To: Robert Douglas who wrote (652 ) 12/8/1998 7:11:00 PM From: James Clarke Read Replies (2) | Respond to
Robert, I like your BA analysis. If you really believe (I do) that you've got 10% long term unit growth. And if you believe (I do) that there are two companies that can make airplanes, and there isn't going to be another one for a long time, then Boeing may be even better than a Buffett stock, SIMPLY BECAUSE THE DEMAND IS CYCLICAL. Cyclicality gives a smart investor buying opportunities. And selling opportunities for that matter. It is unlikely you are going to get a shot to buy at a reasonable price a stock that grows at 10% every quarter, every year. But put some cyclicality into that, and you get a fear and greed cycle in the stock which you can take advantage of if you really believe the growth premise. Nike is in the same category I believe - Mr. Market has given investors spectacular investment opportunities in that one when the cycle was down. Intel has been another one, though I fear their franchise may be breaking down. The key is being able to forecast mid-cycle earnings power and value them off that. This is extremely difficult. With enough work, is it possible? I don't know yet - ask me in ten years when I can evaluate my Nike pick and my Boeing pick.
