Make some money off airline stocks?

[Otto77]

Just curious if any of you guys out there involved with either Delta or NWA etc have bought some stock up. Its awfully enticing to get some shares of delta as they are 60 cents as of today..pretty much the same for NWA. I truly feel that at least DAL will survive and could stand to make a pretty good sum of money if it even goes up to 5 bucks a share! Just wanted to know what ya'lls take is on the situation.

 

[A350]

I can't tell if you are flame baiting or whether you really believe what you plan to do.....

take it from someone who has lost more than he has made in airline stocks and has been through an airline BK.

First, DAL and NWAC stock will become worthless. Stockholders are the last ones in line as UNSECURED creditors. IOW's, everyone else gets pennies on the dollar, and the unsecured creditors get even less, if there is any of the pie left.

If you want to buy an airline stock, either save your money in a CD, or buy some LUV, JBLU, Airtran, or even LCC. But for goodness sake, don't buy ANY bankrupt companies stock. You would be better off sending me the money, because you will lose it.

A350

 

[Otto77]

true..it is extremely extremely risky and wasnt talking about investing a substantial amount...but I feel in the long run it could perhaps end up with large gains because it is on the floor right now..just throwing out the idea

 

[DornierPilot]

There is no "long run" for a bankrupt companies stock. That's the point! The day Delta emerges from bankruptcy, the stock that you are holding will become worthless, nada, nilch, $0.00. The only people that trade these stock are day traders, etc. moving lots of volume, looking for small movement. It's a game of musical chairs - the day they come out, whomever is holding the stock loses it all.

 

[skykid]

Unless you can get in and out before it becomes worthless, and you have the stomach to do that, you are throwing your money away. If you own ANY airline stock, whatever the company, and have the ability to sell I would sell it ASAP.

 

[Otto77]

Ok..i gotcha guys! Gracias

 

[lazy8s]

Delta and NWA (I still think the new paint job is funny!) will, if/when they emerge from bankruptcy, re-issue stock after everyone else is paid IWA the courts rulings. Translation: if you want to buy stock in either of these 2, buy it after they re-emerge from bankruptcy.

Take a look at USAir's stock, re-issued as USair LCC.......

My advice is to hire someone to manage your money.......

 

[Gulfstream 200]

true..it is extremely extremely risky and wasnt talking about investing a substantial amount...but I feel in the long run it could perhaps end up with large gains because it is on the floor right now..just throwing out the idea

Statiscally you have to be better off putting all that money on a number in Vegas.

Its not on the floor, its 6 ft. under the ground as DAL. Wait until it comes back as something else then you can just throw your money away a little slower....

Dont ever buy airline stock.

 

[Geronimo4497]

My advice is to donate that penny stock money to Mark's family. They will need it more than you. Just a thought.

 

[FlyBoeingJets]

true..it is extremely extremely risky and wasnt talking about investing a substantial amount...but I feel in the long run it could perhaps end up with large gains because it is on the floor right now..just throwing out the idea

Not to beat a dead horse....

The stock will probably be worthless when Delta exits BK. No one tells you this, they just assume you know. Why doesn't it trade near zero? Not sure.

Bonner lost all his money in USAir. UAL (UALAQ.OB) stock will be worth zero too. As UAL exits BK the DIP financiers and the PBGC are getting newly issued stock for the money they pony up. Even if the old stock were worth anything it would be diluted, perhaps with a reverse split, to make sure the newly created stock will be worth much more. The investors that risk financing UAL out of BK demand a big stake in the company. Previous investors are treated like dirt. Even bondholders, who are higher in the food chain, are stratified by the type of bond and often get less than 20 cents on the dollar.

If you wanted to make money bottom fishing I would would have bought AMR stock when they were considering BK. It traded under $2 before shooting up over $10.

 

[psysicx]

I made money off of skywest.

 

[Gulfstream 200]

My advice is to donate that penny stock money to Mark's family. They will need it more than you. Just a thought.

there are threads dedicated to this, you might want to post there.

 

[BR549]

I made money off of skywest.

How senior is the base in FAT?

