Thread by @KailashConcepts

1/14 This piece from @latimes @hiltzikm about the #southwest meltdown is a must-read ⬇

Southwest’s meltdown was born in America’s cheapskate corporate culture

loom.ly/wzy4k30

2/14 "The short answer is their underinvestment in preparation and planning. For decades, Big Business has been squandering its resources…instead of spending on workers and infrastructure. There’s not enough give in the system, so when crisis comes, it doesn’t bend, but breaks."

3/14 $LUV gross profit for the twelve months ending September 30, 2022 was $5.928B, a 53.81% increase year-over-year.

4/14 In their Q3 report the CEO stated ⬇

5/14 "As we finalize our plan for next year, we remain laser-focused on our goals to grow full year 2023 profits and margins, excluding special items, year-over-year, and to generate healthy returns on invested capital for our Shareholders."
loom.ly/OUHrw_M

#returns

6/14 Perhaps it would have served Jordan well to have a laser focus on ensuring that their #systems were working adequately to ensure the airline could meet the needs of their #customers. You know, the people whose spending is actually delivering those profits to #shareholders

7/14 @Reuters released a piece yesterday where $LUV CEO Bob Jordan acknowledged that the #lowcostcarrier needed to upgrade its #legacysystems.

loom.ly/Ojai1aw

8/14 In July, we published Economic Cycles and Mean Reversion where we put today’s #marketvaluations and #margins in historical context.

loom.ly/hR-3JIo

9/14 We highlight a quote @WarrenBuffett defining #investing as the act of “…laying out money now to get more money back in the future-more money in real terms, after taking inflation into account.”

10/14 In 2021, US corporations would book #profits relative to GDP last seen in 1929.

Over a 13-year period (2009-2021), #equityinvestors compounded their wealth at 15.96% annually. Record stimulus, interest rates at or below 0%, and record margins sent #stocks soaring.

11/14 "Charlie and I are disgusted by the situation, so common in the last few years, in which shareholders have suffered billions in losses while the CEOs, promoters, & other higher-ups who fathered these disasters have walked away with extraordinary wealth." – Buffett, BH, 2001

12/14 Look, we're not against corporate profits - quite the opposite. But when a company has #recordprofits and fails to #invest in the required infrastructure to serve their customers and employees, it HURTS the bottom line. Worse, it hurts people.

13/14 Corporate #executives need to stop making internal PowerPoints and congratulating themselves and start looking at how they will reinvest so they can sustainably deliver profits to shareholders in the long term.

14/14 Let this #southwest debacle be a lesson.

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