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Buying Shares In Aviation  
User currently offlinetara23 From Australia, joined Jun 2013, 7 posts, RR: 0
Posted (1 year 2 months 4 days 11 hours ago) and read 1598 times:

Hello everyone,

Iv been thinking about getting into buying shares in aviation. I understand that boeing is on the share market but I wondered if airbus was too?

Has anyone had any experience with buying shares in aviation and which sector did you buy into? Airliners/manufacturers e.t.c

Thank you to anyone for your responses.

29 replies: All unread, showing first 25:
 
User currently offlineflyingturtle From Switzerland, joined Oct 2011, 2403 posts, RR: 13
Reply 1, posted (1 year 2 months 4 days 8 hours ago) and read 1580 times:

A friend of mine who studies economics told me not to invest in airlines or in the big airplane producers like Airbus (EADS) or Boeing. Those shares are frequently traded, the market is efficient, and everybody knows everything about these big ones. Because industry forecasts, the upcoming product portfolio and problems in manufacturing/delivering airplanes are quickly communicated (even on airliners.net), you do not have a real advantage against other traders when trading these shares.

I suggest analyzing manufacturing suppliers (like comms and nav equipment, safety equipment etc.) or small enterprises (Pilatus, Beech, Cessna, Bell, Alenia...) to see if they are currently undervalued, or if they offer have promising products in the near future.

Boeing or Airbus? Run like hell. Their markets are so saturated, the competition is so fierce, so that they do not reliably bring in large profits compared to the company size.



David

[Edited 2013-07-14 05:25:08]


Keeping calm is terrorism against those who want to live in fear.
User currently offlinekiwiinoz From New Zealand, joined Oct 2005, 2165 posts, RR: 5
Reply 2, posted (1 year 2 months 3 days 12 hours ago) and read 1504 times:

I had airline stocks for a while and they did OK. I tried to stick with anything tied to China, where all of the potential growth is.

China Southern is listed on the US stock market, (ZNH), and looks a good price at the moment at $19.55.

Boeing stocks also probably OK for the short term as there will be some uside to the price once the fire hysteria dies down


User currently offlineHywel From Uganda, joined Apr 2008, 802 posts, RR: 3
Reply 3, posted (1 year 2 months 3 days 10 hours ago) and read 1475 times:

Yes, I've had shares in easyJet and Ryanair for about a year now. They've had huge growth (easyJet is up 146% in 12 months) and I've been able to make large profits. Just sold a large bunch and taken out the cash, even though they'd grow more if I left them.

User currently offlinetara23 From Australia, joined Jun 2013, 7 posts, RR: 0
Reply 4, posted (1 year 2 months 3 days 9 hours ago) and read 1463 times:

That's

Quoting Hywel (Reply 3):

That's great news for you. The only other thing I'm not sure about is how do you actually buy shares? Iv been on
the net but can't seem to find exactly how to invest...


User currently offlineHywel From Uganda, joined Apr 2008, 802 posts, RR: 3
Reply 5, posted (1 year 2 months 3 days 9 hours ago) and read 1454 times:

Quoting tara23 (Reply 4):
That's great news for you. The only other thing I'm not sure about is how do you actually buy shares? Iv been on
the net but can't seem to find exactly how to invest...

I don't know how it works in Australia, but in the UK there are various online stockbrokers where you can buy/sell shares. They charge around £10 in fees for each transaction. I use Hargreaves Lansdown and they have a good mobile app to manage your portfolio:

http://www.hl.co.uk

I'd just advise you to research carefully. When I first started trading in stocks/shares, I had an introductory offer of no fees for the first month, so I bought tiny amounts (£20 here, £10 there). Some of them completely collapsed - I bought £20 of shares in a South American oil exploration company that was rumoured to be on the verge of huge success, and now those shares are worth nothing. Luckily I hadn't put a grand into it. The others more than made up for the losses though.

Airline stocks CAN be risky - if there was another oil crisis, major terrorism incident or aircraft crash, the share price could plummet.


