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It's one of those great mysteries to me too. If I recall, from start to end, airlines in the US as a collective whole have not made a single dollar for investors just because of the nature of the industry.
I don't doubt the utility of airlines... but its been a horrible ride for investors. Financing seems to be the primary problem, and as long as low interest rates and cheap credit exists, I think the show will go on.
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As per my post below, airlines are generally bad biz yet surprisingly Bill Miller bothered... Classic value trap or contrarian for the sake of contrarian? Something for value investors to ponder
http://www.valuebuddies.com/thread-4576-...l#pid83229
Another food for thought is why AirAsia is doing relatively well?
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29-07-2014, 10:21 AM
(This post was last modified: 29-07-2014, 10:22 AM by freedom.)
The enemy of the airline industry is government subsidy. Just look at airlines from Middle East. They are all subsidized by the petrodollar. Look at MAS, it should have bankrupted many many years ago.
Airlines in US can make quite a good profit in recent years after consolidations because domestic market is their major market and no one is subsidized by someone else. After enough consolidation, no one is going for "price war" any more, so naturally profit follows.
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(29-07-2014, 10:03 AM)specuvestor Wrote: As per my post below, airlines are generally bad biz yet surprisingly Bill Miller bothered... Classic value trap or contrarian for the sake of contrarian? Something for value investors to ponder
http://www.valuebuddies.com/thread-4576-...l#pid83229
Another food for thought is why AirAsia is doing relatively well?
I was surprised by Bill Miller interest on airliner too.
AirAsia is a good case study, which I am trying to understand, but it is a LCC, rather than a full-fared airliner.
(not vested in any airliner)
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Nothing against Bill Miller, but he doesn't really strike me a value investor. He got burned really badly investing all the way down in financials in 2007 - 2008.
Not a great guy to follow IMHO.
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(29-07-2014, 10:38 AM)theasiareport Wrote: Nothing against Bill Miller, but he doesn't really strike me a value investor. He got burned really badly investing all the way down in financials in 2007 - 2008.
Not a great guy to follow IMHO.
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Well, value investors are always investing all the way down during crisis on good stocks, aren't they? 
He has been proven right, after the crisis.
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29-07-2014, 11:07 AM
(This post was last modified: 29-07-2014, 11:08 AM by theasiareport.)
Depends on what you consider right I guess. He's done marginally better for his investors better than the index in the whole time he was in charge, net fees... and he suffered massive permanent losses of capitals in so many of his financial investments. That's certainly investing against the crowd, but is it really intelligent investing?
I have nothing against him really, just that IMHO there are much better people to follow. There are other reasons which I won't go into. But it just makes you think that if you spend 15 years doing something and barely out-perform, than...
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(29-07-2014, 10:54 AM)CityFarmer Wrote: (29-07-2014, 10:38 AM)theasiareport Wrote: Nothing against Bill Miller, but he doesn't really strike me a value investor. He got burned really badly investing all the way down in financials in 2007 - 2008.
Not a great guy to follow IMHO.
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theasiareport.com
Well, value investors are always investing all the way down during crisis on good stocks, aren't they?
He has been proven right, after the crisis.
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29-07-2014, 11:35 AM
(This post was last modified: 29-07-2014, 01:36 PM by specuvestor.)
Look at Miller's track record before GFC. Buffett doesnt have a great record 1995-00 if u choose the period
After all these years he is able to shake off the institutional imperative. That is why i respect him. Whether his value investing make sense is what i offer as food for thought
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30-07-2014, 08:14 AM
(This post was last modified: 30-07-2014, 08:15 AM by theasiareport.)
Well its certainly food for thought!
I think we probably have different view points so lets agree to disagree.
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(29-07-2014, 11:35 AM)specuvestor Wrote: Look at Miller's track record before GFC. Buffett doesnt have a great record 1995-00 if u choose the period
After all these years he is able to shake off the institutional imperative. That is why i respect him. Whether his value investing make sense is what i offer as food for thought
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How much have investors lost in the last 5 years?
[Image: chart-e1406679130859.png]
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