I should state this plainly, although I've made money in them, I don't like airline or restaurant investments. In April '07 we had this:
"Investment legend Warren Buffet notes, “As of 1992, the money that had been made since the dawn of aviation by all of this country’s airline companies was zero. Absolutely zero.”From MarketBeat:
Lamenting his unprofitable purchase of stock in US Air, the normally sagacious Buffet quipped on the December 17, 2003 centennial anniversary of the Wright brothers’ historic flight, 'If I’d been at Kitty Hawk in 1903 when Orville Wright took off, I would have shot him down. Karl Marx couldn’t have done as much damage to capitalists as Orville did.'” There are numerous versions of this quote, this version sounds like Mr. Buffet but it may be apocryphal.
The credit market often plays the role of the prudent first-in-line to the equity market’s prodigal son, and that’s now playing out in the airline sector.
Investors have gorged on U.S. carriers’ stocks ever since oil prices turned around last week — until a predictably spastic 11% decline in the American Stock Exchange Airline Index Thursday. (Naturally, the index is up more than 5% in early trading Friday.) However, credit investors have hardly touched the paper, convinced the industry is staring at a crash landing.
“The equity markets absolutely are on drugs,” said Roger King, airline analyst at CreditSights....MORE