A 35,000-Foot Market Crash
Investing in a crash...
I fear stock market crashes. When writing about investing every week, the specter of a big crash scratches the back of your mind like a trapped rodent. One often wonders what it will take to bring stocks back to Earth... especially after a bull market that has lasted longer than almost every other one in history.
We’ve been riding too high for too long, and as a colleague once told me when I started covering the stock market, “Trees don’t grow to the sky.”
But, speaking of the sky, there is one crash I fear more: a plane crash.
Now, I’m not someone who has aviophobia. I fly a lot for work and pleasure, and I don’t get the sweaty palms and panic attacks that many do when taking off in an airplane. I have friends that need high-octane medication before boarding a 5,000-ton tube of aluminum and steel and rocketing 35,000 feet into the heavens.
After what happened this week, I can’t say I blame them...
In fact, I remember the very day that I accepted my mortality. I was on an airplane headed to Arizona to visit my younger brother in college. Everything started out fine: I was calmly reading a book in my usual window seat and sipping a cup of complimentary black, putrid coffee. All was well...
Then lightning struck — literally.
It kept striking all around the plane and the pilot — bless his calming tone and sense of confidence — got on the fuzzy, muffled address system speakers and told us to return to our seats and buckle up.
“There’s going to be a bit of turbulence ahead...”
Turbulence is a lovely euphemism to use; see “water landing” or “air pocket.” What it really means is that the plane is going to be jerking up and down in a very terrifying manner for the foreseeable future.
This is what happened to me for long enough that I finally accepted the fact that I was going to die — hopefully not on that plane — but I decided I was no longer in control of my own life.
It was honestly a peaceful feeling.
After what seemed like an eternity of rocketing up and down and lighting striking every few moments, among passengers praying and worried flight attendants strapping themselves into their seats, we reached a pocket of calm, clear skies and the plane steadied.
All was well again...
The key in these situations is to stay calm. You do yourself and others no favors by flipping out and making a scene.
That is where we’re at — literally and figuratively — with one of the best-performing stocks in my lifetime: Boeing.
Boeing is simply too big to fail.
As my colleague Jason Simpkins told his Wealth Warrior readers yesterday:
I’m not ready to bail on the company — at the very least until all the facts are in.
And that’s because Boeing is such a strong company, that I believe its long-term outlook remains bright even with this ugly cloud looming overhead.
The simple truth is, I don’t see airlines throwing billions of dollars of pending business out the window based on this incident.
Or to put it in airplane parlance, I think we’re in for turbulence, rather than a nosedive.
As I said, Boeing is the stronger half of a duopoly in the market. And it's been absolutely crushing it.
Boeing delivered 69 737 airplanes in December, alone, and set a new annual record of 806 deliveries in 2018. And it still has a backlog of 5,900 airplane orders, or about seven years of production, valued at $412 billion.
On top of that, the company recently won three major military contracts, totaling more than $18 billion combined, to build training jets, replacement helicopters, and drones that can refuel fighter jets in mid-air.
It’s also building the next Air Force One, a spacecraft to ferry astronauts to the International Space Station, and a monster rocket that NASA says will one day take them to the moon.
For those reasons, I think Boeing will ultimately be fine, even if it does have a rocky 2019.
In fact, this could even turn out to be a compelling buying opportunity.
I completely agree. In fact, my Crow’s Nest readers are still up 230% on Boeing — despite the recent horror.
If you look at a long-term investment in Boeing, you’d be kicking yourself for not investing in it 10 years ago. Here’s what you have missed out on:
That’s an 809% gain — making a $10,000 investment worth $90,877 today. If you reinvested your dividends, you’d be looking at $108,607.
While it may not appear that way right now, Boeing is a safe investment long term. There have been dips before, but they always come out ahead. If you’re an aggressive investor, I wouldn’t bat an eye at doubling down on my current position. If you’re more cautious, at the very least, watch how things shake out and look to buy low.
But we all know that smart and patient investors remain calm and collected during turbulence like this.
I trust Jason Simpkins in everything involving aerospace, defense contracting, and anything associated with huge government spending. In fact, he dedicates an entire newsletter — the Wealth Warrior — to learning how to play the short and long game with companies like Boeing.
Not only will he cover the big guys, but he has his ear to the ground when it comes to upstart defense companies that will be the next Boeings, Lockheed Martins, and General Dynamics of the world.
I urge you to give his new report, which details the new U.S. Space Force, a look. Like he said before, Boeing has a spacecraft to take astronauts to the International Space Station. It has a rocket that NASA says will take us back to the moon.
But everyone knows Boeing…
He knows companies that haven’t made the news, and you could tap into potential 2,395% gains with the small defense and space exploration company he just got back from reporting on.
And it can produce exactly what the military, NASA, and commercial, space-faring enterprises require. Investment-wise, in this case, no news is good news.
Jimmy is a managing editor for Outsider Club and the investment director of the personal finance advisory, The Crow's Nest, and cannabis stocks advisory, The Marijuana Manifesto. For more on Jimmy, check out his editor's page.
You'll Never Be On the Inside!
After getting your report, you’ll begin receiving the Outsider Club e-Letter, delivered to your inbox daily.