User currently offlinePyrex From Portugal, joined Aug 2005, 4022 posts, RR: 28
Reply 6, posted (1 year 2 months 3 days 8 hours ago) and read 1420 times:

Quoting tara23 (Reply 4):
The only other thing I'm not sure about is how do you actually buy shares? Iv been on
the net but can't seem to find exactly how to invest..

No offense to you, but that probably means you shouldn't be buying shares in the first place, let alone in something as volatile as airlines (which are dominated by traders / momentum plays, as no-one in their right mind would invest in them for the long haul).



Read this very carefully, I shall write this only once!
User currently offlineHywel From Uganda, joined Apr 2008, 802 posts, RR: 3
Reply 7, posted (1 year 2 months 3 days 8 hours ago) and read 1416 times:

Quoting Pyrex (Reply 6):
No offense to you, but that probably means you shouldn't be buying shares in the first place, let alone in something as volatile as airlines (which are dominated by traders / momentum plays, as no-one in their right mind would invest in them for the long haul).

But there's always time to learn and start. I did extensive research and read many books before starting to dip my fingers into the stock market. You can't just start trading without prior research.


User currently offlinePPVRA From Brazil, joined Nov 2004, 8964 posts, RR: 39
Reply 8, posted (1 year 2 months 3 days 1 hour ago) and read 1339 times:

Quoting flyingturtle (Reply 1):
A friend of mine who studies economics told me not to invest in airlines or in the big airplane producers like Airbus (EADS) or Boeing. Those shares are frequently traded, the market is efficient, and everybody knows everything about these big ones. Because industry forecasts, the upcoming product portfolio and problems in manufacturing/delivering airplanes are quickly communicated (even on airliners.net), you do not have a real advantage against other traders when trading these shares.
Quoting flyingturtle (Reply 1):
Boeing or Airbus? Run like hell. Their markets are so saturated, the competition is so fierce, so that they do not reliably bring in large profits compared to the company size.

Advantage against other traders? This isn't the olympics!

Buying smaller companies might be more profitable, but with higher profit comes higher risk. Boeing, being a "large cap" company, has a different - i.e., lower - risk profile than many of their suppliers.



"If goods do not cross borders, soldiers will" - Frederic Bastiat
User currently offlinejohns624 From United States of America, joined Jul 2008, 923 posts, RR: 0
Reply 9, posted (1 year 2 months 3 days 1 hour ago) and read 1335 times:

If he's new into investing, he probably should start with mutual funds.

User currently offlinestlgph From United States of America, joined Oct 2004, 9365 posts, RR: 26
Reply 10, posted (1 year 2 months 3 days ago) and read 1327 times:

I've bought into carefully select airlines and I've bought into small cap company stocks which are part of the 'greater' supply chain. I definitely recommend doing your homework and looking into those.


if assumptions could fly, airliners.net would be the world's busiest airport
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 11, posted (1 year 2 months 3 days ago) and read 1320 times:

Quoting tara23 (Thread starter):

I don't want to discourage you but based on your questions you're not ready to invest in the stock market. My suggestion is you start by making "fake" trades to get your toes wet about how it works. Do a virtual valet of the size you plan to invest and make fake trades and see how you do before you put real money behind it.


User currently offlineWestJet747 From Canada, joined Aug 2011, 1833 posts, RR: 10
Reply 12, posted (1 year 2 months 3 days ago) and read 1310 times:

tara23, for the love of god, do NOT put all your money (however little it may be) in aviation. The first thing I was taught in finance is to always diversify your portfolio. The market is cyclical, and different sectors are hit at different times. The best way to not get ruined by a particularly awful down period is to make sure you spread your money around a little, because often when one industry in a downturn, another will be having some degree of success.

Quoting flyingturtle (Reply 1):
Boeing or Airbus? Run like hell. Their markets are so saturated, the competition is so fierce, so that they do not reliably bring in large profits compared to the company size.

