The U.S. Global Jets ETF (JETS) Is A Disaster Out Of The Gate

Sometime this spring, U.S. Global Investors is going to launch The U.S. Global Jets ETF that is an index fund for airline companies. The ticker symbol will be the cutesy JETS and it’s something you will be able to buy in the next month or two. Of course, if you’ve been reading my work for a while, you already know what I’m going to say: Stay far, far away from this creation.

Famous investors have long pointed out that long-term investing in the airline industry is not a reliable way to make money. Some say it in a matter-of-fact way—when Donald Yacktman was asked what airline stocks he owns, he responded, “Zero. Clients invest with me because they expect me to make money for them.” Even Richard Branson, who started Virgin Airlines, stated that the “fastest way to become a millionaire is to buy a billionaire his own airline.” When Warren Buffett invested $358 million in USAir Group, he had to write off the entire investment as a loss and later said, “If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down. The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit.”

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