Welp, good decision on my part to dump that stock. Three more years of "strong headwinds this year, growth was flat, we'll do better next year". I wonder if he does actually get three more years or if a stockholder revolt removes him.
Don't agree. He is good at crisis management, which is what is needed.
CMStPnP Welp, good decision on my part to dump that stock. Three more years of "strong headwinds this year, growth was flat, we'll do better next year". I wonder if he does actually get three more years or if a stockholder revolt removes him.
You prefered his predecessor, John 'Golden Parachute' Snow, that decreased shareholder value and company effectiveness each year of his reign?
Never too old to have a happy childhood!
BaltACDYou prefered his predecessor, John 'Golden Parachute' Snow, that decreased shareholder value and company effectiveness each year of his reign?
I don't remember stating anywhere that Snow was any better. CSX has fairly crappy Senior Executives and it's no wonder to me that CP gave up on them after just one attempt at an offer. I think I would have skipped the offer stage altogether and just waited for them to drive down the price of CSX stock more.
I will give them credits for attempting to make up for lost coal traffic via expanded use of intermodal but that strategy credit only applies for 1-2 years. Surely they have other ideas out there to add to intermodal.......say like UP's idea of carrying POV's and Dealer Auction cars in autoracks via a seperate subsidiary? It would boost auto traffic and if UP finds it worthwhile, no reason why CSX shouldn't also try it. Especially with it's North-South routes in the Rental Fleet heavy NE and SE U.S.
CSX just is not doing enough to stem the coal traffic erosion with alternative markets.
CMStPnP CSX just is not doing enough to stem the coal traffic erosion with alternative markets.
And which of our railroads is? Of course, it's getting harder every day to get blood out of the turnip, as our free traders and the EPA continue to wring the traffic in real goods out of our economy.
I don't think the CSX stock price has fared any worse than that of other roads since the latest slump commenced last year. They're all back to where they were before the 2014 rush in grain and oil.
CMStPnP BaltACD I don't remember stating anywhere that Snow was any better. CSX has fairly crappy Senior Executives and it's no wonder to me that CP gave up on them after just one attempt at an offer. I think I would have skipped the offer stage altogether and just waited for them to drive down the price of CSX stock more. I will give them credits for attempting to make up for lost coal traffic via expanded use of intermodal but that strategy credit only applies for 1-2 years. Surely they have other ideas out there to add to intermodal.......say like UP's idea of carrying POV's and Dealer Auction cars in autoracks via a seperate subsidiary? It would boost auto traffic and if UP finds it worthwhile, no reason why CSX shouldn't also try it. Especially with it's North-South routes in the Rental Fleet heavy NE and SE U.S. CSX just is not doing enough to stem the coal traffic erosion with alternative markets.
BaltACD
Like you even know what CSX is doing with their automotive traffic?
BaltACDLike you even know what CSX is doing with their automotive traffic?
Your right, it's TOP SECRET information, they would never report on it to the public or the government nor would the automakers in this country report on it......they are all in it together to keep this information secret from the public because letting anyone know about it would be financially devasting.
The thing about buying any stock is that unless you own a sizable number of shares in a company you have no voice, and you have no control. You're basically betting on other people's ability and vision and hoping for the best. You're much better off to buy a gas station or store and run it yourself. That way you've got control over your own investment.
Ulrich The thing about buying any stock is that unless you own a sizable number of shares in a company you have no voice, and you have no control. You're basically betting on other people's ability and vision and hoping for the best. You're much better off to buy a gas station or store and run it yourself. That way you've got control over your own investment.
You have to explain that one to me. Unless I own the Oil Company I really do not have a whole lot of control over a gas station. Unless I own the franchise I likewise do not have a lot of control over a convience store. I have neighbors that own both. Even gas stations with convience stores attached the Oil Company or Franchisor dictates how the convience store is run. Including the setting of prices, who most of your vendors are as well as your marketing.
In regards to investing stock in railroads. I really do not want control I want performance and I have to say that both UP and NS have better plans in place than industry laggard CSX dealing with the downturn in Coal. If this keeps up with CSX they are going to have a reverse stock split in the next 5-7 years.......it's not looking good long-term for CSX.
You'll never have complete control; but if you own 51% or more of something you certainly have MORE control than if you own less than 1%. If you own a gas station you have control over some aspects, like the service you provide, the extras, the location of your gas station, how you go about marketing your business. Granted, your gas station is still a franchise, and as such you're still marching to the oil company's beat. A completely independent business would give you that much more control.. like, say, Ulrich's Fish and Chips.. instead of a McDonald's franchise or an Exxon station.
