Where Have the 747’s Gone?
I will never forget the first time I saw a Boeing 747 fly. It was 1971 and I was living in Miami. I was driving south on Le June road that borders the eastern edge of Miami International airport. All of a sudden, I saw this gigantic plane take off with a huge bubble on the nose. I could hear the engines as it passed right over me, and it was a sound that I have never heard a jet make before.
The Pan Am 747 was one of the first to fly out of Miami and would continue to be a mainstay of long distance travel for decades to come. But now that era looks like it about to pass as Boeing has announced that it will no longer take orders for any 747 passenger jets. The only orders that they have now are for commercial jets and they are dwindling. Boeing built more that 1,500 of the passenger/cargo jets but only around 180 are still flying today and they mostly come from foreign airlines. The last two domestic airlines Delta and United, discontinued flying them last year.
The 747 was the first and in my opinion the best of the jumbo jets. It had wide isles, big seats and felt like you were at the height of luxury. Today’s modern jumbo jets simply don’t have that feel. They are more like flying in a cattle car. All space has been removed to accommodate more passengers, reduce overhead and increase revenue to make the airlines profitable in these competitive times.
The 747 had a fantastic safety record as only fifteen of the original 1800 were involved in an accident in which passengers suffered fatalities. Most of those accidents were a result of terrorism or pilot error. Of the 15 crashes only two have been held responsible for some form of mechanical failure and both of those were attributed to maintance.
Today’s modern two engine jumbo jets have the edge. They provide more power on less cost and of course, and that is the name of the game. They are highly successful and probably will push out the A-380 made by the European flight consortium Airbus over the next ten years. By 2025 it is doubtful that any of the great 747’s will be flying, and that means the sky’s will never be the same!
Ask Mr. Seifert
I am constantly asked questions about trading and how to exploit certain market factors to insure success. Each week I will answer one of those questions here with a short paragraph.
Question: Do horizontal spreads present unlimited risk?
Horizontal spreads can have unlimited risk if they are put on with a short ratio. But vertical spreads would have the same risk if they were put on as a short ratio. It is the same with straddles and strangles and the writing of naked puts and calls. They all present unlimited risk if you do not buy an equal or greater number of long options. If you buy a horizontal with a debit your risk is limited to the amount of the debit. If you put it on as a credit your risk is limited to the credit minus the strikes involved. So, remember as long as the horizontal spread does not have naked options, your risk is limited.
The Wise Guy Report: The View From The Electronic Floor
Each week I talk about how the Wise Guys (floor traders) find the soft spots in the market and take advantage of price dislocation in three major commodity markets: Gold (GC), Crude Oil (CL) and Long-Term Interest Rates (ZB). On the equity side, I cover the MSS which is the Mister Seifert Sez Composite Index. This is a proprietary index that I created which measures the dollar flow of the four major indexes (S&P 500, Nasdaq 100, Russell 2000 and the Dow Jones Industrials) on an unweighted basis. This week let’s take a look at last’s week price action in in Crude Oil.
Crude Oil Continues To Flounder (Trending)
With quiet in the stock market and an absolute flat gold and interest rate market, crude has been on our radar for the past couple of weeks. The rig count in the U.S. reached a one year high again this week. Although it is only slightly higher than last month it has almost doubled in a year. It is still well below all-time highs that occurred at the height of the commodity bubble in 2008 but it is still putting pressure on the prices. A very significant note to the year long rally is that West Texas Crude has had a 50% retracement in price since the start of this last leg down and the market top of around $74 dollars. We have been holding steady at this number and if it can hold I think that we go back to the top and then possibly break out to make new highs. If we can’t hold around the $64 level, look for a sell off to around the high $50’s and see how the Saudi’s react to that news. This market bears watching as opportunity is going to show here in the next couple of weeks. If you want to participate in the oil market, I would be a buyer at this level, not a seller.
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Mr. Seifert