Time to buy Boeing?

[Tony-S]

Whether both crashes were caused by the MCAS, whether both crashes were caused by something else, or whether neither crash had anything to do with the other, it's asking a lot from your ordinary consumer to understand the fine points, or even the broad strokes of the investigation. Most were willing to write off Lion Air as a complicated incident involving a questionable discount airline. My point was simply that this now has plenty of room to turn into a situation where passengers are fearful of it or governments ground it in spite of all logic, in which case we haven't seen how low the stock can go yet.

There are many issues surrounding the 737 MAX beyond the MCAS. The reported flight profile of the Ethiopian flight has many congruencies with the Lion air flight, suggesting the MCAS was receiving faulty information from one or both of the angle of attack sensors. The lack of clarity on the modified manual override from previous 737s is an issue of contention that was also raised by, at least, the American Airlines' pilot's association. There has also been discussion of the FAA's role in certifying the 737 MAX. Boeing claimed, and the FAA acquiesced, that the MAX is just another evolution of the 737, thus its certification was less rigorous than had it been a new design. There are many aviation experts that think the redesigned MAX, principally with it larger and more forward engines, changed the aerodynamics enough that it should have gone through a more thorough certification.

With most disasters, two or more statistically unlikely events usually coincide. Perhaps this is one of those instances.

[DrGoogle2017]

The CNBC talking heads kept mentioned there’s a software fix. I don’t think there is, if there is they already fixed that before the release of this plane.

[02nz]

The CNBC talking heads kept mentioned there’s a software fix. I don’t think there is, if there is they already fixed that before the release of this plane.

There absolutely is a software update in the works: https://www.washingtonpost.com/business ... f847d434ac

It sounds like the "enhancement" would make the MCAS action less drastic.

As an aside: Where did you get the idea that software fixes only happen before products are released? Practically anything electronic these days - TVs, cars, computers, even planes - gets updates well after release, and often to fix serious problems that, yes, should have been caught during testing.

[DrGoogle2017]

The CNBC talking heads kept mentioned there’s a software fix. I don’t think there is, if there is they already fixed that before the release of this plane.

There absolutely is a software update in the works: https://www.washingtonpost.com/business ... f847d434ac

It sounds like the "enhancement" would make the MCAS action less drastic.

As an aside: Where did you get the idea that software fixes only happen before products are released? Practically anything electronic these days - TVs, cars, computers, even planes - gets updates well after release, and often to fix serious problems that, yes, should have been caught during testing.

Where did I say that software fixes only happen before products are realesed. Please don’t put words into my mouth. I was a software engineer before I retired for goodnesssake. I said I don’t think this is a software fix because they mentioned pilots have to manually override the control. Here is a link for more info on this.

https://theaircurrent.com/aviation-safe ... cas-jt610/

[shawcroft]

I've never been successful in catching a falling knife. For those who have such expertise, may The Force be with you!
Shawcroft

[LadyGeek]

Although this is an unfortunate situation, conjecture on the accident is derailing the discussion. Please to stay focused on the investing aspects.

[Church Lady]

As of today's close, Boeing yields 2.05% vs SPY at 1.89%. Not much of a premium to hold BA until the dust settles, in my opinion.

If it crashes (sorry!) through support at 359 or so, the next stop is 300. As recently as December, it traded at its 52 week low of 241.16.

Maybe all the bad news is already 'baked in' . Or maybe another shoe is about to drop. Who knows?

Let's not forget to keep the victims and their families in our thoughts and prayers.

[CurlyDave]

Buy Boeing? I want to sell! I'm trying to unload my 25 year old Boeing stock and move it into index funds (taxable account), but the capital gains give me the willies.

Another reason to stick with index funds in my next life: you don't get stuck with appreciated stock that is expensive to liquidate.

I am curious why you feel index funds would result in less capital gains tax than individual stock?

There is no such thing as getting "stuck" with appreciated stock that is expensive to liquidate. You might have to pay capital gains tax on the sale, but this is the price for great appreciation.

If you really want to avoid the capital gains tax, you can dispose of the stock in other ways.