I own stocks too, but realistically what is stock ownership in a public company? All you're doing is betting on the company and its management. The best you can do is to bet carefully and decide ahead of time how much you're willing to lose and then sell.
CMStPnP BaltACD Like you even know what CSX is doing with their automotive traffic? Your right, it's TOP SECRET information, they would never report on it to the public or the government nor would the automakers in this country report on it......they are all in it together to keep this information secret from the public because letting anyone know about it would be financially devasting.
BaltACD Like you even know what CSX is doing with their automotive traffic?
Well judging from this post...
CMStPnP Surely they have other ideas out there to add to intermodal.......say like UP's idea of carrying POV's and Dealer Auction cars in autoracks via a seperate subsidiary? It would boost auto traffic and if UP finds it worthwhile, no reason why CSX shouldn't also try it.
Surely they have other ideas out there to add to intermodal.......say like UP's idea of carrying POV's and Dealer Auction cars in autoracks via a seperate subsidiary? It would boost auto traffic and if UP finds it worthwhile, no reason why CSX shouldn't also try it.
you have never heard of TDSI.....
https://www.csx.com/index.cfm/customers/value-added-services/product-transloading-and-distribution/total-distribution-services-inc-tdsi/
They haul cars of all sort, new, dealer auctions, lease turn backs, among others. It really isn't that big of a secret, I guess you just missed it.....
http://www.bizjournals.com/prnewswire/press_releases/2015/06/18/FL37886
https://twitter.com/csx/status/643478304817848320
An "expensive model collector"
UlrichUlrich's Fish and Chips
A squished fish on a bun? to quote the Popeyes' commercial.
CMStPnP Ulrich The thing about buying any stock is that unless you own a sizable number of shares in a company you have no voice, and you have no control. You're basically betting on other people's ability and vision and hoping for the best. You're much better off to buy a gas station or store and run it yourself. That way you've got control over your own investment. You have to explain that one to me. Unless I own the Oil Company I really do not have a whole lot of control over a gas station. Unless I own the franchise I likewise do not have a lot of control over a convience store. I have neighbors that own both. Even gas stations with convience stores attached the Oil Company or Franchisor dictates how the convience store is run. Including the setting of prices, who most of your vendors are as well as your marketing. In regards to investing stock in railroads. I really do not want control I want performance and I have to say that both UP and NS have better plans in place than industry laggard CSX dealing with the downturn in Coal. If this keeps up with CSX they are going to have a reverse stock split in the next 5-7 years.......it's not looking good long-term for CSX.
Being a small stockholder, you're also somewhat at the mercy of what the big stockholders want. If they want the company run for short term gain at the expense of long term stability, that's how the company is going to be run.
Of course, I'm still trying to get over the part about the UP having a plan about the loss of coal. But, I guess furloughing everyone and storing engines is a plan.
Jeff
Somebody once said about CSX management, "The smartest bunch of guys who don't know how to run a railroad". I don't agree with that, but I thought it was pretty funny.
It's tough territory, and a tough challenge. They can't just pick up and move - but no one can move in on them either - on rails, but trucks are the competition.
- Paul North.
jeffhergertBeing a small stockholder, you're also somewhat at the mercy of what the big stockholders want. If they want the company run for short term gain at the expense of long term stability, that's how the company is going to be run. Of course, I'm still trying to get over the part about the UP having a plan about the loss of coal. But, I guess furloughing everyone and storing engines is a plan. Jeff
Can I ask just for curiousity sake, what railroad company that you know of that is run for short term gain? Because everyone I see is investing Billions in infrastructure which most would agree is a long-term investment.
Also in regards to UP, stock hasn't declined by up to 50% from it's high as has CSX. Same deal with NS stock. That tells you something about what exactly Wall Street thinks about CSX's current management. They are not punishing CSX's valuation because of it's long-term investments, they are punishing CSX because they have less confidence it has a plan to get through the difficulty.
Additionally, track record of NS and UP at responding to changing market conditions is better.
n012944you have never heard of TDSI..... https://www.csx.com/index.cfm/customers/value-added-services/product-transloading-and-distribution/total-distribution-services-inc-tdsi/ They haul cars of all sort, new, dealer auctions, lease turn backs, among others. It really isn't that big of a secret, I guess you just missed it..... http://www.bizjournals.com/prnewswire/press_releases/2015/06/18/FL37886 https://twitter.com/csx/status/643478304817848320 Add Quote to your Post
Not as comprehensive as UP's entry and does not have the worldwide reach either.........sooo, CSX still falls short, which is kind of sad, IMHO.
https://www.shipcarsnow.com/
If I were a business that shipped cars I would feel a lot more comfortable with the UP offering after reading their website above.
