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If Pensions are becoming passe so where is new money going to come from to invest in railroads and industry

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Posted by K. P. Harrier on Monday, March 16, 2015 1:05 AM

A railfan colleague of mine was asked the question of this thread, and he conveyed that Warrant Buffett knows exactly where, and that is why his Berkshire-Hathaway bought BNSF …

----------------------------------------------------------------------------------------------------------------------------------- K.P.’s absolute “theorem” from early, early childhood that he has seen over and over and over again: Those that CAUSE a problem in the first place will act the most violently if questioned or exposed.

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Posted by CShaveRR on Sunday, March 15, 2015 12:57 PM

Isn't that "RoC Co'Cola"?  (I think that's how Ray stevens sang it.)

I saw RC as an option in a smaller local restaurant within the past year (I had Diet Rite); that is usually a sign of an establishment not worth frequenting again.

Carl

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Posted by Paul_D_North_Jr on Saturday, March 14, 2015 9:43 PM

jeffhergert
 

Paul_D_North_Jr

WORSE, MANY OF THE 'STOCK PICKERS' DON'T DO ANY BETTER THAN MONKEYS THROWING DARTS AT THE STOCK LISTING PAGE OF THE WALL STREET JOURNAL (several academic studies over the years have shown this to be literally true).  

  

Jeff 

The standard premise of that is with enough monkeys and typewriters - or today, computers with word-processing software (an infinite number of each), at least one of the monkeys will eventually start typing Shakespeare's plays . . . Whistling

Actually, with an infinite number of monkeys, at least one - and more accurately, many (technically, a likewise infinite number, but I digress . . . ) - will immediately start typing the Shakespearean plays !

And as for what the other monkeys are typing up ? 

Mischief I'm convinced their output becomes credit reports . . . sure seems like portions of mine have been created that way (Employer A's name at Employer B's address for Employer C's time, credit accounts that I never actually opened mysteriously appeared after a bank merger, etc.), and these errors persisted though changed in details after I tried to correct them by the directed procedure.  Fortunately, none of this nonsense adversely affected my credit score as far as I know, but still . . . Grumpy  

- Paul North. 

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by Phoebe Vet on Saturday, March 14, 2015 4:10 PM

And there are just as many people who will NEVER be able to retire.

We have taken this thread far enough off course.  I quit.

Dave

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Posted by dakotafred on Saturday, March 14, 2015 3:55 PM

We don't have to wait; successful 401K retirements are all around us now, and have been for some time.

One problem with those defined-benefit plans is that they're only as good as the continuing health of the company. (Ask former Enron employees.) Another is, unscrupulous employers are given the opportunity to cheat by forcing people out before they become fully vested.

Of course, many people think other people -- never themselves -- are too stupid to make their own arrangements. There are whole governments based on that proposition.

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Posted by Phoebe Vet on Saturday, March 14, 2015 8:32 AM

I'm not talking about Social Security, unless your plan is to eliminate it.  I am talking about the demise of defined benefit pension plans.

I would make a wager with you, but neither of us will be around long enough to collect.

Dave

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Posted by dakotafred on Saturday, March 14, 2015 7:54 AM

Murphy Siding
 
Phoebe Vet

 

 
greyhounds
 
Phoebe Vet
Just wait until all those people with self managed retirement savings retire. It will be an eye opener.

 

OH, I'm not so sure.  Some of us having "self managed retirement savings" might just surprise you with our uncanny ability to actually take care of ourselves like free, independent adults.  I'll start to find out in about 21 months and 18 days (but who's counting?)  I'll let you know.

Yes, I will participate in Medicare and Social Security.  It's not as if I was given much of a choice.

 

 

 

You cannot apply YOUR success across the board..........

 

 

 

  I don't know that you can apply the lack of success(?) of some of the folks you know of accross the board either.  How would their situations turned out differently if they didn't have self managed retirement savings?

 

 

Exactly right. If Social Security is so great, why do people still even bother to put money away elsewhere for their old age?

Because some people have a less-than-prosperous retirement is a poor reason to foresee (wish?) bad luck for everybody else.

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Posted by Murphy Siding on Saturday, March 14, 2015 7:40 AM

Phoebe Vet

 

 
greyhounds
 
Phoebe Vet
Just wait until all those people with self managed retirement savings retire. It will be an eye opener.

