Chitting and Chatting About Boeing.

I’ve said before how much I enjoy the work done by Brett and Ryan over at Chit Chat Stocks. They explore a wide range of issues and break them down using really smart questions. If you aren’t familiar with them and their podcast you should change that.

I say that not just because they were kind enough to have me on to talk about Boeing. (Full episode is below.) I’m biased here, of course, but this episode is well worth a listen.

One point to emphasize here is the Shakespearean irony of the entire Boeing situation. A company that became obsessed with shareholder returns to the point where they cut corners all over the place ends up destroying shareholder value in the pursuit of those returns. Boeing stock remains down 50% from its pre-crisis highs.

It sounds weird to say you should look for companies that don’t focus on returns. Ultimately, we’re all focused on returns. But when a company obsesses over near-term returns, on making and beating the number every quarter, that tends to be a huge red flag, not a green one. If Boeing doesn’t convince you of that, just take a look at GE. (And that’s without considering outright frauds like Enron or WorldCom.)

Boeing should be a buy. One day it could be a buy. But I personally want nothing to do with it, for all of the reasons discussed here. Hope you enjoy.

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