Dividend-News

The Retiree's Dividend Portfolio - John's June Update: Why We Dropped Boeing

Published Tue, 30 Jul 2019 15:10:06 -0400 on Seeking Alpha

That's right, we chose to sell Boeing (BA) out of John's Traditional IRA. Given the circumstances surrounding the grounding of the 737 MAX, I wrote about the decision to do this in the article, Why I Dumped Boeing - Even Though I Believe It Will Fly Again.
As many of you are probably thinking, I received mixed feedback in the comment section of that article. I estimate that 60% of people understood my criticism of Boeing while the other 40% couldn't fathom how I could hold such a blasphemous opinion. Well, a simple search regarding the 737 MAX just after midnight on July 25 produced a number of headline articles that provided further proof as to why we sold our position in Boeing. The New York Times suggested Boeing may stop 737 MAX production if the return of the jetliner is delayed any longer than necessary. Now, this confirms my uneasiness about Boeing because halting production on a plane with years of backlogged orders isn't a decision to be taken lightly. I think we can all agree that Boeing shutting down production (or even slowing production for that matter) is something that most investors would have never considered possible.
I think my position against Boeing is entirely reasonable because I am actually bullish when it comes to Boeing's long-term outlook, but their short-term outlook tells me that its current share price cannot be justified since management has been unable to convey the plan going forward with any semblance of certainty. The other big issue is that... Read more