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Looming Pilot Shortage Lowering the Bar???--Article

Lear70

JAFFO
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If you've made a total (nominal?) annualized return of 18% on average over the past 15 years, you are probably in the 99th+ percentile of all investors. You should consider a career in professional investing. Miller beats the S&P 500 for about 10 years (and he didn't even make 18% annualized) and he's legendary. You've trounced it for 15 years, a feat the vast, vast majority of professionals have not even accomplished. You're in the wrong business.
Yeah, I've heard that before, and I really think it's stupid, blind, dumb luck, good mutual funds in our 401(k) accounts, and a little piece of advice my great uncle gave me before he died (he left about $600 Million to his 3 kids and wife when he went so he knew a little something about it).

The minute I really tried to focus on it, I'd probably lose my shirt... :)

Well, if one's argument for shifting everything into foreign equities is to escape the inevitable decline (or crash or whatever) of the U.S. equity market (due to the decline of the dollar, the housing bubble, peak oil, whatever), one might want to consider a different path as foreign markets (using the EAFE as a proxy) have about a .7 correlation with U.S. equities right now, and historically have also been highly correlated. Perhaps something with a negative correlation to U.S. equities is in order if we're headed toward economic difficulty and one is seeking to avoid it?
Historically speaking, my foreign investments in small cap funds have paid more than individual U.S. stock investments, so I trust them where they're parked and they're spread out over several different sectors and currencies so I'm pretty evenly divested if one performs poorly, plus I've changed over to a more conservative strategy until things stabilize a bit (think bonds and such).
 

Andy

12/13/2012
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2 major points:

1) It is IMPOSSIBLE to time the market. Impossible. The pros can't do it. The pros don't even know other pros that can do it consistently. I said "experts" predicting 13 of the last 3 recessions tongue in cheek as many of these so called experts are charlatans who look and sound good on TV. Sorry man, not taking your advice to sell the house and sell stock. In fact, I'll be buying on the dips.

2) I have over 208 years of U.S. stock market, Bond, T-Bill, and Gold history sitting next to me on my desk that I refer to when the latest talking head talks about "the big one." The squiggly lines go down. The squiggly lines go up. And the trend has gone up overall- for 208 years. In "recent" history (the past 100 years), we've been through 2 World Wars, Vietnam, Korea, stagflation, the "nifty fifty," an internet bubble, 9/11, and that's just off the top of my head. Even if you're right about the unwinding of credit due to a housing bubble, the market (housing, stock, bond, whatever) will correct, and we'll come out the other end chugging along. Sorry, not buying economic castrophe yet considering this economy has made it through far worse.

Good luck with your predictions, though. I hope they make you a lot of money!

Keeping it off topic for a bit longer.

I don't try to time the markets. I shifted from long to short this last spring. Initially lost on the short side, but it's been extremely profitable since late May. Of course, I only went short specific sectors - home builders and mortgage originators, not the entire markets. BZH, LEN, PHM, CFC, DSL worked out well; have since closed my shorts on the home builders and CFC (not enough left there). Continue to hold short positions on DSL and have now shorted momentum stocks (AMZN, AAPL, RIMM, GOOG). The momo short isn't working yet, but I'm not an in & out trader.

If there's one stock to take a close look at shorting, it's DSL - Downey Savings and Loan. Can't short it anymore; it's on the Reg SHO threshold list, but you can still buy puts. I'd go with Feb or May 08; I'm not good at timing it in the short run, but can tell you that DSL's a zero. If you look at their monthly NPAs (nonperforming assets), assets, and interest rate spread trends, you'll see why.
And yes, I've made a lot of money this year.

I'm not calling for economic armageddon, but the vacancy rate on houses for sale is at an all time high, which will drive home prices downward for several years. We have a surplus of housing due to the amount of building done over the last seven years. If you don't mind taking an average 30% haircut on your house (according to Shiller; YMMV), stay put. That's a whole lot of equity to sit back and watch getting vaporized.
Did you notice how smooth this last week was? It's because load factors were about 10-15% below normal. Less people were traveling. There were more shoppers out this last weekend but the average shopper spent less. It's not shaping up to be a very good Christmas season.

Good luck on buying on the dips. I don't think that strategy will fare very well for a while.

ualdriver said:
If you've made a total (nominal?) annualized return of 18% on average over the past 15 years, you are probably in the 99th+ percentile of all investors. You should consider a career in professional investing. Miller beats the S&P 500 for about 10 years (and he didn't even make 18% annualized) and he's legendary. You've trounced it for 15 years, a feat the vast, vast majority of professionals have not even accomplished. You're in the wrong business.

