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Now that you sold your speculative holdings, the question is, where to invest in this market? We like to also answer this question with 2 other simple questions: a) What companies are trading -50% or less of their all-time-high with competitive advantages in their market?; b) What short-term catalysts are inevitably happening? This is not all that is needed, of course, but this is not a valuation class, rather guidance on how to start with the right foot.

The first question will inevitably lead you to some “unsexy” stocks, but again, 2022 is not the year of the Sexy’s! …Done? What name heads your results? We are 100% sure that Boeing (BA) will pop in your list first. This is also our #1 holding ahead of Jan 26, 2022, Earnings Call. We are obliged to provide you with some reasons for this, thus we will try to keep it as simple as possible:

1- It’s moat. Airlines with BA pilots must recertify then to fly other brands of planes, being this cost to do so astronomically high.

2- Its growing backlog more than doubles its whole enterprise value. Is the only American company with 10 years’ worth of production backlog.

3- The Max is already recertified everywhere in the world but in China.

4- Taiwan, The Houthis, and Ukraine conflicts accelerate the defense expending and BA is at the center.

5- The China recertification, though political, is days away and not months away. Worth saying that the biggest airlines in the world are NOT in China, but the USA.

6- Built planes ready for delivery vs. 6year waiting list to get an Airbus plane.

7- Pricing power in inflationary times. Just take the RyanAir case as an example of pricing power.

8- Its Debt/Net Orders ratio is ridiculously low.

9- Sorry to say it, but… Too big to fail. Period. It’s America’s #1 industrial exporter!

10- The 787 problems are moving forward and safety has been prioritized inside BA on this matter to avoid another Max incident. Once fixed, delivery of built planes will resume.

11- It’s a reopening/inflationary play. TSA numbers are showing what is happening around the world: people want to travel again! On the other hand, the price of steel, iron, copper, and other raw materials to build those 787 and Max’s were at 2018 costs, but their finish plane prices have risen accordingly with inflation. Again, take the RyanAir case as an example here. We must also say that during inflationary periods industrial companies with pricing power are direct beneficiaries as well as borrowers over lenders; BA has all those benefits.

12- It did not dilute its shares during the though past years, so we do not expect it to do it now at better times. We could continue with this list, but so far, the narrative is so great at the present value that showing the numbers to sustain it makes no sense. Also worth saying here that we DID do a fundamental analysis of the company.

We hope that our opinions here raise questions to the skeptics and that those retail investors that got great gains in 2020-2021, start to switch their mindset out of what is no longer working.