Airline Stocks..con't..

[Goldmember]

Just a note on the Airline stocks a couple weeks back, Cramer on Mad Money was having a discussion and the bottom line on the evening was this, "Never Ever Ever Own an Airline Stock!!!!!"

Do I necesarily agree with him, no, because I see some potential in some airline stocks, but he makes one helluva point if your looking to "bank" on an investment.

[tonyw]

All you need to know about airline stocks is that even Warren Buffett couldn't figure out how to make money in them. He bought US Airways, and then dumped it after several years.

And Buffett isn't the kind of guy who buys something with the hopes of selling it after six weeks when it gets a pop. He's a long term investor. And if he couldn't figure out how to make it work...

[Chris_Ford]

Originally Posted by tonyw

All you need to know about airline stocks is that even Warren Buffett couldn't figure out how to make money in them. He bought US Airways, and then dumped it after several years.

And Buffett isn't the kind of guy who buys something with the hopes of selling it after six weeks when it gets a pop. He's a long term investor. And if he couldn't figure out how to make it work...

It's interesting, I was looking at the Fidelity Aviation mutual fund, and it's up something like 25% this year, it's obscene! But they own JetBlue, RyanAir, UPS and then a bunch of aerospace defense firms, so it makes sense... No legacies on that fund, but 25% returns, wow!

[ETAV8R]

I had a college instructor who was a ret. Continental CA who bought some United stock before they went bankrupt. He didn't seem phased at the time.

Now, just think if one had bought AMR stock when it was $1.25 a share 3-4 years ago and it is at $21.20 today. Still kicking myself for not buying any when it was rock bottom.
It can be done but you have to be careful and have a good knowledge of the market. Right now most of the airlines are losing money. Tomorrow could be totally different.

[blee256]

My cousin bought NW and Delta stock for 50 cents a share. thats not bad.I would buy NW stock on that price.

[tonyw]

Originally Posted by blee256

My cousin bought NW and Delta stock for 50 cents a share. thats not bad.I would buy NW stock on that price.

Let me help you out here.

Give me the money you want to "invest" in NWA, Delta, and UAL.

I'll kick you in the nads, give you half the money back, and a roll of TP.

You'll come out ahead.

Why? Because once those companies emerge from Chapter 11, guess what happens to the stock that's trading now? It gets cancelled.

Kaput.

Gone.

Fini.

Hasta la vista, au revoir, sayonara, so long, farewell, auf wiedersehen, good bye.

If nobody listens to one post other than this one, I will have done some good in this world.

Oh, and why the TP?

Because unlike the stock, you'll be able to wipe your butt with it.

[Doug Taylor]

"C'est vrai!"

[Kingairer]

"salida"

[Doug Taylor]

Originally Posted by Kingairer

"salida"

"Droevig, wilde ik niet uw geit nemen!"

[Kingairer]

That was the only one I knew, im out. ESTEBAN!

[Doug Taylor]

I'm a mac geek. It's all about the "Translator"

That was Dutch. Or "Sober Flemish"

[Chris_Ford]

Originally Posted by Doug Taylor

I'm a mac geek. It's all about the "Translator"

That was Dutch. Or "Sober Flemish"

Do you have Italian grammar check on there? I swear, that feature alone almost sorta makes me want to rent-to-own a Mac.

[Doug Taylor]

Originally Posted by Chris_Ford

Do you have Italian grammar check on there? I swear, that feature alone almost sorta makes me want to rent-to-own a Mac.

Può avere un controllo italiano di grammatica, ma non sono troppo
sicuro.

[SteveC]

Originally Posted by Chris_Ford

Può avere un controllo italiano di grammatica, ma non sono troppo
sicuro.

"It can have an Italian control of grammar, but they are not too much sure."

Google translate.

[Doug Taylor]

"Toda sua base é nos pertence"

("all your base are belong to us" in Portuguese)

[Chris_Ford]

Originally Posted by Doug Taylor

Può avere un controllo italiano di grammatica, ma non sono troppo
sicuro.

E vera! Sei un stronzo, Doug

[SteveC]

Originally Posted by Doug Taylor

"Toda sua base é nos pertence"

("all your base are belong to us" in Portuguese)

所有你的基地是属于我

あなたの基盤すべては私達に属するある



("all your base are belong to us" in Chinese and Japanese)

[Doug Taylor]

Would that be "traditional" or "simplified" Han?

[SteveC]

Originally Posted by SteveC

所有你的基地是属于我

translate back to English from Chinese: "All your base is belongs me"

あなたの基盤すべては私達に属するある

retranslate from Japanese: "Your basis everything belongs to us, it is"

[SteveC]

Originally Posted by Doug Taylor

Would that be "traditional" or "simplified" Han?

You tell me and we'll see just how good that machine of yours is, eh Apple-boy?