We put about $20k in AAPL back in 2005. We have given appreciated shares to our kids who have incomes low enough that their capital gains rate is zero. So far that $20k has turned unto two house down payments, two new cars, and private school for our grandkids. And, we still have most of the stock left. Now tell me again how we would have been better off buying index funds...

I believe in index funds, but have some fun money and hit a good one every once in a while.

[jminv]

The time to buy would probably be if the FAA decided to ground the planes in question, following many other regulators. The problem with that is if the home country regulator decided to ground the planes, the problem could be worse than expected, remaining confidence could be lost in the near term, and further downside could be an eventuality. I followed this when it happened and expected BA to open low and close a bit higher than the low after the first day. That happened. You could have made money there. I also thought there would probably be at least a few regulators that grounded the plane so I didn't want to play with a day frame. With the cascading regulatory issues, I would generally expect BA to either come out with a very quick resolution or the FAA to go with the tide and ground the planes. No regulator wants to be the last one standing if an event occurs that leads to a public relations problem.

[CurlyDave]

...Why do people keep asking about Boeing? Do they think they know more about the company than everyone else in the market?

That is a common question. For me, the answer has significant complexity.

No, I don't know more than everyone else in the market. In fact, as an individual I probably know less than at least some people in the market. BUT I process the information I do have differently than the other people in the market.

Personally, I am going to pass on BA with my fun money, but there is a famous quote I believe in about the time to buy is "when there is blood running in the streets."

If BA fell by 30%, and I was convinced of their long-term prospects in aerospace, that could represent a buying opportunity.

[Wiggums]

Why do people keep asking about Boeing? Do they think they know more about the company than everyone else in the market?

I don't have any individual stocks, however, Boeing sells services which is an important revenue stream. They have a pretty good track record and many orders to fill. they, to a certain extent, self certify the planes. It does not appear that the government does not perform extensive, independent testing. All reasons why Boeing stock does well over a long timeframe.

Not something that interests me though...

[StandingRock]

I doubt they will fail as a going concern for the foreseeable future, but I have no idea what the stock price will do. I'm not interested in buying their stock anyway so what do I care lol.

[Kitty Telltales]

Profiting on a crash causing fatalities? Even if I was ok with stock picking, I wouldn’t buy Boeing right now.

I agree! After hearing about the deaths of so many, my first thought wasn't, "Can I make money off of this stock?" I was only surprised that I had to scroll so far down the thread to find a similar opinion.

[TNWoods]

Ditto all the comments about buying individual stocks...

Having said that, however, when an individual stock "goes on sale", and you are tempted to take advantage of the opportunity, you must clearly understand WHY it went on sale.

Back in 2008 I had a big wad of cash most of the year from a cash out refi of my home, and had not been exposed to the Boglehead 3-fund ideas, and so I was looking for individual stock opportunities. That fall there were suddenly hundreds of stocks on sale. I did a ton of research, reading, asking questions, and took my time, and ended up picking several that I thought were on sale, NOT because the companies themselves had done something wrong, but because they were victims of the massive panic/selloff/market exit. So I judged them to be strong enough to weather the crash, and eventually come out strong and recover all lost value at that point. I was right about several, wrong about a couple. Over 90% of the value of that portfolio now is made of long term cap gains.

But this current sale on Boeing stock is NOT due to "prevailing market and economic conditions that affect stocks broadly".

It is because 2 of their planes crashed, and many pilots have commented on a specific flaw they have had to take counter-measures to in order to prevent their planes from crashing too.

So this sale on Boeing is probably a bad time to buy.

Thought experiment: "What would happen to Boeing if another plane goes down?"

TNWoods

[HomerJ]

From what I've heard, it's more of a training issue with pilots in some countries. That doesn't mean that they won't go with a technical solution requiring updates.

That's certainly the position Boeing took with Lion Air, causing Lion Air to all but go to war with Boeing for trying to pin it on them.

https://www.ndtv.com/world-news/the-man ... ke-1964157

Now that it's happened again at a more reputable global airline, with witnesses apparently reporting smoke and luggage pouring out of the back of the plane on the way down, those claims may come back to haunt them and do some lasting damage to the brand.