CMStPnPCan I ask just for curiosity's sake, what railroad company you know of that is run for short term gain? Because everyone I see is investing billions in infrastructure which most would agree is a long-term investment.
What he likely means is that much of the company's actions must suit periodic analyst review which often involves quarterly timeframes. I agree that this is not directly relevant to a company with enormous stranded costs which must be made periodically much greater for it to remain competitive, but 'presumably' the analysts involved would recognize this in computing their estimates.
Certain it is, though, that if a railroad company fails to make its quarterly EXPECTED numbers, its stock price ... and hence a substantial aspect of its shareholder value to a substantial number of actual shareholders ... will be affected. Too much of that and it's going to result in 'regime change' at the annual meeting or in a proxy fight. So it's not surprising if much of the incumbent management's attention is focused on inherently short-term objectives, and if maximizing perceived revenue is a substantial aspect of those, short-term gain.
It certainly doesn't mean in the robber-baron sense of 'charge what the traffic will bear' (although come to think of it we see this attitude too often when rates are quoted to customers with 'sole access' or whatever it's called) or gouge the customers and cheat the employees so we can fatten owner and manager pockets. Although, if the Children's Fund business had succeeded, I would expect a nontrivial amount of just that sort of thing to have occurred with CSX by now. It's been mentioned that one of the 'aftermaths' of the Children's Fund affair has been a hyperconcentration of attention by managers on the 'shareholder value' aspect of corporate governance...
Wizlish CMStPnP Can I ask just for curiosity's sake, what railroad company you know of that is run for short term gain? Because everyone I see is investing billions in infrastructure which most would agree is a long-term investment. What he likely means is that much of the company's actions must suit periodic analyst review which often involves quarterly timeframes. I agree that this is not directly relevant to a company with enormous stranded costs which must be made periodically much greater for it to remain competitive, but 'presumably' the analysts involved would recognize this in computing their estimates. Certain it is, though, that if a railroad company fails to make its quarterly EXPECTED numbers, its stock price ... and hence a substantial aspect of its shareholder value to a substantial number of actual shareholders ... will be affected. Too much of that and it's going to result in 'regime change' at the annual meeting or in a proxy fight. So it's not surprising if much of the incumbent management's attention is focused on inherently short-term objectives, and if maximizing perceived revenue is a substantial aspect of those, short-term gain. It certainly doesn't mean in the robber-baron sense of 'charge what the traffic will bear' (although come to think of it we see this attitude too often when rates are quoted to customers with 'sole access' or whatever it's called) or gouge the customers and cheat the employees so we can fatten owner and manager pockets. Although, if the Children's Fund business had succeeded, I would expect a nontrivial amount of just that sort of thing to have occurred with CSX by now. It's been mentioned that one of the 'aftermaths' of the Children's Fund affair has been a hyperconcentration of attention by managers on the 'shareholder value' aspect of corporate governance...
CMStPnP Can I ask just for curiosity's sake, what railroad company you know of that is run for short term gain? Because everyone I see is investing billions in infrastructure which most would agree is a long-term investment.
Thanks, Wizlish. You said it better than I ever could. Much, much better. I also was talking about business in general, not just railroads.
CMStPnP, as others know and have pointed out, I work for Uncle Pete. My home terminal is on the central corridor, the exCNW. I see and live with the effects of the loss of coal. Let's just say that no one has said anything for quite a while on needing a third main track across Iowa and Illinois to handle all the traffic they expected. Work on double tracking the Blair Subdivision has all but stopped and further work isn't expected in the near future, the last I've heard.
Thanks to Chris / CopCarSS for my avatar.
Murphy SidingWhat do you think the railroads should be including in their plans to deal with lessening coal traffic?
You can cut costs. Fairly easy, so that is what is happening now with layoffs and idled locomotives and cars. But it is only a short-term answer and hurts the company, long term. Better to find new revenue streams, but that requires a lot of creativity and hard work, harder than just grabbing the low hanging fruit of the past 10-40 years. Greyhounds knows. And he also knows that suggesting new markets often meets with a lot of "Yes, but" responses. Folks in other business sectors doubtless know that also, first hand.
C&NW, CA&E, MILW, CGW and IC fan
Wizlish: 'sole access' rates are often called "bottleneck" rates (but not always).
Murphy Siding I own part of a lumberyard. I certainly feel like I have a lot more control over that than I do over any of the stocks in my mutual funds. Even if every stock I owned was in one company, 1/10,000 of 1% doesn't give me a feeling like I have any control. As someone pointed out above, I'm just betting that those people that do have enough stock to affect a company do so in a way that benefits me. I can only hope.
