Airlines: How much does the current ratio matter? How does one go about analyzing them properly?
Chinmay Sangoram: Not a reliable indicator since typically short term liabilities, especially creditors, are likely to distort the ratio..
Mikhail Bakunin: I wouldn’t invest in something just because Buffet does.
Allen Kaplun: The question wouldnt be raised if it was a matter of just following Buffet. This is a question of how does one go about analyzing the health of this industry.
Jason Hengels: Airline investors typically put heavy focus on RPM and ASM: https://en.m.wikipedia.org/wiki/Revenue_passenger_mile
Revenue passenger mile – Wikipedia
Allen Kaplun: Thanks! I figured it had something to do with that but didn’t know the metric terminology. RPM makes a ton of sense and with the way Airlines have codesharing these days RPMs should drastically improve.
Michael Morse: If we assume that the 1000 passenger planes will become popular in the next 20 yrs…airline stocks should do better. 1 or 2 trips a day and their done for the day.
Michael Morse: Isn’t buffets philosophy all about book value…not price.