Stock Price Question

meyers9163

meyers9163

Well-Known Member
So obviously things are starting to look, "better" as of right now. With the Dow being roughly 9111 as of 1130 EST it has me wondering if this will indeed be a good indication of a recovery if it reaches the 10,000 mark? I keep hearing the 10,000 mark is a key, but know very little with that that would make a large impact on the airlines and thus our jobs.... It got me wondering for those of you who have been in this game for a while, what the lowest you have viewed the DOW get down to and how that played into the state of the industry? And also the opposite, the highest you've personally viewed the DOW and the state of the industry during that time.....

Obviously I know business men and women alike will travel more with a better market... But with not really being a fiance man, it had my mind wondering today as I watch these stocks and thus DOW, S&P, and other markets climb yet unemployment continues to do the same...
 
It's just an arbitrary number, it will only make a difference if people keep saying it will and investors / creditors believe it will.
 
Q2 1992 - I start flying. There were no jobs to be had as my furloughed former Midway CA who is my instructor will attest: Dow 3271

Q3 1994: I start freshman year of college. Job outlook, meh. route is still CFIing for 135 mins, then hope to get a job flying ratted out charter whips. Dow: 3834

Q2 1996: I get my first jobs in Aviation: 1) Washing/waxing airplanes for the university. 2) CFIing for the Univeristy 3) Customer Service at the FBO 4) occasional CFI deal at FBO. Things are moving. People are leaving instructing for turboprop commuters, Mesaba is a popular choice. Dow: 5882

Q2 1998: I graduate with an aviation degree. Jobs are opening up at a rapid pace. Some crapwagon Tprop operator in IND looks to hire us with low time. Dow 9181

Q2 1999: CHQ gets it's first jet. Mainline pilots all over are flipping us off and calling us scabs. A trend for the next 8 years. Dow: 10336

Q3 2001: Terrorists act the fool. Airlines were in peril anyway, so they use "Force Majure" to slash and burn pilot groups. Dow 10021

Q4 2002: Someone's a Captain.....and dumps the full 15% into 401k. Dow ~8000

Q3 2007: I leave the commuter, there's hiring in all quadrants. Housing bubble is going down. Most FOs I'm checking out have less than 1k TT, and more likely closer to 500 TT like I had when I started. Dow: 13264

Q3 2008: I've had less than a year at my current job and fear getting laid off. A bunch of folks bought stuff they can't afford and the chicken is coming home to roost. No jobs in sight. My 401k loses about 40% Dow: 8776

Q1 2009: Dow bottoms at around 7608. We may not need to wait for 12/12/12 for the world to end, depending on to whom you listen.

Q2 2009: The worst appears to be over. I don't have the fear of working until I'm 105, since I've recouped most of my 401k losses. Things, while bleak are starting to flatten out. Jobs are still pretty tight for the foreseeable future. Dow: 9712

As to the other part of your question, cuts. There were cuts going on and "downsizing" and "outsourcing" causing people to lose money and jobs even during the 20 year bull run. It's a never ending game. Just remember, the businesses have their programs. The fat will get cut until late in the game. Then they'll get bloated and watch the expenses rise.
 
meyers9163 said:
So obviously things are starting to look, "better" as of right now. With the Dow being roughly 9111 as of 1130 EST it has me wondering if this will indeed be a good indication of a recovery if it reaches the 10,000 mark? I keep hearing the 10,000 mark is a key, but know very little with that that would make a large impact on the airlines and thus our jobs.... It got me wondering for those of you who have been in this game for a while, what the lowest you have viewed the DOW get down to and how that played into the state of the industry? And also the opposite, the highest you've personally viewed the DOW and the state of the industry during that time.....

Obviously I know business men and women alike will travel more with a better market... But with not really being a fiance man, it had my mind wondering today as I watch these stocks and thus DOW, S&P, and other markets climb yet unemployment continues to do the same...
Click to expand...

