Is Boeing in trouble? Who you believe matters.

On October 29th 2018… Lion Air flight 610 crashed into the Java Sea just after take off. Killing all 189 people on board. The downed plane was a new Boeing 737 Max 8.

On March 10th 2019… Ethiopian Flight 302 crashed, killing all 157 people on board. The plane was also a Boeing 737 Max 8.

On March 13th 2019… Canada grounds all 737 Maxs’ in their airspace.

Again on March 13th 2019… President Donald Trump’s Administration grounded ALL 737 Max 8 and 9 models.

To date, regulators in more than 20 countries and the European Union have grounded the 737 MAX! That’s pretty much the whole world if you are counting.

Not scary enough?

… Boeing 737 unsafe to fly… scathing report by pilot and software designer.

… Boeing suspends its forecast after 737 Max crashes.

… Earnings miss first quarter 2019.

… Operating cash flow drops 11%.

… Earnings fell well short of Wall Street’s estimates.

“Due to the uncertainty of the timing and conditions surrounding return to service of the 737 MAX fleet, new guidance will be issued at a future date,” the company said in its earnings release.”

On Boeing’s website, they state that the 737 MAX is their best selling airplane ever… with more than 5,000 orders from 100 different customers. It’s their “bread and butter” product that is getting “scathing” news coverage.

— — —

1 Plane

1 Company

2 Flights

20 Countries +

100 Airline customers

5,000 Booked orders

$120,000,000 Each

$600 billion in sales on the line.

…AND 346 people dead in just over a four month period.

So… what’s the future of the company behind two fatal crashes? And who should you believe?

The news, as horrible and mounting as it is? Or something else?

And look, I want to be clear with you, 346 people needlessly dying is an incredible number. And will impact thousands of families for a generation or more. In the Oklahoma City bombing 168 people needlessly lost their lives from domestic terrorism.  The 346 is more than twice that number.

You know a number is big when the size of it diminishes the pain that it has caused.  

What’s to blame?

Software. So far most of the investigation is pointing to software problems on the plane.

But this is a blog about learning how to listen to money (your money) and hear what is ACTUALLY happening. And without losing sight that real people, with real spouses and kids and loved ones lost their lives. I wanted to know what the “voice of money” thought. And not the hype machine.

I wanted to know what the price of Boeing stock thinks will happen to Boeing the company? Isn’t that interesting. There’s Boeing stock, and then there’s Boeing the company. I can only invest in the stock and not the company.

Below is a price chart of Boeing. The biggest exporter in the United States by dollars and one of the oldest companies in the Dow Jones at 103 years old.

Look below and ask yourself the following…

What is pricing telling you right now about Boeing figuring this out, getting this resolved, and moving forward?

Note that the two vertical red lines on Boeing’s four year price chart represents Lion Air’s crash and Ethiopian Air’s crash.

Why a price chart?

Price determines how your portfolio’s future will look. Not words. Or ratios. Or newsletters. PRICE. And as obvious as it might sound. There are so many nuances with price and money and investing. That knowing what to do is not enough.

Behavior cannot be taught. It has to be trained. This is why people who know a lot about investing often have worse performance over someone that was simply trained on the principles.

I’m currently in United Nations level training with my two kids. I’ve told them that I almost never want to hear the phrase “I know” come out of their mouth in regards to something they know they should be doing but have yet created the behavior around it.

If you were to follow me around during a typical school night, you might hear me saying the phrase, “I care what you do more than what you know. Knowledge is cheap.”

You see “price” is the “I care what you do part” of this conversation. Not the “I care what you know.”

And even with “the stock in free fall,” thank you Motley Fool for your “free fall” visualization in this article about Boeing. All of this “free fall” action though is happening above consolidation (consolidation is represented by the yellow shaded area in the above price chart of Boeing).

What I see right now is a company that is at all time highs. And wanting to move higher. See below what Boeing’s 45 year price history looks like. There are very few companies on the planet that have a price chart that looks this good over the past 45 years.

Heck the average public traded company in the United States is only 21 years old.

To be clear, I don’t really care which way this stock moves. Of course if I owned Boeing shares, I’d have a bias for them to move higher. But if price didn’t move higher I’d follow what price is trying to whisper in my ear.

— — —

If I would leave you with anything, it’s this…

There is a multifront war for your attention.

AND NOT ONLY do you have have to defend against 700,000 of the smartest people on the planet (Google, Facebook, Apple, Microsoft, Amazon and another 100 more). They are paying absolute top dollar to every engineer, PhD and coder to figure out how to get just one more moment of your time.

Collectively these five companies are worth more than the entire GDP of the United Kingdom. And one of them doesn’t even pay taxes.

Remember, when data gets cheap (it’s free today), attentions become expensive. The big five are not on trial here, but they are in the same business as “news” vs. “price.” News is on trial, as many think news is the filter. It’s not. Price is.

So, protect yourself. Because these companies have figured out how to avoid taxes, attract the smartest people in the room, and hijack your brain all so you click on a button.  

And they’re are not even the ones you have to be most concerned with.  The pick of the month newsletter industry has some of the highest paid writers on the planet to signal your brain that you will get hurt if you do not by their newsletter. And they are really good it at. They are better at getting you to click then you are to not click. And that is why people have five or six pick of the month newsletters that they have stopped reading.

Build a filter. Your life literally depends on it.

Listen to what your money is trying to tell you. And if listen your money is actually not whispering, its screaming.

You just have to learn how to listen to it. Because when you do, it will get you everything money can buy and everything money can’t.

Learn how to listen here.

In Your Corner,

RCPeck-Dig Signature.JPG

RC Peck, CFP

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