Bespoke: Morning Lineup – Boeing Bites Both Ways

Ted

FYI: As great as things were for the DJIA when Boeing (BA), with its high price and weighting in the index, was on the way up, today the DJIA is feeling the pain of what happens when a high priced (weighted) stock in the index declines. With shares of Boeing set to open down over 10% this morning, its decline is set to have a negative impact of around 250 points (or 1%) at the open. Outside of BA, US equities are generally indicated higher following the lead of both positive starts to the week in Asia and Europe.
Regards,
Ted
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johnN

i did picked up little BA today likely hold it for long term. good stock

ron

Smart idea JohnN. Of course my position in BA goes back to 1978 and I continue to hold 40 years now.

hank

Buy BA at your own risk folks. Yes, it’s a great company with a storied tradition. But issues like this one can take years to resolve. Perhaps the cause was a completely different one than the first. We don’t know yet. But: If It should be determined to be the same or similar software issue ... than you might just have an even better buying opportunity down the road. (BTW - The change in software was dictated by a new type of larger and heavier more fuel efficient engine - likely adversely affecting CG - which may complicate any “fix”.) IMHO it’s a coin toss at this time whether this will hurt Boeing.

Here’s a summary of the rudder reversal problem which afflicted the 737 in the 90s. There were two fatal crashes and a third close call on landing approach caused by what proved to be a faulty piston actuator in the tail that on rare occasion would cause the rudder to deflect uncommanded. https://en.wikipedia.org/wiki/Boeing_737_rudder_issues

From first related crash in 1991 until final NTSB official finding of probable cause in 1999, 7 years elapsed. The flying public was more accustomed to aviation disasters in the 90s than today. More likely to ignore the issue. In today’s environment I’d expect to see some aversion to 737-MAX (and possibly all 737s). Temporary one would expect. I don’t deal in individual stocks and so have no recommendation either way on BA. (The fact that JohnN says he just bought some, however, gives me pause.)

Ted

hank: you said, "The fact that JohnN says he just bought some, however, gives me pause.)" John gets an A, you on the other hand get an F. Looks at BA's returns over the last ten years.
Regards,
Ted