[Doug Taylor]

Looks like simplified Han, but you'll have to check with TonyW (who I presume knows Han) or "The guy who lurks but religiously shows up to NetworkJC that broke his back in a car wreck".

[SteveC]

The Google website just says Chinese (Simplified), so TaDa!!! I have no idea what "Han" is, or what any other options would be. I'm just a googling foogling!

[blee256]

Originally Posted by tonyw

Let me help you out here.

Give me the money you want to "invest" in NWA, Delta, and UAL.

I'll kick you in the nads, give you half the money back, and a roll of TP.

You'll come out ahead.

Why? Because once those companies emerge from Chapter 11, guess what happens to the stock that's trading now? It gets cancelled.

Kaput.

Gone.

Fini.

Hasta la vista, au revoir, sayonara, so long, farewell, auf wiedersehen, good bye.

If nobody listens to one post other than this one, I will have done some good in this world.

Oh, and why the TP?

Because unlike the stock, you'll be able to wipe your butt with it.

um, thank you charles schwab.

I didnt say UAL or DAL, just NW. I think NW will be just fine as a company. I cant see them going away.

But could you explain to me how a stock would just get cancelled when emerging from BK? if that is the case why would anyone inviest in any company in BK?

[wheelsup]

Originally Posted by blee256

um, thank you charles schwab.

I didnt say UAL or DAL, just NW. I think NW will be just fine as a company. I cant see them going away.

But could you explain to me how a stock would just get cancelled when emerging from BK? if that is the case why would anyone inviest in any company in BK?

The US Governemnt could better answer this question!

What Will Happen to My Stock or Bond?

A company's securities may continue to trade even after the company has filed for bankruptcy under Chapter 11. In most instances, companies that file under Chapter 11 of the Bankruptcy Code are generally unable to meet the listing standards to continue to trade on Nasdaq or the New York Stock Exchange. However, even when a company is delisted from one of these major stock exchanges, their shares may continue to trade on either the OTCBB or the Pink Sheets. There is no federal law that prohibits trading of securities of companies in bankruptcy.

Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.

If the company does come out of bankruptcy, there may be two different types of common stock, with different ticker symbols, trading for the same company. One is the old common stock (the stock that was on the market when the company went into bankruptcy), and the second is the new common stock that the company issued as part of its reorganization plan. If the old common stock is traded on the OTCBB or on the Pink Sheets, it will have a five-letter ticker symbol that ends in "Q," indicating that the stock was involved with bankruptcy proceedings. The ticker symbol for the new common stock will not end in "Q". Sometimes the new stock may not have been issued by the company, although it has been authorized. In that situation, the stock is said to be trading "when issued," which is shorthand for "when, as, and if issued." The ticker symbol of stock that is trading "when issued" will end with a "V". Once the company actually issues the newly authorized stock, the "V" will no longer appear at the end of the ticker symbol. Be sure you know which shares you are purchasing, because the old shares that were issued before the company filed for bankruptcy may be worthless if the company has emerged from bankruptcy and has issued new common stock.

During bankruptcy, bondholders will stop receiving interest and principal payments, and stockholders will stop receiving dividends. If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds, or a combination of stock and bonds. If you are a stockholder, the trustee may ask you to send back your old stock in exchange for new shares in the reorganized company. The new shares may be fewer in number and may be worth less than your old shares. The reorganization plan will spell out your rights as an investor, and what you can expect to receive, if anything, from the company.

The bankruptcy court may determine that stockholders don't get anything because the debtor is insolvent. (A debtor's solvency is determined by the difference between the value of its assets and its liabilities.) If the company's liabilities are greater than its assets, your stock may be worthless. Contact your local Internal Revenue Service (IRS) office or call 1-800-829-1040 for information about how to report worthless securities as a loss on your income tax return. If you don't know whether your stock has value, and you can't find a stock or bond price in the newspaper, ask your broker or the company for information.

http://www.sec.gov/investor/pubs/bankrupt.htm

I'm guessing people buy these "penny" stocks because you can buy many thousands of shares for little money, and if the stock goes up $0.10 or even less you could make a lot of money if you dump it right away...? That's my best guess.

~wheelsup

[tonyw]

Originally Posted by blee256

um, thank you charles schwab.

I didnt say UAL or DAL, just NW. I think NW will be just fine as a company. I cant see them going away.

But could you explain to me how a stock would just get cancelled when emerging from BK? if that is the case why would anyone inviest in any company in BK?

Doesn't matter what you think of United, Delta, or Northwest. When they filed, their current stock became worthless.

Why people "invest" in companies in chapter 11? Because they don't understand what it means. It means buh bye stock. They think, well, NWA's not going to go away, so I'll profit when they come out of chapter 11.

All well and good except the stock that you buy won't be worth a hill of beans when they do emerge from chapter 11.