People invest in stocks for Capital Growth and return on investment over time, I don't know of anyone that invests for control and I am puzzled as to why you even think this is part of the equation of investing......it's not.
Murphy Siding As far as the coal thing goes, how do you know that CSX, or any railroad for that matter, does or doesn't have a plan? I doubt if this snuck up on the railroads, but it would seem the options are somewhat limited beyond what Jeff mentions- furloughs and parked locomotives.
Thats why companies have investor calls. Go dial in to the last 4 investor calls for CSX if you can find them online, if they are still online.........tell me what you hear when the larger investors ask the Senior Executives the question directly.
jeffhergertCMStPnP, as others know and have pointed out, I work for Uncle Pete. My home terminal is on the central corridor, the exCNW. I see and live with the effects of the loss of coal. Let's just say that no one has said anything for quite a while on needing a third main track across Iowa and Illinois to handle all the traffic they expected. Work on double tracking the Blair Subdivision has all but stopped and further work isn't expected in the near future, the last I've heard.
OK, I would relate that to the downturn in business and I am not sure which railroad made the public statement but one of them stated they would shift away from investing in track for the foreseeable future until things got better Economically. UP is doing great on double tracking the former SP. Also, I am pretty sure the Labor Union would complain if UP continued to spend lavishly in other areas while laying off employees........how is that going to look? So I am not sure that is all a focus on short-term vs long-term.
schlimmYou can cut costs. Fairly easy, so that is what is happening now with layoffs and idled locomotives and cars. But it is only a short-term answer and hurts the company, long term. Better to find new revenue streams, but that requires a lot of creativity and hard work, harder than just grabbing the low hanging fruit of the past 10-40 years. Greyhounds knows. And he also knows that suggesting new markets often meets with a lot of "Yes, but" responses. Folks in other business sectors doubtless know that also, first hand. Add Quote to your Post
Yes I would go with thinking outside the box in a downturn to bring in new lines of business that were neglected in good times.
Prospecting business does not require either the marketing personnel or the carrier to go shouting about what business they are attempting to secure - before they secure it.
CMStPnP OK, I would relate that to the downturn in business and I am not sure which railroad made the public statement but one of them stated they would shift away from investing in track for the foreseeable future until things got better Economically. UP is doing great on double tracking the former SP. Also, I am pretty sure the Labor Union would complain if UP continued to spend lavishly in other areas while laying off employees........how is that going to look? So I am not sure that is all a focus on short-term vs long-term.
Yes, no argument on the UP work down south. They've had growth in intermodal down there. (Some are wondering if the wider Panama Canal will dig into both UP and BNSF intermodal business. Myself, I'm thinking it may not have as big an impact as what others think.) No argument about cutting back where traffic is down. But that's the point, traffic is down and a lot has to do with the loss of coal.
You posted that the UP has better plans to deal with the loss of that business, while I don't think they have a clue, or maybe the desire, to replace it. At least in the areas most affected by the loss. (I'm glad I don't work the Powder River area. Coal is all they have up there.) Most likely replacement traffic is going to be in smaller volumes and require more work to get. It might mean getting ten $10 million dollar contracts instead of one $100 million dollar contract. It's far easier to furlough and store equipment, and that's what they are more inclined to do. (I've posted about a few of those smaller opprotunities in my area that they passed on.) You can only cut so long. Eventually you have to move freight. If they're waiting for the next big thing, they might be waiting a while.
I've had a few co-workers say they think eventually the UP will go bankrupt. I've had a few others ask me if I thought the UP would sell off the corridor we work on. I doubt that either will happen, if either did it would be long after I'm gone, but that shows how optimistic some of the work force is.
jeffhergertYes, no argument on the UP work down south. They've had growth in intermodal down there. (Some are wondering if the wider Panama Canal will dig into both UP and BNSF intermodal business. Myself, I'm thinking it may not have as big an impact as what others think.)
I'm thinking the Panama Canal will have almost zero impact on BNSF and UP intermodal. Historically, we went through this with the Milwaukee Road and large amounts of money to upgrade the Southwestern across Wisconsin and into Illinois on the way to Kansas City because it was thought with the Federal money being spent on the St. Laurence Seaway that the Port of Milwaukee would boom with freight headed for the West Coast.....never happened and the Port of Milwaukee is all but dormant now.
