Here at Prophet, we believe strongly in the saying Few Bets, Infrequent Bets, Massive Bets in the Stockmarket. We only invest where we see massive upside with very little downside and then we back the truck up and make a massive bet. Today we look at Boeing Shares.
In this series, we examine a couple of case studies regarding this motto and explore several times when we have deployed this method of Investing.
We intend on releasing a number of articles demonstrating this strategy when it comes to investing. So stay tuned.
Case Study #1: Boeing Shares Co
During the COVID Crash, we published a Facebook video on why we were making such a massive bet on Boeing Co. During the COVID crash we saw the share price of Boeing fall a massive 70%. This was off the back of the company facing some pretty grim news.
The company at the time was plagued with the below perceptions in the market:
- The companies flagship jets, the 737 Max was the subject of a massive investigation regarding the LionAir Crash
- Travel plans were dashed overnight and some analysts were saying that air travel would take at least 5 years to recover
Boeing Shares Price
This is when Prophet identified maximum upside potential in the share price with very little downside risk. We identified a maximum of 25% downside and set our stop loss accordingly. But on the upside, we saw a massive 156%! We identified that Boeing’s defence business would be largely unaffected by any COVID related factors nor the 737 Max investigation.
The defense business alone would have been worth what the share price was going for at the time. Let alone the fact that Boeing is a symbol of America. I mean the president of the United States fly’s around in a Boeing Jet! Talk about a successful business moat.
Boeing Shares Today
Prophet has made multiples of their original investment in Boeing. In this case it was a flip of a coin that was stacked massively in our favour. It was a case of Heads I win, Tails I don’t loose much- The house always wins.
To us, investing is the equivalent of going out and betting against the pari-mutuel system. We look for the horse with one chance in two of winning which pays you three to one. You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.Charlie Munger
Learn How We Analyze A Company:
What Are We Currently Buying?
In the past few weeks here’s some exciting companies we jumped in on: