... the 9 in todays closing price being flipped upsidedown to a 6 before this slide is over. No! I am NOT short. I have no interest in seeing GOL go down. I'm being realistic. There's no bottom in sight. It's like hearing the kids in the back seat on a long trip constantly saying, "Are we there yet?" The roadmap got blown out the window at around $20.
It seems as if the price of oil had little or no connection to the price of GOL. Very depressing. If oil goes back up to $150, what will happen to GOL? Maybe oil has to go down to about $20/barrel to get GOL over 10.
Given the sharp decline in crude oil, the price of GOL has been a major disappointment. Most of the domestic airlines have fared much better, and today was no exception. I'm thinking that there are problems with GOL that are more fundamental than just high fuel costs. I substantially pared back my holdings at prices slightly above $30, and I've been holding a small position more out of curiosity than anything else. I'm glad I resisted my temptation to buy more as it came down. I have the feeling that the controlling family has no interest in seeing the stock go up. If they're happy with big salaries and status benefits, the stock could be dead money for a very, very long time, indeed. As we reach the end of the year, I'll have to assess my tax position. If I can benefit from any losses, GOL will be the first stock to be sold.
No question about it... oil is a contributing factor to GOL's dramatic decline. However, I have a strong feeling that there are other problems that are less apparent. With the worldwide credit crunch, it seems unlikely that taking the company private will happen even at these low prices. As for oil, it would take a price decline of biblical proportions from the current level to have any real impact on profitability. The soaring demand for oil in places like China and India is more likely to keep worldwide prices moving higher although not in a straight line. Any sort of major geopolitical event (i.e. Iran, Pakistan, Afghanistan, etc.) would have unimaginable consequences for all forms of transportation, especially airlines. Luckily, I have a substantial position in PBR (Petrobras)that has worked out beautifully.