 

OH, I'm not so sure.  Some of us having "self managed retirement savings" might just surprise you with our uncanny ability to actually take care of ourselves like free, independent adults.  I'll start to find out in about 21 months and 18 days (but who's counting?)  I'll let you know.

Yes, I will participate in Medicare and Social Security.  It's not as if I was given much of a choice.

 

 

 

You cannot apply YOUR success across the board..........

 

  I don't know that you can apply the lack of success(?) of some of the folks you know of accross the board either.  How would their situations turned out differently if they didn't have self managed retirement savings?

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Posted by Phoebe Vet on Saturday, March 14, 2015 7:19 AM

greyhounds
 
Phoebe Vet
Just wait until all those people with self managed retirement savings retire. It will be an eye opener.

 

OH, I'm not so sure.  Some of us having "self managed retirement savings" might just surprise you with our uncanny ability to actually take care of ourselves like free, independent adults.  I'll start to find out in about 21 months and 18 days (but who's counting?)  I'll let you know.

Yes, I will participate in Medicare and Social Security.  It's not as if I was given much of a choice.

 

You cannot apply YOUR success across the board.

A person working in retail, houskeeping, or any other job that pays less than $20K cannot possibly put away enough money to support themselves in retirement.

I personally know a person who wiped her 401K out when she had a medical emergency.  I know two other people who withdrew all of theirs to avoid bankruptcy after their job evaporated in the big recession.

A HUGE portion of the population will not have enough to sustain them more than a couple of years.

Dave

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Posted by greyhounds on Friday, March 13, 2015 11:13 PM

Phoebe Vet
Just wait until all those people with self managed retirement savings retire. It will be an eye opener.

OH, I'm not so sure.  Some of us having "self managed retirement savings" might just surprise you with our uncanny ability to actually take care of ourselves like free, independent adults.  I'll start to find out in about 21 months and 18 days (but who's counting?)  I'll let you know.

Yes, I will participate in Medicare and Social Security.  It's not as if I was given much of a choice.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by tree68 on Friday, March 13, 2015 9:59 PM

We can get RC here in the upper reaches of NY state.  I like it.  Used to drink a fair amount whilst at USAF tech school at Chanute AFB.

LarryWhistling
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Posted by Murphy Siding on Friday, March 13, 2015 9:55 PM

Deggesty

 

 
Murphy Siding

     The last time I saw RC cola was in vending machines in western Wisconsin.

 

 

 

How far back was that? Maybe I will remember to look for the beverage next month, when I am in the land where people know the right way to talk.

 

 

 Yikes!  It may have been a while.  The bottles were glass, and the machine didn't take dollar bills. Surprise

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Posted by Ulrich on Friday, March 13, 2015 9:44 PM

Just don't stand too close to an open flame..

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Posted by SALfan on Friday, March 13, 2015 9:41 PM

Deggesty

 

 
SALfan
 
zugmann

 

 
Murphy Siding

Two words:  Moon pies.

 

 

 

 

With RC Cola?

 

 

 

Breakfast of champions!

 

 

 

Champion Moon Pie eaters? or RC Cola swiggers?

 

 

Having the excellent taste to appreciate the finer things in life, like RC Cola and Moon Pies, makes one a champion-type person.

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Posted by Deggesty on Friday, March 13, 2015 9:18 PM

Murphy Siding

     The last time I saw RC cola was in vending machines in western Wisconsin.

 

How far back was that? Maybe I will remember to look for the beverage next month, when I am in the land where people know the right way to talk.

Johnny

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Posted by Deggesty on Friday, March 13, 2015 9:15 PM

SALfan
 
zugmann

 

 
Murphy Siding

Two words:  Moon pies.

 

 

 

 

With RC Cola?

 

 

 

Breakfast of champions!

 

Champion Moon Pie eaters? or RC Cola swiggers?

Johnny

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Posted by Deggesty on Friday, March 13, 2015 9:14 PM

Ulrich

That's Dickens, not Shakespeare..don't confuse the monkeys..

 

The monkeys would probably do as well with either author, though we might have to interpret some of their words.

Johnny

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Posted by Murphy Siding on Friday, March 13, 2015 9:10 PM

     The last time I saw RC cola was in vending machines in western Wisconsin.