On the contrary, Boeing Corporation and EADS are blue-chip buys who are consistently profitable. You're looking too much at them from a commercial aviation standpoint and forgetting that their success is driven by fiercely profitable military/defense divisions (margins being in the area of 10% last I heard).

Quoting Pyrex (Reply 6):
No offense to you, but that probably means you shouldn't be buying shares in the first place

Everybody needs to start somewhere. There have been people wildly successful in the game who have far less education than you or I. Of course many times it's the result of luck rather than a solid strategy, but not always.

My advice to tara23 would be to make use of the free resources available on the internet to at least get a base knowledge of trading first. Getting one of those "For Dummies" books wouldn't even be a bad idea either. "Learning the hard way" can be very damaging when it comes to trading.

Quoting PPVRA (Reply 8):
Advantage against other traders? This isn't the olympics!

It definitely is. There are generally three broad ways to have success in the stock market:

1. Have a good hold strategy and a lot of patience.
2. Be diligent in making trades based on information before speculators come and mess things up for everyone.
3. Get lucky as a speculator (not recommended).

If you have an advantage over the millions of speculators out there, you'll do just fine.

Quoting cmf (Reply 11):
My suggestion is you start by making "fake" trades to get your toes wet about how it works.

This. (thumbsup)

I recommend MarketWatch and [url=www.wallstreetsurvivor.com]Wall Street Survivor[/url]. Conveniently, they're usually the first two that pop up in a Google search for virtual stock exchanges.



Flying refined.
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6608 posts, RR: 24
Reply 13, posted (1 year 2 months 3 days ago) and read 1309 times:

Quoting flyingturtle (Reply 1):
Boeing or Airbus? Run like hell. Their markets are so saturated, the competition is so fierce, so that they do not reliably bring in large profits compared to the company size.

Not totally true. I've made very good money on my EADS (Airbus parent) stock over the past year. In fact, EADS stock has well out-performed the broader market over the past few years. It is up 50% compared to one year ago. Not to mention the EADS stock also pays a dividend which makes the return even better.

Note, I'm not necessarily recommending you buy EADS at this time as much of the room for the stock to go up has probably been exhausted.

Quoting flyingturtle (Reply 1):
A friend of mine who studies economics told me not to invest in airlines or in the big airplane producers like Airbus (EADS) or Boeing. Those shares are frequently traded, the market is efficient, and everybody knows everything about these big ones.

No offense to your friend, but the reasons listed don't necessarily mean that EADS or Boeing are a bad investment.

Now, I don't necessarily recommend airlines or aviation stocks for a first time investor. However, there is money that can be made in these stocks and anyone who says otherwise hasn't done their research.


User currently offlinePPVRA From Brazil, joined Nov 2004, 8964 posts, RR: 39
Reply 14, posted (1 year 2 months 2 days 23 hours ago) and read 1284 times:

Quoting WestJet747 (Reply 12):
Quoting PPVRA (Reply 8):
Advantage against other traders? This isn't the olympics!

It definitely is. There are generally three broad ways to have success in the stock market:

1. Have a good hold strategy and a lot of patience.
2. Be diligent in making trades based on information before speculators come and mess things up for everyone.
3. Get lucky as a speculator (not recommended).

If you have an advantage over the millions of speculators out there, you'll do just fine.

If you take the approach that investing is a race and you are competing with other investors to see who makes more money, you are going to end up taking high risks and probably lose money.



"If goods do not cross borders, soldiers will" - Frederic Bastiat
User currently offlineWestJet747 From Canada, joined Aug 2011, 1833 posts, RR: 10
Reply 15, posted (1 year 2 months 2 days 22 hours ago) and read 1273 times:

Quoting PPVRA (Reply 14):
If you take the approach that investing is a race and you are competing with other investors to see who makes more money, you are going to end up taking high risks and probably lose money.

It has nothing to do with trying to make more money than the next guy, it's about being smarter than the next guy to make sure you don't lose money. Your comment seemed to suggest complacency, which will always make you a loser in the stock market.

