On another forum someone begged the question of CSX potentially selling 8,000 miles of track. IMO that would be a substantial loss if coal makes a come-back and CSX would be the loser should it happen that coal becomes the new Green energy.
From my point of view it appears Mantle Ridge is calling the shots in an attempt to profit. Hedge funds are not stockholder friendly. They want quick turnover so they can reap [rape] the company and those whose incomes depend on stock dividends.
I would ask whether Paul Hilal and Mantle Ridge is any different than the corporate raider Carl Ichan of a few decades ago. Do either give any consideration to those who have invested their life savings in a corporation so they may enjoy the [so-called] Golden years.
Your rational thoughts are welcome.
Norm
Unless the price of natural gas rises dramatically, it is unlikely that coal will come back as a fuel for power plants for economic reasons. The FERC, which is staffed by Trump appointees, recently rejected an attempt to subsidize coal-fired plants. The CEO of Murray Coal Co. was the main force behind this attempt.
Norm48327I would ask whether Paul Hilal and Mantle Ridge is any different than the corporate raider Carl Ichan of a few decades ago. Do either give any consideration to those who have invested their life savings in a corporation so they may enjoy the [so-called] Golden years.
As you said in another thread Norm, there are 2 sides to any issue.
Hilal/Mantle Ridge are not doing anything illegal, they are just playing the "capitalism" game by a different set of priorities. Although it's a shame to anticipate what will be left of CSX once the endgame has been played, they are within their rights to do as they are doing. Mantle Ridge paid for the right to do what they are doing when they "bought in" to the game.
The guy who has a controlling interest gets to steer the ship, and the marginal or incremental investors are just along for the ride. This is nothing new, it's been going on in various fashions for over a century. It's the way our system is set up.
Mantle Ridge had to buy-in big to gain the control they currently enjoy, and a lot of your "mom-n-pop" types no doubt sold their nest egg, took the money and ran, and maybe that's what a lot of the other smaller investors need to do, before it's too late.
Sentimentality has no place in any consideration crucial to your survival. A couple decades ago when IBM appeared headed for oblivion, a couple of inspired souls took a fresh look at their predicament and realized that it was their own sacred cows that were eating them out of house and home. Perhaps it's time for those "golden years" free riders you speak of to look for a new benefactor?
It may be that if this sell off happens that consequences will be extreme. All but the largest shippers will be left out or have to depend on an overloaded NS. The result may be east of the Mississippi river a mess that will make the CR meltdown just a rehearsal ?
Convicted OnePerhaps it's time for those "golden years" free riders you speak of to look for a new benefactor?
Given the number of vampire investor types around these days, I would opine that the possibility of finding a new benefactor that's not subject to the same threats as CSX is seeing is becoming rare.
Many are in it not for the long term investment, but for the fast buck.
Most "golden years" investors aren't there to play the stock market - ie, gamble. They just want a reasonably secure place to put their money so they can see perhaps enough gain to cover inflation and make those golden years a little more enjoyable. I wouldn't consider that a "free ride." Even a bank savings account isn't worth it any more. I'm wondering when the banks will start charging us for the task of holding our money...
So they invest in a nice, solid company like CSX, only to have the vampire investors gut their nest egg. I've seen what happens.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
The great unkonwn in all the turmoil is what Cindy Sanborn may or may not be putting together. I may be wrong, but I had heard she was the largest individual investor in CSX with only institutional investors having larger stakes.
Never too old to have a happy childhood!
Convicted One Norm48327 I would ask whether Paul Hilal and Mantle Ridge is any different than the corporate raider Carl Ichan of a few decades ago. Do either give any consideration to those who have invested their life savings in a corporation so they may enjoy the [so-called] Golden years. As you said in another thread Norm, there are 2 sides to any issue. Hilal/Mantle Ridge are not doing anything illegal, they are just playing the "capitalism" game by a different set of priorities. Although it's a shame to anticipate what will be left of CSX once the endgame has been played, they are within their rights to do as they are doing. Mantle Ridge paid for the right to do what they are doing when they "bought in" to the game. The guy who has a controlling interest gets to steer the ship, and the marginal or incremental investors are just along for the ride. This is nothing new, it's been going on in various fashions for over a century. It's the way our system is set up. Mantle Ridge had to buy-in big to gain the control they currently enjoy, and a lot of your "mom-n-pop" types no doubt sold their nest egg, took the money and ran, and maybe that's what a lot of the other smaller investors need to do, before it's too late. Sentimentality has no place in any consideration crucial to your survival. A couple decades ago when IBM appeared headed for oblivion, a couple of inspired souls took a fresh look at their predicament and realized that it was their own sacred cows that were eating them out of house and home. Perhaps it's time for those "golden years" free riders you speak of to look for a new benefactor?
