Bombardier: Why English Majors Should Invest
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I want to use the case of Bombardier (TSX: BBD.B), one of my favorite stocks, to give one reason why skeptical English majors should invest. This week, a flurry of news releases demonstrated the incredible scope of Bombardier, and it got me thinking about the relationship between narratives and companies.
In my "real life," I teach writing at the University of Chicago and work in the MA Humanities Program. My colleagues here get a kick out of the fact that I have a Scottrade account, and that I pretty regularly get caught trading in between classes on Hamlet and Plato. This blog itself is premised on the assumption that there's something valuable in applying humanistic insights to market analysis. Of course, this can seem like a strange claim to make, as much from the perspective of investors as from that of a first-year undergraduate studying Twentieth Century American Literature.
But my argument has always been that if you're interested in narrative -- in the way that complicated and seemingly disparate influences can converge to impact a set of decisions -- then investing is your sport. These kinds of complex interconnections are equally the foundation of transhistorical experimental works like David Mitchell's Cloud Atlas and Anthony Trollope novels. Investing is as much about reading and interpreting history, politics, characters, and complex plots as it is reading balance sheets. That is, for English majors out there, there are reasons to go buy yourself some stock (and if you're young, to hold onto whatever you buy for the long haul), and these reasons are related -- stop laughing -- to your chosen profession.
Bombardier: From Snowmobiles to CSeries
Consider the case of Bombardier, which began as a snowmobile company in 1907 (see below) and today takes in more than $17.5 billion in annual revenue.
Bombardier builds airplanes in Kansas and has been involved in an ongoing frustrating dispute over rail construction in Britain. It's replacing Chicago's subway cars and its Zefiro very high speed train prototype tops out at around 240 mph (the company announced 80 orders of the trainsets placed by the Chinese government). Bombardier's website touts the fact that they are the world's only manufacturer of planes and trains (still waiting on automobiles). Their latest foray into larger-frame jets -- the CSeries -- has faced continuous criticism and doubts, even as the company courts one of the fastest growing carriers in the world: Qatar Airways. It's been suggested constantly that the CSeries is in doubt, and yet one or two large orders from either Qatar or Chinese-based airlines could save the entire project.
To understand how all of these disparate elements fit together under the roof of a single company requires insights into Chinese protests against lax safety standards when it comes to high-speed rail construction. Bombardier's CEO recently reiterated his confidence in the safety of the rail network. But so too does it require a constant attention to -- and reading of -- Qatar Airways CEO Akbar Al Baker. A mercurial fellow, to say the least, Al Baker has a reputation for shattering the strict etiquette rules of the aviation industry. One comment from Al Baker about the relationship between Bombardier and rivals Boeing (NYSE: BA) and Airbus played a big role in hampering Bombardier's ability to sell the CSeries.
You can't make this stuff up (unless, perhaps, if you're Alice Munro, whose telescopic explorations of Canadian history in the short-story form come the closest to describing what back-country snowmobiling must have been like in the Canada of 1907).
There's no way to account for the whims of a CEO or the safety standards of the Chinese High Speed Rail system in technical analysis.
In an influential essay called "Clues: Roots of an Evidential Paradigm," Italian intellectual Carlo Ginzburg suggests that the history of literary analysis shares a lot with medical science. Ginzburg argues that fictional texts are like medical patients, whose symptoms doctors read for signs of illness and health. So too do we read literary texts with an eye to the way that the smallest details contribute to our understanding of the work as a whole.
In the "Evidential Paradigm" that Ginzburg describes, literary analysis perfectly maps onto the reading of contemporary global corporations, whose reach and productive output can be best interpreted by readers of novels.
Coda: Bombardier has Broken My Heart Before
Of course, it would be foolish (and not in the positive sense that this site tends to mean "Foolish") to recommend buying stocks on the basis of narratives alone. The reason Bombardier has been a great play in the past few months is related precisely to the fact that it was murdered last summer, primarily as skepticism about the future of the CSeries program weighed on the stock. Remember that if you're a novice investor in college or excited to use some of your new paycheck in the market, you should't be dumping tons of money into individual stocks. But at the same time, when you do invest as an individual, think of companies as novels, not as short stories. Their histories are longer, more complicated, and reward patient reading and re-reading.
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The Motley Fool has no positions in the stocks mentioned above. TheHumanist owns shares of Bombardier, but does not have a position in Boeing. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
