Boeing’s accounting conventions are forever tricky because billions of R&D gets classified as inventory and written off over a block of aircraft deliveries. My entry point on Boeing at $300 was based on this key metric at 15 times its market cap. Remember when John Gutfreund, headman at Salomon Brothers, allowed his bond traders to manipulate the auction market for Treasuries? The mid-cap tech index dropped from 50 times earnings to 30 times earnings. The only way I’ve learned to deal with exuberance is to hold no more than 60% of assets in equities while leveraging with impunity the high-yield bond market going out 10 years in duration.

Source: Forbes April 11, 2019 15:56 UTC