Just my two bits here:

I think 10000 is largely symbolic right now. Sort of like getting 1000 hours in your logbook. It is a great milestone, but doesn't mean things are going to change the second it does. Though I don't think it will hurt the nation's perception of the economy, since in some measure investor's perception drives much of what happens in the markets.

I think things are going to take time, especially with regard to this industry turning around. They estimate unemployment numbers will still be around 10% and consumer spending and confidence are still down with the possibility of inflation definately out there too. Amongst other things we need more and better employment to get spending and confidence up for more than a short time. Then airtravel might see increased demand and help things out for us.

A few years ago while the markets were high, the airline industry was just OK. I think we lag behind the markets.
 
Sheesh Polar. Did you write the DOW's closing numbers in your logbook each time along with your flight time entries? :)
 
It's definitely an encouraging number. So was 15. I wondered if we were going to hit it. History shows that the market has a tendency to precede hiring and the economy improving. I'm no economic expert, but I believe that some of the rise is due to massive buying going on. The smart and able ones are getting into the market. The Dow is 30 industrial companies and because industry has been looked to as a good indicator of the economy, people look to the Dow for economic signs. However, the Dow isn't just influenced by the companys' financial health and typical stock trading. It's also influenced by current events. You will see the Dow rise as those companies do better and companies typically do better before they hire and many will hire late in the game. That's why you'll see hiring AFTER the Dow comes up.
 
The only thing I can see 10000 on the Dow doing is lifting spirits. Now, with the right media campaign, you can probably convince consumers "We've arrived" and generate spending.....short term. If it's a false recovery, those people that spent are gonna be back where they were very quickly. I think it's a GOOD thing it's not gonna be a quick turnaround. I'd rather have a slow, steady recovery than several quick false starts followed by several quicker big dips.
 
There is a very good series of articles in the October 3-9 edition of The Economist. Their special report on the world economy, "After the Storm". It gives a variety of options for where the economy will go from here. Go to the Economist website and search for:

The Long Climb
From Ozzie to Ricky
The Hamster Wheel
A Fine Balance
Separation Anxiety
Rolling the Hoop
Market Fatigue
Industrial Design
A Dull, Heavy Calm

It's about 3 hours worth of material, but very good stuff for a broad understanding of the possibile scenarios.

Governments have poured a lot of money into their economies. Some could afford to do so ( China ), while others are destroying their long term future for a quick recovery ( USA, UK ).

People will still travel now the the world has become a global economy. There will still be a need for pilots.

That all said, I'd expect to see a sharp correction in the market before the year is out.

Long term I'd bet against the USD and be sure to hedge for inflation.

It's quite telling from Polar's post that one who first invested in the market in 1998/99 has now made exactly 0% ( excluding dividends ). Tax advantages of 401K/IRA and company contributions aside, the stock market isn't the great wealth generator that it gets advertised as being.


Typhoonpilot
 
meyers9163 said:
it has me wondering if this will indeed be a good indication of a recovery if it reaches the 10,000 mark? I keep hearing the 10,000 mark is a key
Click to expand...



We’ll the dow 10,000 mark is not a key to anything, just an arbitrary number that is only useful for getting the folks on bubblevision excited. First if any round number has any shred of significance it would’ve been the s&p crossing the 1000 mark. Since that has happened everyone can go ahead and look forward to nothing but good times ahead. :sarcasm:

FYI, at the most basic level, all a stock price is, is a multiple of what an individual is willing to pay for a share of a companies earning and what that individual perceives to be its future earnings potential. So now amplify that into a larger broader index and you can see why an increase in its level may or may not have anything to do with you at the microeconomic level.

Airlines are such small potatoes with zero pricing power that none are included in any significant index that gets any airtime anyway.
 