Norm48327 I would ask whether Paul Hilal and Mantle Ridge is any different than the corporate raider Carl Ichan of a few decades ago. Do either give any consideration to those who have invested their life savings in a corporation so they may enjoy the [so-called] Golden years.
They didn't, and i don't think, own enough shares on their own to call the shots. All they had to do is convince enough shareholders who's holdings added together create a majority. They promised their way leads to bigger returns and enough believed them to bring in EHH. I'd bet many of those shareholders who jumped on the bandwagon also don't care about how the long term turns out. They'll get out long before the emotional support chickens come home to roost.
I'm starting to wonder if it might be better for the industry as a whole if class ones did sell/spin off branch and secondary lines to short lines and regionals. Then they could concentrate on line haul moves. More and more it seems like they are finding reasons to pass by business. Business most of the smaller railroads would love to have. The small RRs could do the pick up and delivery at the ends while the long haul would still usually be by class one.
Jeff
It always amazes me that so many railfans think that railroads are in business to run trains rather than make a profit for the owners. There is no such thing as the "long term" any more. I can remember the days when we would do one, three, five and ten year plans. Now even one is pushing it. If you've put all of your savings into one company you have a flawed investment plan. Go to a reputable, certified investment advisor and have him/her diversify your portfolio so that you have less risk of losing it all. There is no such thing as a 100% safe investment that pays a good return. As far as Mantle Ridge doing what it wants with CSX, remember the golden rule, "He/she who owns the gold, gets to make the rules."
tree68Most "golden years" investors aren't there to play the stock market
Tree68,
I agree with the majority of everything you posted to me. And I hope that I didn't give you the idea that I have enthusiasm for what Mantle Ridge is doing.
Nonetheless, the current conditions did not evolve in a vacuum. Evidently a sufficient proportion of stockholders listened to Mantle Ridge's lotus song and the message they heard they liked better than the status quo, or Mantle Ridge would not be in the position they are in now.
As for the small investor, I guess that "buyer beware" is just as applicable to participation in the stock market as it is to buying used cars? Mutual funds are probably a safer vehicle for small investors not wishing to have an active involvement in the nuts and bolts side of the market.
The hedge funds likely view mom-n-pop investors in much the same light that railroaders view "foamers". Is it really fair to expect the entire enterprise to be run for the benefit of sentimental enthusiasts?
jeffhergertI'm starting to wonder if it might be better for the industry as a whole if class ones did sell/spin off branch and secondary lines to short lines and regionals. Then they could concentrate on line haul moves. More and more it seems like they are finding reasons to pass by business. Business most of the smaller railroads would love to have.
More in line with Norm's thread title, I tend to agree with you. The railfans lamenting over CSX's stated ambition to sell off 8,000 miles, perhaps should be looking forward to new opportunities after new operators who actually have an interest in growing local business take over, as opposed to the apparent tunnel vision of the class 1's whose sole interst appears to be longhaul.
runnerdude48It always amazes me that so many railfans think that railroads are in business to run trains rather than make a profit for the owners.
I think that extends beyond railfans.
It's my take that there is making a profit, then there is making a profit.
A long term investor is looking for a nice, stable company that will provide stable growth and be there down the road. They certainly want the company to make a profit so it can continue to grow and pay dividends.
The short term investors want their profits NOW, the future be danged. If they can't wring anything else out of a company, they'll take their money elsewhere.
And there lies the difference.
I agree that a diversified portfolio is best - but what's going on with CSX makes it hard to believe that any industry can be stable enouigh to invest in.
Of course, there's always orange juice futures...
Just watch out for the Duke brothers for the FCOJ reports... :)
Quoting tree68: "Of course, there's always orange juice futures." As in the movie "Trading Places'?
Johnny
tree68I agree that a diversified portfolio is best - but what's going on with CSX makes it hard to believe that any industry can be stable enouigh to invest in.
Before we shed too many tears for the "abused" golden age stockholders of CSX, answer one quastion for me. At what point in time was the value of CSX stock at it's absolute highest?
Convicted One tree68 I agree that a diversified portfolio is best - but what's going on with CSX makes it hard to believe that any industry can be stable enouigh to invest in. Before we shed too many tears for the "abused" golden age stockholders of CSX, answer one quastion for me. At what point in time was the value of CSX stock at it's absolute highest?
tree68 I agree that a diversified portfolio is best - but what's going on with CSX makes it hard to believe that any industry can be stable enouigh to invest in.