My sense is that China is capitalizing on it as an opportunity to promote their competing aircraft and break into Boeing's territory in emerging markets. Still, I don't think anyone can say if this is a good time to buy or not. If customers start cancelling 737 MAX orders, then you might see the real low.

The whole thing is ridiculous. Two crashes can certainly be coincidence, not a pattern, and smoke and luggage pouring out of the back of the plane do not indicate a software problem, so we may be talking about two completely different events.

Buying the stock would just be gambling, until we know what actually happened.

[barnaclebob]

Profiting on a crash causing fatalities? Even if I was ok with stock picking, I wouldn’t buy Boeing right now.

I agree! After hearing about the deaths of so many, my first thought wasn't, "Can I make money off of this stock?" I was only surprised that I had to scroll so far down the thread to find a similar opinion.

I would think of it more as profiting off those who don't understand the aerospace industry.

[Admiral]

Just buy the Dow, Boeing is the largest stock there by market price anyway.

Me, I'm happy with my TSM!

[fposte]

Buy Boeing? I want to sell! I'm trying to unload my 25 year old Boeing stock and move it into index funds (taxable account), but the capital gains give me the willies.

Another reason to stick with index funds in my next life: you don't get stuck with appreciated stock that is expensive to liquidate.

I am curious why you feel index funds would result in less capital gains tax than individual stock?

There is no such thing as getting "stuck" with appreciated stock that is expensive to liquidate. You might have to pay capital gains tax on the sale, but this is the price for great appreciation.

But that's what calmaniac is saying. He's stuck with big capital gains if he liquidates. (I didn't get the part about less capital gains in index funds either, though.)

It's a good problem to have, along the line of having big RMDs, but it's still a problem to be negotiated. When I moved away from a not-bad, very old-school advisor who had me only in single stocks, I had a lot of stocks with unrealized gains. I've liquidated some, put others in my DAF, and amassed a diversified index-based portfolio in tax-advantaged and from the proceeds in taxable, but I still have more single stocks than I'd like. I don't dislike them so much that I'm willing to take the considerable tax hit to liquidate all of them at once, though, so I will have some Boeing and a dozen others for a while yet.

[Phineas J. Whoopee]

I neither bought nor sold, but my stake in Boeing went down in line with its decline relative to the rest of the market.
PJW

[spectec]

I think you should buy Boeing when it hits bottom, hold it until it goes up a lot, then sell it. If is isn't going to go up a lot, don't buy it. Simple way to make a bundle.

[Fieldsy1024]

I'll wait to buy back when I hear what contracts are 100% proof. For now I have 10%, but I'd like it to drop to about 350 and might put in 25%.

[CyclingDuo]

I'll wait to buy back when I hear what contracts are 100% proof. For now I have 10%, but I'd like it to drop to about 350 and might put in 25%.

Christmas Eve was the real gift.

[uberme]

Meh, the price was way lower in December / January. Low in Dec was $293

[Grt2bOutdoors]

Profiting on a crash causing fatalities? Even if I was ok with stock picking, I wouldn’t buy Boeing right now.

I agree! After hearing about the deaths of so many, my first thought wasn't, "Can I make money off of this stock?" I was only surprised that I had to scroll so far down the thread to find a similar opinion.

When you buy an index fund, how is that any different? The index is down because of either perceived or actual bad news and you buy it to profit into the future. No one is thinking or saying that people have suffered or died, let’s buy. They are looking at the effect on a specific company and the potential for profit into the future. Kind of hypocritical to be pointing fingers when in reality anyone holding a large cap or total market cap index also owns Boeing.

[Fieldsy1024]

Profiting on a crash causing fatalities? Even if I was ok with stock picking, I wouldn’t buy Boeing right now.

I agree! After hearing about the deaths of so many, my first thought wasn't, "Can I make money off of this stock?" I was only surprised that I had to scroll so far down the thread to find a similar opinion.

When you buy an index fund, how is that any different? The index is down because of either perceived or actual bad news and you buy it to profit into the future. No one is thinking or saying that people have suffered or died, let’s buy. They are looking at the effect on a specific company and the potential for profit into the future. Kind of hypocritical to be pointing fingers when in reality anyone holding a large cap or total market cap index also owns Boeing.

Haha. I guess people shouldn't buy anything index. I agree with you.