In early 2007 I couldn’t find a losing stock amidst the bull market. Then, I bought some Boeing (BA) call options on the alleged catalyst of Dreamliner becoming a game changer.
Dreamliner changed the game, alright. Boeing has made shareholders feel like passengers on the Titanic.
The Anatomy of a Disaster
Although I pulled the ripcord on my options shortly after the first delay, I have now spent 3 years watching those original Dreamliner investors witness blunder after blunder.
I naively thought a world-class aerospace company such as Boeing would naturally be the leader in next-generation airplanes. Seems that even the best in the business can create a worm hole of costs on the back of bravado.
The lesson here is be careful with revolutionary change which comes at the expense of lower-risk evolutionary change. Only a handful of companies in the world can even compete with Boeing, yet they bet the farm on a product which requires extraordinary amounts of testing and perfect engineering.
Why didn’t Boeing go with a stepping stone toward Dreamliner? Reminds me of another bold product which didn’t stay afloat …