Also, it's a misnomer to say that high risks will probably make you lose money. The stock market is inherently risky, and there's a right way and a wrong way to manage that risk. The right way would be by making trades that meet your own self-designed criteria (which goes back to being smarter than the next guy to design more effective criteria). The wrong way would be to trade because you say "I've got a good feeling about this one!" (which would make you a speculator).



Flying refined.
User currently offlineAlias1024 From United States of America, joined Oct 2004, 2760 posts, RR: 2
Reply 16, posted (1 year 2 months 2 days 21 hours ago) and read 1257 times:

Quoting tara23 (Reply 4):
The only other thing I'm not sure about is how do you actually buy shares? Iv been on
the net but can't seem to find exactly how to invest...


It sounds like you need to do a lot more research before jumping into the stock market. Head down to the library and pick up a couple books on investing and trading (they're two different things) and learn as much as you can. Try to decide what your goals are and find a trading or investing strategy that matches your temperament, risk tolerance, and those goals.

Once you've got some basic footing for how the market works and what you want to do, find a broker, fund your account, and start looking for opportunities. If you are going to be an active trader, I'd recommend paper trading first, which others have already mentioned. You'll learn a ton about not just the market, but about yourself, as often your own emotions and temperament can be your biggest enemy.



It is a mistake to think you can solve any major problems with just potatoes.
User currently offlineHywel From Uganda, joined Apr 2008, 802 posts, RR: 3
Reply 17, posted (1 year 2 months 2 days 21 hours ago) and read 1253 times:

Another major piece of advice is this:

Never, ever buy shares because a newspaper column or website has “tipped” them to be a good buy – always make your own informed decisions. Six months ago a big newspaper in the UK tipped a company (who I won't name) to be “achieving strong growth in the next few months”, with a strong buy recommendation, claiming there were no obstacles to growth. I had severe doubts after doing some independent research so didn't buy in.

Now their share price has fallen 142% in 6 months – it will undoubtedly recover for long-term investors, but anyone hoping to make some quick money will have been left bitterly disappointed. I wonder how many armchair investors bought shares after reading the newspaper that day...


User currently onlineeinsteinboricua From Puerto Rico, joined Apr 2010, 3094 posts, RR: 8
Reply 18, posted (1 year 2 months 2 days 19 hours ago) and read 1226 times:

If there's something I've noticed is that airline stocks are very volatile. A rise in oil prices can send them plummeting. I would invest in Boeing or Airbus.


"You haven't seen a tree until you've seen its shadow from the sky."
User currently offlineAesma From France, joined Nov 2009, 6651 posts, RR: 11
Reply 19, posted (1 year 2 months 2 days 18 hours ago) and read 1220 times:

I know the answer to your questions and have never had a share or investment to my name. More leg work definitely needed.

As for airlines, as some say, the best way to become a millionaire with an airline is to start as a billionaire !



New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
User currently offlinehOmSAr From United States of America, joined Jan 2010, 1183 posts, RR: 0
Reply 20, posted (1 year 2 months 2 days 18 hours ago) and read 1211 times:

Quoting Hywel (Reply 17):
Now their share price has fallen 142% in 6 months

How, exactly, does a stock fall more than 100%?

Do the shareholders now owe money for each share they own?



I was raised by a cup of coffee.
User currently offlinePPVRA From Brazil, joined Nov 2004, 8964 posts, RR: 39
Reply 21, posted (1 year 2 months 2 days 18 hours ago) and read 1208 times:

Quoting WestJet747 (Reply 15):
The right way would be by making trades that meet your own self-designed criteria (which goes back to being smarter than the next guy to design more effective criteria).

What flyingturtle said about large companies having thinner margins because a lot of people are monitoring, analyzing and trading them constantly is true, but that fact does not mean you should stay away from them. Staying away from them simply because of this does not mean you are being smarter.

What I meant with my statement is what you just alluded to: you must create a custom strategy based on your risk tolerances and stick to it.



