Joseph G. Witthohn, CFA
VP of Product Development Emerald Asset Management

Good morning.

I don’t know where I got this from, but a comment this morning reminded me of a story I heard a long time ago (and I will do my best to butcher my telling the tale from memory).

Imagine there is an island which only has 5 occupants … and the only item that exists is the coconut … and each person needs 1 per day to survive. Now let’s imagine one of these people is too old to work, meaning the others must produce 1.25 coconuts for the population to be fully fed. All is fine … and production continues in this fashion until, however, one of the other workers also becomes too feeble … and now 3 are supporting the other 2 … meaning that each now must “produce” 1.67 coconuts … and increase of 33% … just to maintain status quo. Even if one of the “older” inhabitants dies … the others still need to increase output … to the tune of 1.33 coconuts per day.

While this may seem like a silly tale … in reality … is it really that much different that the route upon which we find ourselves with an aging population? It appears to me quite obvious that without immigration (and this is not meant to be a discussion on legal vs. illegal) or an increase in children per family … we could one day find ourselves to be woefully in danger of running short of coconuts.

The Boeing problem continues in today’s news … as the plane involved with the recent crashes … the 737 Max 8 jet … is, reportedly, being grounded by an increasing number of nations pending investigation, understanding (and fixing) the cause behind these events.

Not only is this a reputational risk to the company … but CBS reports that “sales of the 737 Max account for roughly a third of Boeing’s profit” and “Boeing expects 737 Max models to make up 90 percent of 737 deliveries in 2019.”

So it is quite important that this highly-subsidized company (according to Subsidy Tracker, Boeing has received the largest amount of government subsidies in recent years) … solves the problem … and solves it fast.

Losing confidence of the flying public won’t bode well for an industry that is so dependent on client trust.

Meanwhile … there is some good … no, make that “great” … news today. Per the last story below, it is national pancake day … and IHOP is giving away free pancakes.

I was going to make a pancake joke

… but thought that would be too crêpe.

Have a great day,

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
wit@teamemerald.com

… as of 11:46 AM today …

Quick Look at the News


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