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

To: James Clarke who wrote (634)	12/6/1998 1:06:00 PM
From: cfimx	Respond to of 4691

james, I'm trying to put on Buffet's hat here. I agree that I don't think uder normal circumstances that Boeing is his kind of company. I think he might even categorize it as a "lousy" business. Also, a monkey couldn't run it (though one probably does!). It has had this duopoly position for years and hasn't been able to do much with it. It even took out a major competitor. On the other hand, it is the kind of company (mega cap) that he NEEDS to look at now. And, he still remembers his Graham so everything has a price. But my sense is that this is something that TEMPTS him, but won't ENTRAP him. Good luck with Boeing James. PS: Anyone look at Interstate Bakeries?

To: James Clarke who wrote (634)	12/6/1998 1:12:00 PM
From: peter michaelson	Read Replies (1) \| Respond to of 4691

Jim: Your reply is very gentlemanly. Thanks. Here's my non-Buffetology thinking on Boeing. Don't laugh. You can make money on Boeing. Set a target price 10% lower than the ten year peak. Wait until it gets there. Sell. It's cyclical, and fundamentally strong!!! It will get there. Peter

To: James Clarke who wrote (634)	12/6/1998 9:21:00 PM
From: Shane M	Read Replies (1) \| Respond to of 4691

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