I know this comment's aimed at Lear70, but managing a small amount of money to produce above average returns is much easier than managing a large amount of money.
Bill Miller definitely won't be beating the S&P this year. Looks like he's down a tad over 10% to date. Of course, he's been long the home builders and Countrywide. They're not what I'd consider to be value stocks.

lear70 said:
I shifted everything into international mutual funds with a nice, stable 7% growth on a 10-15 year average about 3 months ago and will likely leave them there until the housing bubble finishes popping and the dollar's decline against foreign currencies stabilizes.

You're OK going overseas for now. Watch out in 2008. The rest of the world's economy will start slowing down and I can see a case for a nasty snapback in the dollar. Right now, it's sinking like a rock, but once other central banks start cutting their interest rates, the dollar will rebound strongly. I wouldn't be surprised to see it happen in spring 2008, but it seems like my timing is usually a few months too early.
 

FLYLOW22

Well-known member
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TT
If you had (and stayed), you'd be an RJ captain in the mid 900's seniority out of 2800 pilots. You'd be getting 14-15 days off per month, 80-95K/year depending on overtime or creative bidding and 75% match on your 401(k) and at least some job security.


You deserve more for the work that you do.
 

SDF2BUF2MCO

Bird Nerd
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Adding
Keeping it off topic for a bit longer.


I'm not calling for economic armageddon, but the vacancy rate on houses for sale is at an all time high, which will drive home prices downward for several years. We have a surplus of housing due to the amount of building done over the last seven years. If you don't mind taking an average 30% haircut on your house (according to Shiller; YMMV), stay put. That's a whole lot of equity to sit back and watch getting vaporized.
Did you notice how smooth this last week was? It's because load factors were about 10-15% below normal. Less people were traveling. There were more shoppers out this last weekend but the average shopper spent less. It's not shaping up to be a very good Christmas season.

I concur on the house thing. If people have a lot of equity tied up in their house then they potentially will take a bath if they sell within the next few years. For the $40,000 millionaires who can't afford their $2,000 a month mortgage the banks will be caught holding the bag (and it will trickle down to the average Joe).
One thing that is lingering out there is the impact of increasing our "open borders" will have on the US economy - at least for the average Joe.
Getting back to wages, etc. Like others of said when they can't find enough people to fly the planes employers will get the message. If they won't increase the wages they'll lower the quals and/or find help from outside the US. The politicians will put up a gratuitous fight.
 

Crossky

A Gentleman and a bother
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Let's look at the requirements in general:

Degree - you can buy that

Certificates - can be bought

ratings - for sale

experience - can't be bought

The only part of the equation that can't be financed by rich parents or bad student loans is being tossed by the regionals. It sure as he!! isn't coming out of their pockets.

PIPE

Easy now PIPE. I totally disagree with your glass is half empty asessment. Myself, and most others like me, earned my degree, certs and ratings, with lots of effort, dedication, and comittment to acheiving those goals. Sure, my Dad and my great Aunt (neither of whom were rich by any means), and I (summer jobs) paid for it, but someone had to. But it wasn't a cake walk, and it won't be in the future. If it is, the school or flight school isn't worth it.

What's changing is the amount of 'experience' at which can competatively be hired at and become a Captain at. Whether the safety record suffers at the Regionals is a question that will be answered over time (I fear it will suffer).

If the amount of 'experience' one needs decreases the level of wet Comm ME ticket, then so be it. Every CA becomes a check airman, the training failure rates skyrocket, and the regionals improve pay, contract, QOL, and tout those features at the job fairs to attract pilots who have more experience than the 'new normal'.

I do agree that real experience can't be bought. But at least one of the two pilots will have at least 1300 more hours of 'experience' than the FNG in the right seat. All this, coming soon in an RJ in which you'll be a passenger in!
 

Captzaahlie

My kind of FOD!
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18k ?
I do agree that real experience can't be bought. But at least one of the two pilots will have at least 1300 more hours of 'experience' than the FNG in the right seat. All this, coming soon in an RJ in which you'll be a passenger in!

sad & scary!
 

atpcliff

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Hi!

I did not apply at UAL or CAL, because I didn't think the job was good enough for my situation.

cliff
GRB
 

Lear70

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I can understand UAL with all the uncertainty, but CAL???

I know the 1st year pay sucks, but they'd be about my top choice from passenger Legacy carriers to work for...
 

AQ PILOT

God I love layovers...
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And Clinton was a real help a decade ago...

GEORGE BUSH.....destroyed any leverage the unions had. Just look at the make of the NMB and legislation that he has sponsored and or supported.

And of course it seems all of the pilots I fly with support his unbalanced and unchecked approach to the free market place.

Just look at the decision his appointed judge made in regard to Trans states/gojets issue. This judge concluded that since Gojets had a different swipe key to get into their offices(which were in the same building as Trans states) meant they were a completely different and unrelated company. Allowing them the power to whip saw and bring already eroded wages down further.

Vote Democrat.....let me guess this message will be pulled because the republican Flightinfo monitors will pull it. Pay 10 dollars for a blog web site with all sorts of revenue driven ads on it.....spells greed and republican.

Probably not even relevant to the discussion at this point in the thread but...

Hey Max Powers, do you really think this is Dubya's fault? Remember Slick Willie and how helpful he was back in '97? Here's a little clip for you to help you remember...

<<By Brian KnowltonPublished: MONDAY, FEBRUARY 17, 1997

WASHINGTON: American Airlines service was nearly back to normal Sunday, a day after President Bill Clinton ordered pilots back to work. But the prospect that his action might merely delay a strike appeared certain to jostle and confuse domestic and international travel until a solution is reached.

Mr. Clinton intervened Saturday to halt a minutes-old strike at the nation's second-largest airline, appointing a board to study the dispute and postponing a walkout by American's 9,000 pilots for at least 60 days.......>>
 

atpcliff

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Hi!

The main problem for me with CAL was the commute-not too good.

cliff
BNA
 

CaptSeth

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?
Probably not even relevant to the discussion at this point in the thread but...

Hey Max Powers, do you really think this is Dubya's fault? Remember Slick Willie and how helpful he was back in '97? Here's a little clip for you to help you remember..........>>

Perhaps if the APA had not have chosen to endorse Bush Sr., an avowed anti-airline labor tool of Lorenzo, they may have had more support from the administration at the time.
 

Freight Dog

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ualdriver, I heard that the work rules for LCO are FAR's. It might be tolerable if the pay was up to par, but even pay is low.

I truly hope you guys "take it back" because the current situation for any potential new-hire is embarrassing.
 

hindsight2020

Yeah Buddy
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Any economist out there care to speculate as to why, when there is increased demand for a product and diminishing supply, the compensation/price for said product decreases?

Price Elasticity of Demand. This is clearly inelastic with respect to pilots (the buyer) and the income their jobs offer (the good being bought). Pilots treat flying an airplane almost like a parent treats the cost of a procedure to keep his kid alive(perfectly inelastic). Yeah it's making some applicants reconsider and turn away, but the majority still flock to these jobs.

It is for that reason that I don't buy that there is any dramatic diminishing in supply, which is sad but proves that if the regionals decided to not pay anything at all for the position of a pilot, many would still accept the job.

That compounds to the other problem, the opportunity cost issue. If there was a stable and reasonable probability of attaining and keeping the income attached to the jobs that people want and are in effect accepting low wages early on in their careers for, then it would be a reasonable economic move to pursue the pilot thing. But, when that is not true (anymore) then the opportunity cost is really high. (sh$tty QOL for years just to get furloughed, and now ¿unwilling? to start over = merry Xmas wife and kids, no college for you next year jr.) Once again, because of the inelasticity of demand people still do it. I do feel that if GA was affordable for the middle income earner it would help alleviate the problem. I know plenty of people who attempt to pursue flying professionally because they cannot afford to do it privately (myself included).

Will that sentiment change? Perhaps to certain degrees for some people, but most will keep chasing the carrot tied over their backs (major jobs) and continue fueling that inelasticity.

The solution? Hmm, ab initio perhaps? That would certainly kill off GA in this country though. Who knows.
 

deemee boosgkee

But it's a dry heat!
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----
Supply and demand

Price Elasticity of Demand. This is clearly inelastic with respect to pilots (the buyer) and the income their jobs offer (the good being bought). Pilots treat flying an airplane almost like a parent treats the cost of a procedure to keep his kid alive(perfectly inelastic). Yeah it's making some applicants reconsider and turn away, but the majority still flock to these jobs.

It is for that reason that I don't buy that there is any dramatic diminishing in supply, which is sad but proves that if the regionals decided to not pay anything at all for the position of a pilot, many would still accept the job.

