A Religious Revival Aboard Southwest Flight 2578

Dear Fellow Expat,

Southwest Airlines (LUV) flights from Baltimore to Ft. Myers offer the wildest religious experiences you could witness. You’ll become a believer…

During preboarding on these Southwest flights, between 20 to 25 (largely retiree) passengers sit in wheelchairs and wait to board along the wall.

Before general boarding, gate agents wheel pre-boarders down the ramps. The planes are never on time due to the preboarding volume.

Because it’s “open seating,” these passengers always take the front seats of the plane, making an occasional groan or “Dad Sound” when sitting to emphasize their medical condition. From there, a quick two-hour flight comes and goes.

But when it’s time to get off the plane… after we land and taxi…

These travelers have a choice: They can either wait until other passengers deboard so they can receive wheel-chair assistance again… or they can stand and walk up the boarding ramps.

And, Oh, Holy Roller.

It’s as if they had touched the Hand of God on the flight… and He doth provided all-healing ointments to their hips and knees.

They all rise as one like a congregation, curse the wheelchairs like a vampire would garlic, and race up the ramp as if an Early Bird Special dinner awaits on the other side of the gate door…

King Arthur can stop his search. Southwest Flight 2578 may truly be the Fountain of Youth.

For now, let’s get to the market, airline stocks, a liquidity-driven short squeeze, and the future of the Florida Republic.

Airline Stocks in the Republic

The race is on to beat Hurricane Idalia’s weather bands back to the Florida Republic. I moved up my flight to 10:15 a.m. from the previous plan to exit Baltimore at 7 p.m. tonight.

I can’t take a risk – for my wife’s sanity.

Along the way (though the spottiest of airline WIFI quality), airline stocks became a source of interest.

The airports are crowded. Every Delta Sky Club is jam-packed (a testament to the company’s American Express (AXP) partnerships that drive traffic into loyalty credit cards).

So… let’s see if there’s something here.

In early January 2022, we dug under the hood of SkyWest Airlines (SKYW), a regional airline operator.

It owns puddle jumper (short duration) routes on 500 smaller planes and contracts for bigger players like United Airlines (UAL), Delta Air Lines (DAL), and American Airlines (AAL).

When I recommended SKYW, shares traded at $16.50.

Today, these shares popped above $43.00.

At the time, SKYW and other airlines were under pressure due to many macro worries. Would we face a recession? Would we see a massive drop in air traffic? The usual doom and gloom…

But we knew something else – the timing was perfect.


major central banks were loosening monetary policy after the October 2022 S&P 500 500 lows. The Bank of Japan was easing, China was reopening from COVID-19, the Federal Reserve offered support to the housing market, and the Bank of England had capitulated on inflation to save its struggling bond market.

We turned our attention to mathematics to help find a great story in the company. At the time, SKYW shares had a Piotroski F score north of 8 and a Ben Graham score south of 0.5.

This has been an important subject for investors during periods of improving Equity Momentum, and contrarian approaches in real businesses with real profits and real assets.

When Tim Melvin and I covered this at a post-Thanksgiving reading session, it offered a conviction-based strategy that combined the best of Tim’s value investing focus, my focus on macroeconomics and momentum, and our combined appreciation of responsible company management.

Be sure to read more about these metrics here and here.

Now… let’s fast forward eight months…

The cupboard is bare on airline stocks fitting the profile.

That’s okay. We simply exercise patience. We welcome a September selloff or October negative event in the Florida Republic.

It will only allow us an opportunity to snap up stocks that we want to own over the very long term on the cheap.

The basket of names fitting the Piotroski-Graham profile today is in other industries: Shipping, natural gas processing, Permian names, and even paper pulp and manufacturing (which should bottom soon).

But, as you know, I predict the future will incorporate more inflation, more government spending, more debt, and more central bank asset purchases—the same pattern of the last 12 years.

It’s important to keep your eye on real companies with strong management and to use any selloffs to your advantage.

Such strategies are for the Florida Republic members who have time and patience on their hands…

But for anyone looking to make money for a bar tab this weekend… we’ve got something else happening in the broader markets.

The Short Squeeze Is On (As Expected)

As I noted yesterday, money (from many different sources) is moving the market.

A surprise increase in global liquidity fueled a rebound since last Thursday. This price action feels reminiscent of a Short Squeeze that took us into September 2022 before a big selloff.

As I told my live members at Flashpoint Elite yesterday, look to the high short-interest candidates outside of biotech when/if momentum turns positive. These can be short-duration trades with tight trailing stops. You’re not trying to make 100% in a week.

You’re trying to make 10% - even 15% on the stock itself. But you make sure to keep the trailing stops tight – even back at the entry price.

Remember, buying a stock today and speculating doesn’t have a brokerage cost (only an opportunity cost). So, set a tight stop if you want to be a speculator. We don’t control the market… and we must be disciplined if we’re using short-term strategies.

As I’ve said before – I really dislike Beyond Meat (BYND) as a company and as an “investment.”

But I won’t deny its ability to rally when there are changes in monetary policy conditions. There was an 80% pop in January and a similar return when momentum turned positive on May 31.

Nothing changed with this garbage company.

It’s still unprofitable and likely going bankrupt.

But we’ve seen a sharp drop in global liquidity stress recently and additional easing out of China’s central bank.

It's not a coincidence that more liquidity is pumping these unprofitable stocks (risk assets) higher in short periods of time as short sellers are forced to cover their positions.

Speculate wisely.

Good News from the Florida Republic

Last night, I had dinner with several new friends at an incredible farm just west of my hometown of Towson, Maryland.

It had many of the things I miss about Central Maryland: Corn acres, long driveways leading to rustic homes, wild animals (on the walls or roaming outside), great conversation, and – the Two Degrees of Separation that comes with growing up near Baltimore.

It’s a city where everyone knows you – or knows your father. And everyone knows my father. For example, a dinner guest was the nephew of one of my father’s closest friends for 30-plus years.

We’d never met.

Others knew my family’s Irish pub well or at least spoke of the nights they’d struggled to remember (Jameson will do that.)

Portions of our dinner and post-dinner conversation centered on this publication… it’s future… how it fits into the ecosystem of financial research, storytelling, idea generation, and investigative journalism. It was all extremely promising.

After a month of some uncertainty on how to expand Republic Research, build its community, and deliver outstanding ideas and investment research to a bigger audience, I’m re-energized.

You are among the earliest members of this community. After 11 years in this industry, a chance emerges to do something unique – different than what we typically see in this industry.

It was worth the wait…

Do what you love, the rest eventually comes.

For me, it all starts at the edge of an agricultural swamp. The Florida Republic: full of Long Drink, an independent state of mind, and two decades of research I’m eager to deliver to you.

But before we get there, I want to thank you for joining me on this journey. If I can make you laugh, make you think, help you see the markets a bit differently, or even swell your emotions…

Then I did the most difficult part of the job. The other parts – investment and trading ideas - come easy. I just want to express my gratitude and to offer a personal quote with double meaning…

“If you can’t be grateful, you won’t be anything.”

In the interest of the Republic’s rule of radical transparency – I’ll share more with you on our publishing developments soon.

For now, “It’s time to close the shutters… It’s time to go inside.”

Hurricane Idalia awaits.

Stay positive,

Garrett Baldwin

Secretary of Finance

You can download a copy of this postcard by clicking here.