ISTAT Jetrader - Autumn 2021 - 39

My answer, " in the long run, " was
never accepted. When exactly? So, in
March 2011, at ISTAT Americas, when
oil prices were about $130/barrel, I
came up with the exact date: Before
16 October 2018, oil prices would be
below $40/barrel. How did I come
up with this date? I needed a date I
would remember, and that was my
birthday when I would celebrate ending
another decade. I knew I would always
remember that date. And I was certain
that careful analysis got me on the
right road. Many people did not believe
my forecasts, but I have heard from
many people whose business actions
followed my predictions. I also talked
to a number of people who told me that
they personally made good fortunes
betting on low oil prices in the future.
That made me very happy indeed.
Another prediction I made at the
same conference also got a lot of
attention. I want to emphasize that I did
not select Boeing's product strategy
and had zero influence on the launch
of the MAX. I did, however, predict
that Boeing would launch a re-engined
version of the B737 despite the fact
that, at the time, the official line of the
company was that they would launch
a totally new product. I presented
cogent arguments why this would
not happen. The planned plane was
being touted by none other than the
president of Boeing, Jim Albaugh, an
outstanding engineer and executive.
Since Jim followed me and I presented
a very clear vision (not one of the usual
" in the long run " that economists are
famous for), the difference of opinions
was obvious. Jim, in front of all the
audience, challenged me to a bet. He
said, as president of Boeing, that his
company would launch a brand-new
aircraft in 2011, while I insisted that
Boeing would modify the existing B737
with a new engine. I also insisted that
this would happen before year-end.
This was quite exciting. The head
guy saying what he will do and, as
president of his company, he speaks
with authority, while an analyst tells
people something quite different. I must
admit that after Jim's presentation, I
was feeling slightly less certain about
my own prediction. The bet was for a
fancy bottle of wine. But history proved
me right. Jim was very classy about
it. He sent me a message by the time
American Airlines ordered the MAX
congratulating me that I had won our
bet (as he phrased it, " the best bet I
ever lost " ) and asked where to send
the wine. I told him I am a peasant who
does not properly appreciate fine wine
but we could substitute the wine for an
autographed airplane model. The next
day, I got the model sent to me with a
note saying I will still get the wine the
next time we get together.
While these examples are not
your average experience at ISTAT
conferences, a lot of interesting things
do happen there. Many members have
their own stories to share, and many
more will have a new stories to share in
the future.
Jetrader * AUTUMN 2021 * 39
ISTAT Jetrader - Autumn 2021

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