Berkshire Should buy Boeing — all of it

No better home for a company that has to be in the U.S. forever. Only question / issue / holdup is whether there are labor problems long-term?

Buffett has played the last few years masterfully. Big buyback for a couple years. Now, $50 billion to work. Meanwhile, value of float increases with every tick up in interest rates. Buffett never bought bonds (now for a long, long time). Berkshire perfectly positioned for increases in interest rates, increases in inflation.

Look at Oxy (genius) but he’d never buy the whole thing — gov’t climate risk.

Look at Chevron (I like Exxon better…hope he went through the latest investor day) — Chevron keeps running. This is one of the first times in a long time that the market is aggressively following Buffett into a position — guess he just needed a hot sector.

Berkshire —- As good as ever

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I pointed this out a while back. Many here objected due to the fact that they make weapons.

I personally think that is good.

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MarginalInterest, although not related in any way to your current suggestion…

Do you remember all the chants that Buffett should buy Boeing on this forum when the price was in the high $300’s and even over $400? We had some Boeing bulls on here that simply could not be suppressed!

My how times change. Bet your suggestion won’t catch much support, but it is likely better timed than in the past.

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I would vote no if asked. I won’t be.
The culture appears to be horrendous to me.

JK

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I recommend watching “Downfall” on Netflix. Boeing has become a morally bankrupt company.

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“Many here objected due to the fact that they make weapons.”

I recall we made a Lot of money with a sizable position in General Dynamics years ago but management was stellar. I do not see us getting involved with Boeing.

Buffett buys good companies with good management. Full stop. I’m the first one to say that may have been true of Boeing at one point, but it’s debatable today whether either of those two things applies.

In recent years they have opened a plant in the South, presumably to escape the long standing union in Everett, but they made such a hash of it that multiple countries and airlines have refused to accept aircraft produced in South Carolina.

They moved headquarters away from Washington State to … Chicago? Which put them at distance from both manufacturing facilities. This is a head scratcher, isn’t it? They increased the use of contractors and suppliers, allowing headcount reduction, but that only caused more problems because the FAA is kind of strict on who does what if it goes into commercial aircraft. So instead of fewer headaches they got more. Then came supply and distribution disruption. And Covid, which stomped the brakes on the business.

After decades of producing aircraft with multiple redundancies, they began producing them with single-point-of-failure vulnerabilities which grounded their newest model for years. Boeing has lost market share to Airbus over the past five years, predating the debacle with the 737Max crashes.

Aircraft manufacture is a highly cyclical, and often unpredictable market, the opposite of what Berkshire seems to value.

While I believe there is safety in being the only major manufacturer left in the US because the Pentagon (not to mention Congress) is unlikely to let them fail, that doesn’t seem a strong enough argument for Warren to take on a massively complex, capital intensive, bet-the-farm and sometimes unprofitable business that would dwarf so much of the rest of the corporation.

Oh, I forgot to mention that Airbus just picked off two more formerly exclusive Boeing clients, so…

(As for the former management, this is the best summary I have seen:
https://discussion.fool.com/boeing-could-have-turned-it-down-inc… )

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Only question / issue / holdup is whether there are labor problems long-term?

BA is cyclical and has a significant military contract. Two things that will keep Berkshire away. Running a utility which interacts with local utility boards is very different from dealing with Pentagon for military contracts and lobbying Senators and Congressmen for budgets and projects.

The board routinely comes up with horrible suggestions, that doesn’t fit with Berkshire model nor Buffett style.

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Boeing is a fixer upper in need of good management. Not a Buffett company imo.

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