This recap is going to be brief. I don’t know if this article was a sector piece or something else, or if it was simply because American Airlines (NYSE: AAL) was heading towards bankruptcy, I thought it was newsworthy for that reason, AND my former brother-in-law worked as a pilot at American Eagle at the time.
I was pretty proud of this article, and I encouraged my sister to share all over the place in hopes of gaining some traction, though I don’t know if that necessarily happened. Apparently, people didn’t really care about the looming bankruptcy of a once great American airline, but I digress. Here is an ancient tweet announcing the article:
It wouldn’t be the last time that I wrote about American Airlines, but I’ll skip the performance chart on those articles, since the company declared bankruptcy in November 2011 and anyone that invested lost pretty much everything. American Airlines did eventually emerge from bankruptcy and has been doing well ever since, though I see some looming headwinds – rising fuel prices chief among them – as being a reason to avoid the airline industry.
The great investor Warren Buffett once said of the airline industry: “if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.” This sentiment was based largely on his distaste for airlines after losing some money on an investment in the late 1980s. His sentiment has apparently changed, however, as he invested in a basket of major U.S. airlines (American Airlines, Delta Air Lines, United Continental, and Southwest Airlines) in 2016. I can’t follow Uncle Warren into this industry, but that doesn’t mean it is terrible. I’m just not a buyer.
Until next time…
Disclaimer: I do not own currently own shares in any of the mentioned companies, and I have no plans to purchase shares of either company within the next 60 days in any account in which I manage investment funds. You can read a little about my personal investment philosophy here.