Airlines Are Up Huge Today

by MB on September 16, 2008

So goes oil, so goes the airlines.

As oil continues to drop, the airline stocks have been on an absolute tear. This is in contrast to the overall market which has been generally miserable.

At the time of this writing:

  • Delta Airlines (NYSE:DAL) is up 24% today and up 79% in the last three months.
  • Northwest Airlines Corporation (NYSE:NWA) is up 22% today and up 80% in the last three months.
  • US Airways Group (NYSE:LCC) is up 17% today and up 195% in the last three months.
  • AMR Corporation (NYSE:AMR) is up 17% and up 132% in the last three months.

Here is a chart comparing the airlines listed above to

airlines-oil-comparison-chart-2008-09-16.jpg

Very impressive, however one must consider what happened to the airlines in the months before oil began its fall.

Here is the same group, except the chart shows a one year time frame.

comparison-chart-2008-09-16-1yr.jpg

As you can see, most of these stocks are still way down on a 52 week basis. An important investment skill to learn is to not kick yourself for missing a huge upward move in a group of stocks. Unless you have a detailed knowledge of both the supply and demand dynamics of the oil and airline industries, investing in these stocks at any point in the last year could only be labeled a speculation (read gambling).

Remember the Warren Buffett maxim “There are no called strikes in investing.”

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