What was the value of PRR & NYC stock shortly prior to the PC merger? Memory (which mine is falible) thinks that both companies were declaring profits and dividends prior to the merger. Book cooking can show virtually anything management wants it to show - until there is absolutely nothing of value left.
rdamon
So then, what we see is that small time investors who are unhappy with the direction Mantle Ridge is presently taking the company, are in fact not captive victims of any stategy beyond their control, and can sell at an escape price more likely than not to be greater than their personal outlay? Doesn't sound like the golden-years stockholders have been victimized just yet?
Or, of course, some might prefer to stay in the game, but all have that choice as of now.....
http://www.railwayage.com/index.php/blogs/frank-n-wilner/csx-stb-and-confusion-to-the-enemy%E2%80%9D.html?channel=00
As part of my investments, I have bought both NS & UP stock. I was planning to buy BNSF but Mr. Buffet preempted me. I made my decision to buy NS after observing how well they maintained their track after I rode behind 611 and saw the ROW's condition. Similarly with the UP. I also considered how they operated. I didn't like the number of slow orders I saw on the CSX system. But it can be hard to judge unless you see a lot of area. I still read too many negatives about CSX. UP had its Houston meltdown after merging with SP. NS & CSX had issues while digesting Conrail but that might have been to be expected. I expect the new tax rules should improve the earnings and I have hopes the stock will gain in value. NS recently increased the dividend. I anticipate the others will also increase theirs within the year. Whether they will flow any of the tax benefits through to their employees (ala Starbucks) is doubtful.
rdamon When the people who make the decisions heavily compensated for quarterly or annual performance, you will get a quarterly or annual vision. Just watch out for the Duke brothers for the FCOJ reports... :)
Thanks to Chris / CopCarSS for my avatar.
BaltACD The great unkonwn in all the turmoil is what Cindy Sanborn may or may not be putting together. I may be wrong, but I had heard she was the largest individual investor in CSX with only institutional investors having larger stakes.
Cindy Sanborn is going to be a UP Regional Vice President.
https://www.up.com/media/releases/180126-cindy-sanborn.htm
jeffhergert BaltACD The great unkonwn in all the turmoil is what Cindy Sanborn may or may not be putting together. I may be wrong, but I had heard she was the largest individual investor in CSX with only institutional investors having larger stakes. Cindy Sanborn is going to be a UP Regional Vice President. https://www.up.com/media/releases/180126-cindy-sanborn.htm Jeff
I guess she will no longer be keeping her CSX Engineers Certification active.
Norm48327r rational thoughts
Could this divesture possibly be a harbinger of an entirely new business model for the big class ones where CSX, NS, UP, etc will not even own rail lines or equipment but only be a service company at the end of an 800 number that will broker deals between subcontractors to arrange shipment by rail?
Perhaps all the rail lines might end up belonging to REITs, all rolling stock and locomotives belonging to leasing companies, and road crews working for open shop specialty contractors whose territories, as small as a crew district in some instances, or as large as current divisions in others, are put out to bid periodically. Paying the REIT's by the ton-mile for the distance they travel.
Under such an arrangement the special value CSX, or the others, would provide would be to connect the dots between a customer's stated points of origin and destination. Just something to ponder
28 hour days...6 days in a week...
They are in business to run trains. If they do their business well they might make a profit. It never works to do anything "for the money."
XOTOWERThey are in business to run trains. If they do their business well they might make a profit. It never works to do anything "for the money."
The railroad corporations of the 21st Century are in the business to make money, they view the costs of operating trains and servicing customers as a drain to the corporations bottom line.
This is similar to 21st Century race car engineers viewing the driver as the impedement to the brilliance of their designs - just 60-80 Kilos of dead weight in their grand designs.
Convicted OnePerhaps all the rail lines might end up belonging to REITs, all rolling stock and locomotives belonging to leasing companies, and road crews working for open shop specialty contractors whose territories, as small as a crew district in some instances, or as large as current divisions in others, are put out to bid periodically. Paying the REIT's by the ton-mile for the distance they travel.
Did someone mention "open access?"
tree68Did someone mention "open access?"
I seriously considered doing exactly that, with an off hand reference to Futuremodal, but hit the {SUBMIT} button before I should have
Convicted One Perhaps all the rail lines might end up belonging to REITs, ...
Perhaps all the rail lines might end up belonging to REITs, ...
REITs want to own real estate that they can put in use to create maximum return. There are too many restrictions on owning rail lines that would limit their options on putting the rail property to other uses.
I'm not so sure that inability to "repurpose" would be the ultimate kiss of death. Some of these lines would have a pretty significant revenue stream, of the sort "patient" money just loves.
Sometimes all it takes is an individual with exceptional vision to seize opportunity invisible to the rest of us.
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