That compounds to the other problem, the opportunity cost issue. If there was a stable and reasonable probability of attaining and keeping the income attached to the jobs that people want and are in effect accepting low wages early on in their careers for, then it would be a reasonable economic move to pursue the pilot thing. But, when that is not true (anymore) then the opportunity cost is really high. (sh$tty QOL for years just to get furloughed, and now ¿unwilling? to start over = merry Xmas wife and kids, no college for you next year jr.) Once again, because of the inelasticity of demand people still do it. I do feel that if GA was affordable for the middle income earner it would help alleviate the problem. I know plenty of people who attempt to pursue flying professionally because they cannot afford to do it privately (myself included).

Will that sentiment change? Perhaps to certain degrees for some people, but most will keep chasing the carrot tied over their backs (major jobs) and continue fueling that inelasticity.

The solution? Hmm, ab initio perhaps? That would certainly kill off GA in this country though. Who knows.

It seems that in the future it will be easier for pilots to demand higher wages since there are fewer student pilot certs issued now than 10 yrs ago (less supply) and demand for air travel in the USA according to the International Air Transport Assoc. is suppose to increase by 5.3% annually until at least 2011 (more demand)!

Clearly this will only help pilots gain leverage in raising the bar for better pay in the future.
 

deemee boosgkee

But it's a dry heat!
Joined
Apr 20, 2006
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----
Supply and demand

Price Elasticity of Demand. This is clearly inelastic with respect to pilots (the buyer) and the income their jobs offer (the good being bought). Pilots treat flying an airplane almost like a parent treats the cost of a procedure to keep his kid alive(perfectly inelastic). Yeah it's making some applicants reconsider and turn away, but the majority still flock to these jobs.

It is for that reason that I don't buy that there is any dramatic diminishing in supply, which is sad but proves that if the regionals decided to not pay anything at all for the position of a pilot, many would still accept the job.

That compounds to the other problem, the opportunity cost issue. If there was a stable and reasonable probability of attaining and keeping the income attached to the jobs that people want and are in effect accepting low wages early on in their careers for, then it would be a reasonable economic move to pursue the pilot thing. But, when that is not true (anymore) then the opportunity cost is really high. (sh$tty QOL for years just to get furloughed, and now ¿unwilling? to start over = merry Xmas wife and kids, no college for you next year jr.) Once again, because of the inelasticity of demand people still do it. I do feel that if GA was affordable for the middle income earner it would help alleviate the problem. I know plenty of people who attempt to pursue flying professionally because they cannot afford to do it privately (myself included).

Will that sentiment change? Perhaps to certain degrees for some people, but most will keep chasing the carrot tied over their backs (major jobs) and continue fueling that inelasticity.

The solution? Hmm, ab initio perhaps? That would certainly kill off GA in this country though. Who knows.

Oops double post
 

Skank

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Any economist out there care to speculate as to why, when there is increased demand for a product and diminishing supply, the compensation/price for said product decreases?

Because it's still easier to screw us for the shorfall than to get our passengers to pay for it?
 

BILL LUMBERG

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Vote however you want, but wasn't it Democratic Pres Bill Clinton who PEB'ed APA back to work. American pilots went on strike for 4 minutes before Democratic Pres Clinton ORDERED the pilots back to work... Pro labor, huh!!!

We do not have friends in the White House. Presidents won't negotiate our future agreements. The only thing airline management fears is a pilot group that is not afraid to light the match and burn the place down for a fair contract. Until then, the raping and pillaging will continue.

Well BRO...

Think about yourself and your blue-collar job next time you leave a hanging chad and your repub. pals sue everybody to change the election.......

Clinton let AA walk which is something Bush won't even let a union attempt. Negotiations were ongoing and he drops a "Nobody's striking on my watch..." so management doesn't even need to bargain.

Clinton let them strike to prove the point and then let the cooler heads to the table. The threat wasn't removed early on by a president hell-bent on screwing the worker into a minimum wage job like Bush.

Leverage is what it's about......keep on voting like you are a CEO and see what you get.....
 

BOOZENEWS

I LOVE being on top!!
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enough
Well BRO...

Think about yourself and your blue-collar job next time you leave a hanging chad and your repub. pals sue everybody to change the election.......

Clinton let AA walk which is something Bush won't even let a union attempt. Negotiations were ongoing and he drops a "Nobody's striking on my watch..." so management doesn't even need to bargain.

Clinton let them strike to prove the point and then let the cooler heads to the table. The threat wasn't removed early on by a president hell-bent on screwing the worker into a minimum wage job like Bush.

Leverage is what it's about......keep on voting like you are a CEO and see what you get.....


To be fair it was under Bush's watch that the Comair strike took place without him doing anything to intervene.

There are alternatives to striking that are will get managements attention such writing up every little glitch and playing it very safe!
 
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