The essence of the move in the airlines -- a move that I think will be multiyear -- is that nobody's building out airports and you can't get new planes any time soon given the global demand. So US Airways (LCC), United Continental (UAL - Get Report), Delta (DAL - Get Report) and Spirit (SAVE - Get Report) don't have to worry about willy-nilly competition -- the first time I can recall that being the case. Hence, it's the first time that I have ever recommended these stocks. That's why I expect profits to come for US Airways when it completes its merger with AMR (AAMRQ). Capacity takeout just when you expect additional planes and routes to come on. Nobody's building, profits are coming.
Don't build more cars and the profits will come: That's the essence of the rent-a-car business. Right now, there aren't enough autos to go around, the consolidation is immense and the price increases are bountiful. If it weren't for Hurricane Sandy, pricing might not have been that tight, but right now, getting a rent-a-car is difficult because of the capacity constraints. How can you not want to own Hertz (HTZ - Get Report) in that situation?
Don't build it and the profits will come to the refiners. This business has been hellish because the profit margins have been so horrendous and the competition so vibrant. But there hasn't been a new refinery built in 40 years, many have been taken out of service and so much oil is being drilled in the U.S. now that the remaining refiners can refine it here and sell it overseas for terrific prices. HollyFrontier (HFC) is in the best shape to profit from this lack of new capacity and arbitrage between cheap domestic oil and expensive foreign gasoline.
Don't build it and they will come. Isn't that how Cheniere Energy (LNG - Get Report) has been able to levitate, along with Cheniere Energy Partners (CQP - Get Report)? These two long-time recommendations of mine have been busting out because it looks like the lobbying effort to stop the export of natural gas is succeeding, and that means Cheniere has a virtual monopoly on the export of our plentiful natural gas. The amazing signing up of contracts by co-founder and CEO Charif Souki continues, and the profits from being a monopoly will be gigantic once the trains are completed.
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