What will people do when it is all clear to travel? Will people go away? Or is that a chimerical wish on the part of a whole service industry dependent upon what Americans do best: spend money on travel and leisure?
These questions are at the crux of a huge number of moves, everything from Marriott (MAR) to Disney (DIS) . But the most important piece of the puzzle is the big-ticket industry that has a huge amount at stake: aerospace, specifically the airlines and Boeing (BA) , the company that makes what the airlines need if people go back to their old ways and that is a holding of my Action Alerts PLUS charitable trust.
Oddly, in a world ruled by facts, figures and spreadsheets it all comes down to two sentiments: optimism and pessimism. Will people be too scared to travel, scared of getting the disease, or will they be vaccinated and ready to roll?
I think the stock market is screaming the latter. So is the CEO of Boeing, David Calhoun, whom I spoke to Wednesday night on "Mad Money." So am I.
Are we drinking the Kool-Aid? Hear me out for a second. I want to interpret the market and to at least verify my more radically optimistic view, even if you think it more fairy tale from the Magic Kingdom.
I think we are going to have a travel boom. The disease has had an existential impact on us. It might spring a level of enthusiasm never seen before. It might cause people to say, I am missing out on life and I have a second chance to go somewhere and see things.
Whether it be cruises, or flights to exotic places, or just something different entirely, a change of scenery, it's going to happen. Remember, because the relief has not been targeted just to the needy, the same people who might want to do this have been given a once-in-a-lifetime travel voucher that will be used and used quickly.
That will give a lifeline to the airlines, which will then spawn something that airlines are wont to do when they have strong demand: buying planes. For Boeing to go back to any semblance of where it was, the airlines need to order a lot of planes, not just 737s but wide-bodies, too.
If people didn't get this additional money and they don't have time off coming, I could be wrong, but I keep thinking of what Rich Galanti, the brilliant CFO of Costco (COST) , said on the company's conference call: the discretionary cash that people have because they haven't gone anywhere is abundant. That money has been spent on a repair and renovation. I could very well switch to travel, hence why Carnival (CCL) could triple and American Airlines (AAL) can rally so far from its $13 offering on Nov. 10. That was a 38- million share deal, not small potatoes, and it was gobbled up as if it were a biotech with a wonder drug in the hopper.
So, you can bet on a Disney, with a Disney World opening: makes sense to me. Comcast (CMCSA) ? Why not, it has Universal Studios. Any of the airlines work. I am partial to Southwest (LUV) because of its fiscal conservancy.
But the best bet is Boeing. After the company took the giant equity offering off the table, you have to think it can go higher still. The stock has had a big move off the bottom, but if there is a boom, this is your chance.
Boeing's Calhoun is a loyalist, but he's never been known as anything but a realist, even telling the papers that not all the airlines can make it to the just-described promised land. I say go with him. Buy the stock. Put it away. Just like you had to do after 9/11, another time when the company was written off. Don't take it from me; take it from the market. Makes too much sense not to work.