Thanks to Chris / CopCarSS for my avatar.

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Posted by Deggesty on Thursday, March 12, 2015 9:00 PM

zugmann
 
Murphy Siding

Two words:  Moon pies.

 

 

 

 

With RC Cola?

 

That was the standard accompaniment sixty and more years ago. It's been a while since I saw an RC Cola; perhaps I live in the wrong area of the country now.

For the benefit of any of you who never saw or drank an RC Cola, the full name is Royal Crown Cola.

Johnny

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Posted by Ulrich on Thursday, March 12, 2015 8:41 PM

Sounds like a recipe for seriously bad gas..

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Posted by SALfan on Thursday, March 12, 2015 7:04 PM

zugmann

 

 
Murphy Siding

Two words:  Moon pies.

 

 

 

 

With RC Cola?

 

Breakfast of champions!

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Posted by MP173 on Thursday, March 12, 2015 5:14 PM

I am stunned by the returns of CN (Illinois Central prior to merger) in the 20 years it has been held.  I am also stunned at how quickly that time has passed.

Ed

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Posted by Ulrich on Thursday, March 12, 2015 7:53 AM

We are fortunate to be railfans... if you did nothing else but invest in rail stock 20 years ago then your investment has outperformed the market by a wide margin, and there's no sign the party is over yet. 

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Posted by MP173 on Thursday, March 12, 2015 7:47 AM

Phoebe:

You are correct...many people have not planned adequately.  Social Security is in place for a percentage of earnings. 

Pension plans had flaws, but if a person did stay with one company for 20 years there was a pension payout.  The days of cradle to grave employment are long gone tho.

Ed

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Posted by Phoebe Vet on Thursday, March 12, 2015 7:40 AM

Just wait until all those people with self managed retirement savings retire.

It will be an eye opener.

Dave

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Posted by MP173 on Wednesday, March 11, 2015 9:33 PM

Paul:

Have you ever visited the bogelhead.com forum?  It is dedicated to the principals of John Bogel, the founder of Vanguard.  Quite a group of passionate passive investors.  I straddle the fence, using Vanguard for bond funds, due to their very low costs and also use some index funds, but stray from the reservation with my individual stock holdings.

We all get along pretty well for the most part.

Railroads have no problem in attracting necessary capital.  Most rails have a capital structure of about 40% debt/ 60% equity.  Most of the equity is in the form of retained earnings.  As Paul indicated the debt paper of the railroads these days is quite popular.

In fact the railroads are generating so much free cash flow these days that they are not only using about 20% of revenue for investment purposes, but also are returning considerable amounts back to the investors.  Consider the following for CN:

2014 revenues   -  $11.6 B

Reinvestment     -  $ 2.138B - this is primarily in form of added equipment, replacement of track, etc.

Dividends           - $.795 B ($795 million returned to shareholders)

Stock repurchased - $1.4B (reduced the total number of shares by 17 million during 2014.

Simple math indicates that if CN really need more cash for investing purposes then another $2.1B would be available by suspending dividends and share buybacks.  Realistically, it would be difficult to eliminate the dividends, as the equity market would react negetively, but the $1.4B would be readily available.

So, when one reads on this forum that railroads need cash for capacity issues, one must simply follow the money and realize they are choosing to allocate only a portion of their cash to their business and returning a similar amount to the owners.

Paul, if you havent done so...checkout the bogelheads forum.

Well worth it.

 

Ed

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Posted by Ulrich on Wednesday, March 11, 2015 8:59 PM

trackrat888

There is some concern over control by foreign investors over critical domestic infrasrtucture. Childrens Investment Trust was a british/brazialin outfit who had some control over CSX. Then we had the Germans trying to buy out the Pennsy Turnpike and then the French running MBTA.

 

 

Relax, the Germans and the French have nothing on the Chinese..

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Posted by Ulrich on Wednesday, March 11, 2015 8:40 PM

That's Dickens, not Shakespeare..don't confuse the monkeys..

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Posted by zugmann on Wednesday, March 11, 2015 7:10 PM

jeffhergert
Aw Paul, you gave away my strategy. I guess now I'll just give the monkeys typewriters and have them work on Shakespeare.

 

"It was the best of times, it was the blurst of times"

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any

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