This is more of a question than anything and I hope I am not breaking a rule by posting here. I know sometimes people say this is the wrong place for that or whatever

At any rate, should we be buying AMR stock now that it is falling due to the safety issues? seems I recall ofter the attacks, their stock was way down and the government bailed them out. This leads me to believe the govt is not going to let this company fail and that makes me think that the stock will return to normal eventually.

I was thinking about picking up some expecting that it would fall some more and then go back up.

Any thoughts on this? Is this a bad idea?

Personally if I was going to play an airline like AA, I'd wait for some steep single day drop (maybe on it's earnings report or something) and then look to play it on a bounce.

Long term airlines are going to have a really hard time being profitable with more expensive credit and high oil prices, and stock prices are related.

It's one thing for the gov't to give an airline a one time bailout, it's another thing to give it money every quarter forever because it may not be a viable business if oil stays high.

Remember too, right now a lot of airlines have oil hedging contracts, where they can get some % of their oil way down as low as almost $60 a barrel or less, as those hedges expire slowly over the next couple of years their costs will get steadily worse.

Also, everytime any other airline has a problem or blows up, this stock will probably lose 1-2% along with the whole sector too. It will probably drop like a stone everytime it releases earnings reports too.

Honestly I half believe that they're grounding their planes right now in a bid to conserve cash. That's total speculation, but if it's true it could indicate serious trouble in the not too distant future here.

IMO aiirlines like this make bad long term holds, but possibly really good quick bounce plays if they drop sharply in a single day, it's possible they might recover a bit in 1-4 weeks following. But long term there are way better businesses to have than airlines if you plan to keep it.

If you're going to bet on a bailout, try to buy it right after some major problem/drop in the pps and hope the gov't buys it the next day. If there's any opportunity at all the market will drop the pps like a stone the second they appear to have real problems, so you'd want to buy after that if possible.

// edit, just looking at the chart it's not too bad right now, but I'd do a check for when earnings are due or any other possible news that might be horribly bad before I bought any of this