Polar742 said:
Q2 1992 - I start flying. There were no jobs to be had as my furloughed former Midway CA who is my instructor will attest: Dow 3271

Q3 1994: I start freshman year of college. Job outlook, meh. route is still CFIing for 135 mins, then hope to get a job flying ratted out charter whips. Dow: 3834

Q2 1996: I get my first jobs in Aviation: 1) Washing/waxing airplanes for the university. 2) CFIing for the Univeristy 3) Customer Service at the FBO 4) occasional CFI deal at FBO. Things are moving. People are leaving instructing for turboprop commuters, Mesaba is a popular choice. Dow: 5882

Q2 1998: I graduate with an aviation degree. Jobs are opening up at a rapid pace. Some crapwagon Tprop operator in IND looks to hire us with low time. Dow 9181

Q2 1999: CHQ gets it's first jet. Mainline pilots all over are flipping us off and calling us scabs. A trend for the next 8 years. Dow: 10336

Q3 2001: Terrorists act the fool. Airlines were in peril anyway, so they use "Force Majure" to slash and burn pilot groups. Dow 10021

Q4 2002: Someone's a Captain.....and dumps the full 15% into 401k. Dow ~8000

Q3 2007: I leave the commuter, there's hiring in all quadrants. Housing bubble is going down. Most FOs I'm checking out have less than 1k TT, and more likely closer to 500 TT like I had when I started. Dow: 13264

Q3 2008: I've had less than a year at my current job and fear getting laid off. A bunch of folks bought stuff they can't afford and the chicken is coming home to roost. No jobs in sight. My 401k loses about 40% Dow: 8776

Q1 2009: Dow bottoms at around 7608. We may not need to wait for 12/12/12 for the world to end, depending on to whom you listen.

Q2 2009: The worst appears to be over. I don't have the fear of working until I'm 105, since I've recouped most of my 401k losses. Things, while bleak are starting to flatten out. Jobs are still pretty tight for the foreseeable future. Dow: 9712

As to the other part of your question, cuts. There were cuts going on and "downsizing" and "outsourcing" causing people to lose money and jobs even during the 20 year bull run. It's a never ending game. Just remember, the businesses have their programs. The fat will get cut until late in the game. Then they'll get bloated and watch the expenses rise.
Click to expand...

Very good post. Helps younger guys, step back, take a breath, and look at the big picture.
 
On a side note, I checked my 401K about a little over a year ago. It wasn't pretty. I decided at that moment that it couldnt get much worse, so I made a risky bet. I had just passed my 5 year mark with the company, upping their contribution to 4% dollar for dollar match, I upped my contribution from 2% to 9%, for a grand total of 13%. Not only did I recover everything I lost in that short span, but my portfolio is back up 28% before the fall. I am now thinking I'm going to wind back down to a reasonable 5% contribution.
 
typhoonpilot said:
It's quite telling from Polar's post that one who first invested in the market in 1998/99 has now made exactly 0% ( excluding dividends ). Tax advantages of 401K/IRA and company contributions aside, the stock market isn't the great wealth generator that it gets advertised as being.
Click to expand...

Hopefully the long-term trends of the stock market persist. I think the worst 20 year period of the stock market showed an annualized 3% return and the best showed a 17% return, with an average of around 10%. Over 30-40 years that should smooth out more. Aside from the dividends, as you mention, you have to keep in mind that you are buying when the market crashes, too. 0% appreciation on the stock bought before the dot com bubble popped, but what about on the stock bought after it did? It ain't perfect and it's certainly for longer time frames, but it's the only chance I see of actually earning a few real percentage points on my money.
 
mrivc211 said:
On a side note, I checked my 401K about a little over a year ago. It wasn't pretty. I decided at that moment that it couldnt get much worse, so I made a risky bet. I had just passed my 5 year mark with the company, upping their contribution to 4% dollar for dollar match, I upped my contribution from 2% to 9%, for a grand total of 13%. Not only did I recover everything I lost in that short span, but my portfolio is back up 28% before the fall. I am now thinking I'm going to wind back down to a reasonable 5% contribution.
Click to expand...
Why do you think 5% is reasonable?
 
It's quite possible all the money we have saved will be worthless in the future. In the history of the US currencies have come and gone. The dollar tanking is a very real possibility.
 
You must log in or register to reply here.
Back
Top