What Were Boeing Sellers Thinking?

 | Sep 17, 2013 | 1:18 PM EDT
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Shame on those sellers in Boeing (BA). What were they thinking? That Jim McNerney wouldn't figure out the Dreamliner issues? That they wouldn't come up with a program to get to the suppliers to have them cut their costs and give Boeing a better deal?

What you are seeing right now is both higher earnings coming and a higher multiple on those earnings. Boeing's going to be in the sweet spot in 2014, with costs for each plane dropping as the assembly line works 24/7 to meet the ever-longer line to get more planes.

Think about the JP Morgan upgrade today of the airline business. It's all about the airlines being flush. And while there are some people who think that a separate AMR and US Airways (LCC) means more orders, I think it is the opposite. You get that deal done and you have a carrier that must order more and newer planes.

Meanwhile, if the price of oil doesn't come down -- and given that we learned that the Saudis are pumping out everything they can to meet demand, oil isn't coming down -- that is even better for Boeing.

At every step of the way this company's been doubted, most recently when there was a fire on a plane that wasn't even caused by Dreamliner batteries, but the shorts piled in and they are still winding down their positions.

It's always dangerous to come in on top of a stock that's already up $10 in a straight line. Maybe you get a chance tomorrow if FedEx (FDX) says some negative things. But this one's going higher between here and year end as it is the biggest of the big-caps doing well and that means everyone's got to show ownership in this one.

Random musings: When Bill Stiritz, one of the greatest investors of our time, bought $300 million worth of Herbalife (HLF) shares, that was a signal that this one's going higher on a fundamental basis not just bash-Ackman's-head-in status. Stiritz has done amazing things with all sorts of brands. He is all about making money.

He will make big money on this one.

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