We would like to take this opportunity to briefly explain Jet.AI’s broad
economic principles of operation. The world’s most successful capital
allocator, Warren Buffet, has shared
his principles, and because we agree with him, we have edited and repurposed his
Owner-Related Business Principles for Jet.AI.
OWNER-RELATED BUSINESS PRINCIPLES
Below we set down 5 owner-related business principles that we think may help
new shareholders understand our managerial approach.
- Although our form is corporate, our attitude is partnership. We think
of our shareholders as owner-partners, and of ourselves as managing
partners. We do not view the company itself as the ultimate owner of
our business assets but instead view the company as a conduit through
which our shareholders own the assets.
We hope that you do not think of yourself as merely owning a piece of paper
which is a candidate for sale when some economic or political event makes
you nervous. We hope you instead visualize yourself as a part owner of a
business that you expect to stay with indefinitely, much as you might if you
owned a farm or apartment house in partnership with members of your family.
For our part, we do not view shareholders as faceless members of an
ever-shifting crowd, but rather as co-venturers who have entrusted their
funds to us for what may well turn out to be the remainder of their lives.
If we have good long-term expectations, short-term price changes (though
psychologically vivid) are meaningless for us except to the extent they
offer us an opportunity to increase our ownership at an attractive price.
- Our long-term economic goal is to maximize Jet.AI’s average annual
rate of gain in intrinsic business value on a per-share basis. We do
not measure the economic significance or performance of Jet.AI by its
size; we measure by per-share progress.
Over time, we expect our business to exceed our expectations. But sometimes
we have disappointments, and we will try to be as candid in informing you
about those as we are in describing the happier experiences. When we use
unconventional aviation measures to chart our progress, we will try to
explain these concepts and why we regard them as important. In other words,
we believe in telling you how we think so that you can evaluate not only the
business but also assess our approach to management and capital allocation.
- We use debt responsibly. We will reject interesting opportunities
rather than over-leverage our balance sheet. This conservatism may
penalize our results but it is the only behavior that leaves us
comfortable, considering the economic sensitivity of air travel, and
many equity holders who have committed portions of their net worth to
our care. (As one of the Indianapolis “500” winners said: “To finish
first, you must first finish.”)
The financial calculus that we employ would never permit our trading a good
night’s sleep for a shot at a few extra percentage points of return. We’ve
never believed in risking what we have and need in order to pursue what we
don’t have and don’t need. In our present configuration, we expect outright
borrowings to be at the aircraft level, loans that are non-recourse to the
parent, Jet.AI Inc.
- We feel noble intentions should be checked periodically against
results. We test the wisdom of retaining earnings by assessing whether
retention, over time, delivers shareholders at least $1 of market
value for each $1 retained.
- We will be communicating with you through our filings with the SEC,
the investor section of our website and social media. Although we
would like to communicate on a one-on-one basis, that isn’t feasible
given Jet.AI’s many thousands of owners. We will, however, be candid
in our reporting to you. Our guideline is to tell you the business
facts that we would want to know if our positions were reversed. We
owe you no less. We also believe candor benefits us as managers: The
manager who misleads others in public may eventually mislead himself
in private.
In all of our communications, we try to make sure that no single shareholder
gets an edge: Our goal is to have all of our owners updated at the same
time. At Jet.AI you will find no “big bath” accounting maneuvers or
restructurings nor any “smoothing” of quarterly or annual results. We will
always tell you how many strokes we have taken on each hole and never play
around with the scorecard. When the numbers are a very rough “guesstimate,”
as they necessarily must be in some cases, we will try to be both consistent
and conservative in our approach. Thank you again for allowing us to act as
stewards of your capital. We look forward to reporting progress in the days
ahead and appreciate your support.