Both the Panama Canal and the proposed Canal through Nicaraqua have some real operating problems at this point in time with their quality of construction / plans. Panama Canal has to really pump large Container ships through it at both a rapid rate and fast speed to compete with West Coast ports and the time it takes to sail down to Central America and back up to the United States again. My view is you would need hydrofoil Container ships running about the speed of the USS Nimitz to do that. Apparently the Engineers and Politicians in Central America have not figured that out yet. I think the impact of the larger Panama Canal will have a much larger impact on Africa and Europe than the United States (look at the projected time to ship goods to Europe West from China vs East from China.....horrible difference there). China's silk railway through Iran and the Middle East isn't going to be faster than ships on the Ocean.........hard to believe but true.
No argument about cutting back where traffic is down. But that's the point, traffic is down and a lot has to do with the loss of coal. You posted that the UP has better plans to deal with the loss of that business, while I don't think they have a clue, or maybe the desire, to replace it. At least in the areas most affected by the loss. (I'm glad I don't work the Powder River area. Coal is all they have up there.)
On the Powder River Basin, I am just speculating here but seems UP has taken a wait and see approach there. They see BNSF's proposal to export the Coal to Asia via a large new West Coast Coal Dock but they want to see if BNSF ever gets past the environmental reviews to construction first. Also, probably waiting to see who the next President is because a large part of the slowdown in coal was caused by our EPA at the behest of the President......read somewhere the Supreme Court was going to rule on that case if they have not already. I think the Supreme Court did rule against the EPA and the EPA gloated that it was too late for the Supreme Court they already raised the cost of Coal Generation in this country by some $20-30 Billion a year via their expanded emission restrictions.......not sure where I read that but I am confident it is at least partly true. Short-term I think we will see a recovery in Coal with the next administration in office. Long-term Coal is going to die because we are on the verge of clean fusion.....pretty close. Even Bill Gates stated that we were on the verge of discovering clean and reneewable energy pretty soon. I think that is probably correct. So regardless of what the current buffoon in the White House did or didn't do, coal is not going to last much longer and alternative traffic should be searched to replace it. I think UP will find some of the replacement traffic when the Fracking boom returns. I thought they or BNSF were experimenting with returning some perishable traffic to the rails. Perhaps the decongestion of Chicago might speed that along a bit.
Most likely replacement traffic is going to be in smaller volumes and require more work to get. It might mean getting ten $10 million dollar contracts instead of one $100 million dollar contract.
Agree, replacement business is always a long slog. Another area where UP could kick some butt is fast frieght trains, pump up the speed more there beyond 70 mph. I think they might experiment with that after PTC is implemented.....we'll see.
It's far easier to furlough and store equipment, and that's what they are more inclined to do. (I've posted about a few of those smaller opprotunities in my area that they passed on.) You can only cut so long. Eventually you have to move freight. If they're waiting for the next big thing, they might be waiting a while. I've had a few co-workers say they think eventually the UP will go bankrupt. I've had a few others ask me if I thought the UP would sell off the corridor we work on. I doubt that either will happen, if either did it would be long after I'm gone, but that shows how optimistic some of the work force is. Jeff
I am bullish on UP, have over $50k in retirement funds invested and climbing. Doubt they will go bankrupt anytime soon. They have to either cut or redeploy people in a downturn or hemmorage cash. I think they are also trying to get their operating ratio down as well as the time it takes them to move cars across their system.......which might appear as cuts but are actually efficiency moves.
I would agree they have not done so well with the ex-C&NW lines at least in Wisconsin. I still scratch my head why they spun off some but kept others. I think the East-West C&NW line across IOWA has a long future ahead of it. Spine line from the Twin Cities to Kansas City........I wonder about but then again there is grain in the fall and Ethanol plants on the spine line...soooo.
I think the other feather in UP's cap are the rail connections to Mexico and NAFTA, thats going to continue to pump more cash as Mexico improves it's economy. Also, UP has a lock on the Houston Petrochemical refining complexes.....thanks to the merger with SP. Even with everyone driving electric cars we will need oil and those refining complexes for oil derivatives like plastics and composites.
CM.... I am not taking issue with your opinion of The President.
Still, for your sake, mine, and other contributors to this forum, and you and everyone else please avoid derogatory nouns or adjectives when describing political or corporate or labor leaders? Or editors and writers and publishers for that matter. If you have facts why a leader is not doing his job or obviously doesn't have a clue, by all means present them. But it can be done without labeling any human being or group of human beings in a derogatory manner.
Like, I can refer to Hitler's Germany as the Nazi era. But it would be wrong for me to label Germans as Nazis, only those who were actually Nazis and/or committed their crimes.
A baffoon is one who causes people to laugh --at him or her.
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