7 min read

✈️ Airline Stocks: Bargain or Trap?

In the next few weeks, we’ll go over some of the hottest recovery industries and stocks. Today the series will kick off with a deep dive into the airline industry.
✈️ Airline Stocks: Bargain or Trap?

Since November, I’ve been mainly writing about macro stuff. Among other things, we’ve delved into:

  • Bullcrap-yielding bonds and how they justify the record valuation of stocks
  • The effect of inflation and rising interest on stocks
  • Biden’s ambitious plan to rebuild America funded by tax hikes—and how it would affect stocks
  • The flood of stimulus money and how it could drive up inflation…or not.

I fell over myself to spice these topics up with graphics and analogies. Still, abstract and theoretical models don’t make for the most interesting read. From a selfish readership standpoint, I was better off writing about Apple and Tesla.

But when stock prices are so out of touch with fundamentals, I can’t help it. In this market, macro is king. And there’s no better proof of that than the past month:

  • Stocks are reporting the biggest earnings growth since the Great Recession and blowing away all estimates 👉 stocks sell off
  • Job growth slows down. Bad for the recovery, but on the flip side, it deters the Fed from raising interest rates 👉 stocks go up

But it’s time to shift gears a little and talk about stocks.

In the next few weeks, we’ll go over some of the hottest recovery industries and stocks. Instead of taking sides, I’ll make a bullish and bearish case for each—so you'll have a better idea what you’re betting on.

Today the series will kick off with a deep dive into the airlines industry. We’ll discuss:

  • How airlines are pulling through Covid while burning billions of dollars
  • The lofty valuations of airline stocks and what would justify them
  • The bullish and bearish cases

Let’s dig in.

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