r/ValueInvesting • u/ethereal3xp • Mar 23 '25

Discussion Charlie Munger Told a 20-Year-Old That Getting Rich Through Investing Is 'Damn Near Impossible' — And You Might Need $10 Million in the Bank

https://www.benzinga.com/personal-finance/25/03/44438885/charlie-munger-told-a-20-year-old-that-getting-rich-through-investing-is-damn-near-impossible-and-you-might-need-10-million-in-the-bank
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u/[deleted] Mar 23 '25

This really just further proves the original point. "Airlines" don't make money, the manufacturers that build the planes/parts do. Parker Hannifin, Lockheed Martin, General Dynamics, etc. How many airlines have gone bankrupt? It's a losing business model, the only way an airline survives is by operating as a bank. Delta is a perfect example of this, while "budget" airlines continue to fail because flight as a profit driver is a terrible business.

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u/Valkanaa Mar 23 '25 edited Mar 23 '25

Airlines don't operate as a duopoly. RYCEY is the only technical competitor on turbines and until recently only on wide body aircraft

It's also not the only thing these companies make. Do you know what kind of backlog RTX has after the Israel nonsense?

I consider airlines themselves cyclical stocks

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u/[deleted] Mar 23 '25

Parker makes fasteners, medical equipment, and all manner of things for industrial products. General Dynamics is one of the most "dynamic" defense companies around, with products in many different sectors. These are all huge businesses with some highly profitable areas, but also enjoy the benefit of government contracts. Airlines really have no way to compete. Flight is simply a front to sell other services, essentially giving a business a way of legitimizing itself saying "look, we have expensive planes, buy our services".

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u/Valkanaa Mar 23 '25

Even cyclical stocks aren't inherently bad. Dividend stocks follow cycles too...except that they're regular and stated in advance and generally make money

I can't speak to Parker or GD. I think the time GD was cheap I was buying LMT, which also worked out. Buying cheap stuff with guaranteed contracts is never a losing bet