They have nothing of value and collect money.
1st why are you limited to only those two choices?
2nd almost any company can have something bad happen and the stock drops (oil spill, food recall, drug side effects, network outages (cable, cell phones, electric company,) automotive ignition problems, etc.
Airlines are not volatile because of a crash it has more to do with fuel prices.
When a disaster does happen stocks usually tend to rebound over time (Look at the BP oil spill in the Gulf of Mexico)
If you want something of a more secure investment consider Mutual Funds or Exchange Traded Funds (ETFs). You can purchase a fund of transportation stocks and own several airlines, railroads, automotive, etc stocks all at once. If one airline has a crash the other airlines will pick up the displaced travelers. Most people don't stop traveling, but they might consider alternative modes of transportation.
Crashes are not the issue with airlines. Its their business model. Most of them have filed bankruptcy in the past, some more more than once. They have high competition and high costs and in the past they have had overcapacity and they have no pricing pressure. Its been hard for them to raise prices because of so much capacity in the industry and competition.. Insurance companies have a lot of competition too and its a commodity business. Insurance is insurance, it all basically works the same way. But they can invest the premiums they collect. Thats why Warren Buffet is in the insurance business. Of the two I would probably go with insurance
I have heard bad things about investing in airlines because if a plane crashes then stock prices usually go down since people aren't flying.
Insurance companies pay large amounts of money to people when a disaster happens.
Which is a better investment??
thanks