 

[dueguard1]

Just recently purchased 130 shares of Cathay Pacific (CPCAY.PK)...I'm an amateur with the whole Scottrade thing, but seemingly they appealed to me because they have been weathering the storm if you know what I mean (In comparison to most American carriers)...and it's right at about 8 bucks and change right now per share.....Loking to make a little profit if the world economy makes a few modest strides.

 

[typhoonpilot]

The best way to make money with airline stocks is to short them. I did okay shorting NWAC in August. Looking at shorting AMR now.

TP

 

[Dave Benjamin]

I made money off of skywest.

Up about 50% since July. Thanks to a 423 plan employees will make an end of year purchase for around 15 bucks per share. If stock is 30 by then an RJ captain making 80K could see a $12,000 pre-tax profit.

 

[Cyclone]

investing

rule 1 never take investment advice from a pilot
rule 2 don't try to make money "trading" stocks...better off investing in the long haul and using a warren buffet long-term strategy of looking for deals...minimizing transaction costs...patience.

rule 3 if you want some action and want to ignore the above rules buy LUV today...it's down...it will probably pop on earnings announcements on the 20th...expect good news mainly because of the 1-3 buck increase in airline ticket prices. SWA flew ~250,000 flights the third quarter...at 80-120 pax per plane...probably will mean a 20-50 million dollar bonus over and above analyst expectations...short term pop on the good news.

 

[Traderd]

rule 1 never take investment advice from a pilot
rule 2 don't try to make money "trading" stocks...better off investing in the long haul and using a warren buffet long-term strategy of looking for deals...minimizing transaction costs...patience.

rule 3 if you want some action and want to ignore the above rules buy LUV today...it's down...it will probably pop on earnings announcements on the 20th...expect good news mainly because of the 1-3 buck increase in airline ticket prices. SWA flew ~250,000 flights the third quarter...at 80-120 pax per plane...probably will mean a 20-50 million dollar bonus over and above analyst expectations...short term pop on the good news.

As to rule #1, it appears from your profile that you are a pilot, yet you have proceeded to offer investment advice. Should he ignore your rules #2 and #3 so that he may remain in compliance with your rule #1? Is this some kind of circular logic trick?

 

[Cyclone]

i believe rule 1 and 2 are true.

i am guessing about luv on the 20th...but it could happen...anyway even if it does it won't go up more than 4-5%...barely enough to cover the buy...sell...transaction fees, etc...you have to remember when you buy and sell the "spread" is not your friend.

 

[Traderd]

i believe rule 1 and 2 are true.

i am guessing about luv on the 20th...but it could happen...anyway even if it does it won't go up more than 4-5%...barely enough to cover the buy...sell...transaction fees, etc...you have to remember when you buy and sell the "spread" is not your friend.

I'm confused about about the "4-5%...barely enough to cover..." comment. Nothing new, I confuse easily.

In general I work in terms of gains/losses in dollars as opposed to a percentage; just a habit of mine that I have used over the years. But $s are where I program my targets and stops. Obviously one can be expressed in terms of the other.

It would seem that if you buy LUV at $15.38 (the 10/18/05 Volume Weighted Average) and collected 4% a share ( what, about .61 per?), I cannot imagine how the commissions and fees could exceed that gain.

I mean 4-5% is a pretty good amount of money where I come from if you're talking a reasonable time frame. I executed several trades today and will use one as an example (It's the first one executed).

At 1102 I sold short 6000 shares of XOM with an average fill price of $58.08. I covered all open at 1545 at $56.51. 6000 shares @ $1.57 gives me $9420 before commissions and fees. My commissions for that trade were $76 and the SEC fees ran (est - waiting for settlement usually three days) about $15 (sell price x .0000418). Interest is sometimes charged on short sells, if it were to apply here I would expect a few more bucks to go towards costs. I carry sufficient captial in accounts and trade with enough volume that I do not require any broker/platform/data feed fees, but even if they are a component, amortizing a few hunred bucks a month shouldn't add more than a few pennies to the cost.

So it looks like a pretax ST gain of about $9300 (about 2.7%?). A 4% return would have given me around $13K.

I think I must be missing something in your estimate of fees and other costs because it seems like a 4% gain (we are talking gains here of course) should more than cover your costs in a trade.

And by the way, if you're right about LUV you should try your hand at being a "market analyst". You can't be any worse than those that are currently doing the job