Death Spiral Stocks

I have long wondered just how the airlines stay in business. From fuel costs to security to the stupid need to overbook flights to the unbelievable infrastructure needed to keep things moving I really want to know how they do it.

The market wonders, too, by the way as these stocks are in the toilet.

But the public will travel by air and business needs to ship goods and people quickly to get things done. Someone will have to provide the service yet all the contenders are going out of business. Then supply and demand can finally right this wrong and send prices up to where they should be. Business already pays in the form of full fares and business class. Individuals will have to get used to higher fares and a budget squeeze that will force them to forgo that extra trip to Disney World or weekend jaunt to Vegas.

Do I sound like a cold b*st*rd for excluding the lower income brackets from air travel, or at least as much air travel? Yeah, I do. But that is the free market and it is coming. What stocks are going to benefit from that? Not resorts. Not casinos. But perhaps mass transit suppliers and restaurants.

A paradigm shift is coming.

And now lets talk about the automakers. More stocks getting flushed and why? Because they still cling to a world where energy was cheap and status came in the form of the stupidest car ever produced - the Hummer. I thought regular SUVs were dumb. Who needs an all terrain vehicle on the highways of the southern half of the country? Maybe we can make the argument that they are needed in New England, MinnieSota and the northern Rockies but soccer mom does not need a four wheel drive gas chugger to head out to Stop & Shop. Yeah, they hold a lot of kids but so do minivans and the dreaded wood paneled station wagon.

After Detroit finally wakes up and the unions start acting like partners and not parasites that kill their hosts the automakers will survive. Or at least some form will because we will always have the demand for motor travel. Again, moving people, goods and even travel for leisure are not going away. Well, not unless Mr. Scott can beam stuff around the planet.

So, my prediction is that a better motor vehicle mousetrap is being built somewhere (no not the Ginger) and that company will be a great investment. And so will the few airlines that figure out that charging the right amount of money to the right audience will make them profitable again. Let someone else figure out how to serve the low end - where there will be a better mousetrap made somewhere, too.

Sorry people who cannot afford the real price for flying. Perhaps a whole new industry of selling unsold seats the day they travel will arise - better than the online ticket brokers that I would not trust with my precious vacation time. Think of TKTS in New York selling seats to Broadway shows for half price the day of that show. Sell the seat or lose it forever. Same for airlines. Now those of us who cannot afford to travel with the whole family will be able to take that trip after all.