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Boeing -- The truth

 In 2014 Boeing's market cap was $91 billion.  It was the best-known aircraft manufacturer and had an impressive reputation.  The B747 was still selling and the A380 was proving to be an expensive failure.  The aircraft manufacturer was sailing high in the wind.  Then the company decided to change its future and become market-driven.  Share prices that had hovered around $100 rose to $420 in 2019.  A very successful strategy Wall Street and investors were happy as clams.  The word was good until the B737MAX and all the faults occurred.  In 2014, Boeing was sitting on a massive order book and had a great reputation.  All the way to today Boeing's share price is $192.  Nearly double what it was in 2014, market capitalization of $100 billion more or less where it was in 2014.  The BIG difference is its future; the order book is dry, the B737 is still a troubled child and even the 787 is in trouble, and to add to the trouble its reputation among pilots is in tatters.

Despite all that its share price is still nearly twice as high as it was in 2014.  P/E doesn't matter Boeing announced losses for the year.  

The question: if the share price is a representation of potential future earnings why is Boeing's share price still around $192, and its market cap more or less unchanged because let's be honest Boeing's Boeing's future earning potential is in real jeopardy.  But then the market can be strange!

I watched DJT stock price over the past few days, I marvel at a valuation of almost $7 billion for a company that last year had less than half a million users (and declining) earnings of $3.4 million for the first 9 months of the year and losses of $43 million.   The valuation implies Facebook-like growth levels, and the user base (which is the only way to raise revenues) is static, falling slightly.  

Both Boeing and DJT suffer from similar maladies, there is a disconnect between reality and expectation.  The truth is that Boeing needs a major cleanup, and it's not Bob and his buds that are going to execute the change.  The reality of Boeing and its attempt at blaming subcontractors is bogus because it's their name on the plane. As for DJT as soon as Trump liquidates his stake in the company which will happen very soon, since it's all his buddies on the Board, the value of the stock will drop to zero.  The smart money will move first, and the idiots will be left holding the bag.

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