"If goods do not cross borders, soldiers will" - Frederic Bastiat
User currently offlinePyrex From Portugal, joined Aug 2005, 4022 posts, RR: 28
Reply 22, posted (1 year 2 months 2 days 16 hours ago) and read 1187 times:

Quoting Hywel (Reply 7):
But there's always time to learn and start. I did extensive research and read many books before starting to dip my fingers into the stock market. You can't just start trading without prior research.

I am a professional in the finance sector who knows the fundamentals of how to evaluate a share and the fact is that I don't do it for yself. I truly believe that, if protections of retail investors had any teeth, most individual investors would only be allowed to buy mutual funds and ETFs (and if they do or not does not really affect me personally, so am not being self-serving here). Being able to analyze all the information there is about one single company to make an informed investment is a huge time commitment, and requires constant monitoring. Now multiply that by the dozens of different securities you would need to look at to have an even remotely diversified portfolio and there is simply no way a single person can do it, even if you don't have a job and dedicate yourself full time to this. Not to mention that, as a small investor, to achieve the required level of diversification buying individual securities on a small portfolio you would get eaten alive by fees and spreads, even if you use a discount brokerage.

Quoting Aesma (Reply 19):
As for airlines, as some say, the best way to become a millionaire with an airline is to start as a billionaire !

That has always been, and still is the case. Airlines aren't so much businesses but vast destroyers of capital.

Quoting hOmSAr (Reply 20):
How, exactly, does a stock fall more than 100%?

Do the shareholders now owe money for each share they own?

Was thinking the exact same thing. As far as I am aware assessable shares went the way of the dodo a long time ago.



Read this very carefully, I shall write this only once!
User currently offlineWestJet747 From Canada, joined Aug 2011, 1833 posts, RR: 10
Reply 23, posted (1 year 2 months 2 days 15 hours ago) and read 1179 times:

Quoting hOmSAr (Reply 20):
How, exactly, does a stock fall more than 100%?

They can fall more than 100% from the purchase price.

For example, Hywel could have bought the share at $100 twelve months ago. Six months later it peaked at $150. It then crashed to its current price of $8. Therefore, it fell 142% (of the purchase price).

Quoting PPVRA (Reply 21):
What flyingturtle said about large companies having thinner margins because a lot of people are monitoring, analyzing and trading them constantly is true, but that fact does not mean you should stay away from them. Staying away from them simply because of this does not mean you are being smarter.

I was one of the posters saying the opposite. I never suggested they stay away from them.

I think we may be arguing about two different things   

Quoting Pyrex (Reply 22):
Was thinking the exact same thing. As far as I am aware assessable shares went the way of the dodo a long time ago.


I thought assessable shares couldn't "fall" more than 100% since the money owing to the company was simply to recover market value of the stock since the shares were sold at discount?   



Flying refined.
User currently offlineHywel From Uganda, joined Apr 2008, 802 posts, RR: 3
Reply 24, posted (1 year 2 months 2 days 11 hours ago) and read 1157 times:



Quoting WestJet747 (Reply 23):
They can fall more than 100% from the purchase price.

For example, Hywel could have bought the share at $100 twelve months ago. Six months later it peaked at $150. It then crashed to its current price of $8. Therefore, it fell 142% (of the purchase price).

What WestJet747 said. I didn't actually buy any shares in this company though.

[Edited 2013-07-16 02:55:56]

25 tara23 : That's great thank you so much for all your feedback (and none offence taken) The reason I posted this topic in the first place is because you HAVE to
26 hOmSAr : That's kind of convoluted logic, because it requires two different reference points. Using your example, I'd either say the stock dropped 92% (if usi
27 Post contains images zkojq : Welcome to airliners.net Initially at least, I wouldn't recommend buying shares in foreign companies as it will involve dealing in other currencies an
28 Alias1024 : Get more than one. Every author will have their own ideas, biases, and way of finding companies to purchase. Also, the six month time frame will only
29 Post contains images WestJet747 : Hey, don't shoot the messenger. I was just providing a possible explanation But, if something goes down more than 100%, it's only negative assuming a
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