Monday, April 8, 2019 -- T+96, Part 3 -- Black Swan

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Mid-afternoon trading: the overall market is doing better than that suggested by the Dow being down 120 points. My hunch is that Boeing accounts for much of the "drag." The two plane crashes are "old news" but the fact that Boeing is down almost 5% today (down about $20/share) suggest real concern. Boeing has cut back on production of the 737 Max 8. These are the headlines, and they are not good:

Some years ago the "buzzword" in business circles seemed to be "black swan." There were whole books written about "black swan." But now that we clearly have an example of a "black swan" right in front of us, I haven't seen that phrase used. It may be buried in stories that I have missed but it seems someone would use it in a headline.

From Investopedia: What is a Black Swan?

A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict. Black swan events are typically random and unexpected.

There are three elements to a "black swan." The Boeing situation even meets the third element:  analysts early tried to "explain away" the event on "pilot error."

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It turns out I am wrong. A nexus search reveals some interesting "black swan" / Boeing 737 articles. This was at/near the top of the google search and is quite interesting, from The Air Current: "737 Max airlines take cover under the wing of a black swan."

Many questions raised by that article. It does answer one question. Despite the grounding of the 737 Max there seems to be little disruption in service (ignoring the first week or so) -- with so many 737 Max models in use, why did we not see more disruption? Because, in the near term, there is more than adequate "seat supply" capacity. ["Little disruption in service" based on what I saw last week; I see a new headline above that suggests American Airlines is, in fact, canceling more flights becuase of this issue.]

Some weeks (months?) ago, the price of AAPL shares fell to the extent that it caused a number of analysts to be concerned. I know folks put "stop-losses" on their AAPL shares or sold them outright. Didn't Warren Buffett sell off some Apple shares; there were headlines that he did but there was some question; I never read the articles. But whatever caused Apple shares to drop a few weeks (months?) ago, it never bothered me. But, with Boeing it seems to be a very, very different story.

The analysts pretty much pooh-pooh any real damage to Boeing, at least in the articles I read, but there certainly seems to be a lot of "whistling in the dark."