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.
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).
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).
Aw Paul, you gave away my strategy. I guess now I'll just give the monkeys typewriters and have them work on Shakespeare.
Jeff
A further point: Interest rates on bonds down in the low single digits - in some European countries (Germany), even negative ! - means that there's plenty of money out there (domestic and international) looking for a home with a stable, reliable, return on investment, whatever the form of the ownership of that investment (pension, mutual fund, 401(k), hedge fund, etc.).
The benefits of that includes the railroads, too, which are attractive investments because of their huge fixed and capital asset values, good "franchise" value in the pricing and earning power, mature technology, well-defined property rights in a stable nation, history of steady earnings and increases, very utility-like in providing an essential and practically irreplaceable service, etc.
- Paul North.
While it is true that private sector pension plans are largely a thing of the past, if one considers the larger category of retirement savings plans, I believe there is a larger pool of investable funds out there than ever before. It consists of IRA's, SEPs, 401's and the like I'd be interested if anyone has any statistics regarding the dollar size of the various plans.
Something I've always wondered -- are both tiers of Railroad Retirement essentially "pay as you go" plans, or do they manage a pool of investments? If they are managing a pool, what is the nature of their investments and who is doing the managing?
I'll bring it back on topic. Pensions may be in decline but railroads and other large companies are able to find investment capital elsewhere through direct investing as well as the thousand of mutual funds that include railroads in their portfolios. Moreover, thanks to globalization, there is now more foreign investment than ever before, which is a good thing for us because the more demand for railroads shares, the more valuable they become.
This topic is probably more relevant to railfans than to railroaders. Railroaders have pensions while the rest of us generally have to fend for ourselves. And since we are railfans, investing in what we enjoy makes sense to some of us.
1) BNSF likely has no problem getting the money it needs from Uncle Warren (Buffett) / Berkshire Hathaway.
2) 2 -3 years back, NS was able to sell somthing like $600 Million in 100-year bonds for about 6% annual interest - and there was demand for even more. I read that most of the buyers were life insurance companies with similar long time horizons.
The following is in caps for the usual reason - I'm 'shouting', because I want to make sure this cuts through all the crap and gets heard:
3) MANY PEOPLE - INCLUDING SOME PROFESSIONAL MONEY MANAGERS - HAVE REALIZED THAT 'ACTIVELY' MANAGED FUNDS ARE TOO EXPENSIVE IN FEES COMPARED TO THE ADDITIONAL EARNINGS (IF ANY) THAT THEY GENERATE. 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). AS A RESULT, THE VAST MAJORITY OF SAVVY INVESTORS USE INDEX FUNDS, OF WHICH VANGUARD IS THE PRIME EXAMPLE - EVEN BUFFETT RECOMMENDS IT. WITHIN THE LAST COUPLE MONTHS VANGUARD ACHIEVED SOME MILESTONE BY BEING THE LARGEST SINGLE MUTUAL FUND COMPANY - SOMETHING LIKE $3 TRILLION - AND HAVING MORE MONEY GOING INTO IT THAN ALL OF THE ACTIVELY MANAGED FUNDS COMBINED.
Index funds buy a representative portion of the entire market. If a railroad needs money and chooses to raise it 'publicly", put the shares or bonds out here, and they'll still get bought (or not), depending on their merits. No pension funds or "back room deals" needed. (P.S. - Too many pension funds were naive or undiversified at best - too much money invested in their own company - or corrupt in various ways at worst.)
You can find out more about this by the usual search tools, or books such as "The CoffeeHouse Investor", "A Random Walk Down Wall Street", etc.
Disclosure: After having been ripped-off by several investment firms - Jack Grubman of Smith Barney, Gary Mayo of IDG/ Amex, etc. - almost all of my investments are in Vanguard funds. The only ones that aren't are shares in several of the Class 1 railroads (I was one of those bought out of BNSF by Warren Buffett about 5 years ago), and 1 intermodal company. I believe my portfolio has outperformed the S&P 500 over the last 15 years, and any stock picker ("Invest in what you know", as Warren says).
Murphy Siding Two words: Moon pies.
Two words: Moon pies.
With RC Cola?
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
And while I like the topic, I agree not really relevant to this forum. But it does make one think "what if?"..
Modeling the Cleveland and Pittsburgh during the PennCentral era starting on the Cleveland lakefront and ending in Mingo junction
Thanks to Chris / CopCarSS for my avatar.
There was a topic in there?
23 17 46 11
What does this topic have to do with trains and railroading? It wasn't made clear to me .
The money is still there, it just becomes a different instrument, for example a 401k or a fund.
Dave H. Painted side goes up. My website : wnbranch.com
Not to mention Bre-X and Northern Telecom.
The "elaphants" bought a lot of Enron stock. Bummer.
But the power of Instutional investors over what you can do is like being a kitten with 2,000 lb Elaphants in the room
Well, I've never had a pension and have worked on straight commission for the past 20 years. Like many people I'm saving for my own retirement. Most of my savings are in stocks.. so the companies I invest in get my money for their own use for 20 to 30 years . Lots of people do what I do.. no pension or money manager required.
One of the stocks that I own is Fortress Investment Group. Orginally founded to manage hedge funds it now has grown to manage public and private pension funds. One of the basic foundations of pensions was that employees lacked the displine to save for their retirement and that co-op board of workers and management would save and invest in best instrests of all. A main feture would invest in the company first and related indistries. A auto company would invest pension money in steel mills,railroads,coal mines and other related industry. A public pension fund would invest in what would make the state grow like Ohio would invest in GM and Maine would invest in paper and lumber and California would invest in tech and Slicon valley. I have heard setiments from Fortress board members and management is that they are having trouble finding new money to "play" with as traditional sources of capital are drying up like pension funds. 401ks dont have the power the big pension funds have and mutual funds are at the whim of a single manager. Investment companies have to go overseas for new capital and take risks like dealing with less then savory people who may have the funds frozen by the fires of this world. We have killed the golden goose by ending pension funds and unions who by the way have elected members to INC. publicy traded boards of directors who in the intrest of short term gain and ended and raided pension funds that put them in power to begin with?
Our community is FREE to join. To participate you must either login or register for an account.