon resulting in annualized savings of $7.6 billion. The airline sector was so bad for so long that there is a market prejudice to trusting the companies with a higher valuation that has been awarded to most transportation companies. http://www.reuters.com/article/us-airlines-iata-outlook-idUSKBN0TT0ZF20151210#qDySo4epFYmWL3mC.97 This is an interesting talk regarding market prejudices and value stocks. It was a presentation at Google by Sanjay Bakshi. dl.dropboxusercontent.com