I sold all 400 of my AAL shares this morning at a price of $49.53. I have a long term loss of approximately $580.83 for these shares.
Why I Sold AAL Now
- I sold for several reasons, the first of which is that I am getting more and more worried about terrorism and the instant effect it can have on the airlines and the travel industry. England is grappling with monthly terrorism incidents and while I don’t feel those specific ones will slow down travel, terrorism is front and center around the world now and that constant threat can’t be good for American Airlines. One bomb on a plane or in an airport and airline stocks can take an instant nosedive.
- I had a much bigger loss a year ago (more than $6,000) with this stock and it has almost doubled since then. I’m super happy to have erased most of that loss and get out with “only” losing about $580.
- The big reason I bought AAL in the first place was because of low fuel prices and since it doesn’t hedge fuel expenses, I thought it might do better than many of its competitors profit wise. But while AAL has reported great earnings for some time now and had some of its best financial quarters in the companies history, it never translated into a rising stock price (above what I bought it at). This might be for a variety of factors including what investors fear are risks from terrorism, viruses, weather, the high price of planes and other factors. It has become plain to me that investors view airline stocks differently than stocks from many other industries because of those risks.
- Finally, the airlines are hated by almost everyone and I don’t like owning stock in a company that everyone hates. Cable companies and airlines are two industries that most people use but intensely dislike. The awful publicity United Airlines has gotten this year doesn’t help American Airlines and I am happy to be out of a stock of a company that seems to have so many headwinds (risk and public opinion) going against it. I can confidently tell you that I have no plans to ever buy another airline stock in my life!