greyhounds wrote:Well, actually as a guy who did railroad pricing before and after dereg, we knew the problem was that we couldn't lower the rates to compete with the trucks and barges, not that we couldn't raise them. The asinie government regulators kept rail rates high and diverted freight off the railroads. See "In the Matter of Container Service" by your Federal Government in 1931
Simply a false history.
Comments by Darius Gaskins, former Chairman, Interstate Commerce Commission, former President, Burlington Northern Railroad:
"On the other hand, the railroad industry was a different situation. The Staggers Act was a revolutionary Act, and it was based on a difference of opinion between the railroads and the shippers. The railroads were convinced that without the straitjacket regulation and without having to make collective rates through rate bureaus and the ability to have confidential contracts, that they were going to return to profitability through higher rates.
"That's what they thought. The shippers were very concerned about that, and they thought the railroads had too much power, and so they were also afraid of higher rates. The railroads said, you can wipe out the ICC, we don't care. The shippers said, no you can't do that, we don't know what's going to happen with this deregulated monster."
Progress on Point, Periodic Commentaries on the Policy Debate, Release 11.22 December 2004, Panel Discussion: Reinventing the FCC for the Digital Age
I believe you are both correct, but neither wants to admit it.
Plenty of situations existed in which the rails could not lower rates. Big John hopper rates is just one that I can think of.
Were shippers concerned with Staggers? Sure, it worked out tho. Productivity gains helped reduce lower rates, which shippers took advantage of. Regulation just fueled a huge situation which benefited labor and not many others.
ed
MP173 wrote: I believe you are both correct, but neither wants to admit it.Plenty of situations existed in which the rails could not lower rates. Big John hopper rates is just one that I can think of.
Well, I will go with Gaskins on that one for two reasons. No. 1: he is credible. No. 2: he reflects accurately the record made at the time in support of passage of the Staggers Act. Nobody was arguing that the railroads "wanted" to cut rates. That is simply false. There is a well-developed record on the matter.
And that's exactly what the railroads wanted. Who testified against the NYC intermodal rates in 1931? The railroads. Who fought Big John? The railroads.
Recall that the entire idea of regulation was the railroads' own bright idea specifically designed to prevent rate reductions. The ICC was set up precisely to knock down innovation, rate cutting, "competitive" nonsense. Railroads wanted rate increases; not the opportunity for rate reductions. They were already losing money -- cutting rates to "compete" with trucks hardly seemed like the way to fix it. When the ICC became an obstacle to raising rates, the industry lost its enthusiasm for regulation, pure and simple.
Limitedclear wrote: futuremodal wrote: Hey, isn't this the guy who gave a sizable charitable donation amounting to billions...........to Bill Friggin' Gates?!Maybe this buying of BNI on the high side is a sign of senility.A senile Warren Buffet is still 3x10,000,000 smarter and wiser than you FM so why not keep the personal attacks to a minimum...And BTW the charitable contribution was to the Gates Foundation, not Bill personally...But then again, precision was never your thing. As I recall Bill Gates is also a major shareholder in the strike ridden CN. Does that make him senile too??? A couple of senile Billionaires, darn...we should all be so challenged...FOFLMAO...LC
futuremodal wrote: Hey, isn't this the guy who gave a sizable charitable donation amounting to billions...........to Bill Friggin' Gates?!Maybe this buying of BNI on the high side is a sign of senility.
Hey, isn't this the guy who gave a sizable charitable donation amounting to billions...........to Bill Friggin' Gates?!
Maybe this buying of BNI on the high side is a sign of senility.
A senile Warren Buffet is still 3x10,000,000 smarter and wiser than you FM so why not keep the personal attacks to a minimum...
And BTW the charitable contribution was to the Gates Foundation, not Bill personally...
But then again, precision was never your thing. As I recall Bill Gates is also a major shareholder in the strike ridden CN. Does that make him senile too??? A couple of senile Billionaires, darn...we should all be so challenged...FOFLMAO...
LC
LC!! Again with the subintellectual "FOFLMAO" and the par-for-the-course personal attack?
Are you ever going to evolve into an actual human being? So much for keeping the personal attacks to a minimum!
Par for the course for this minor league A-hole.....
My turn. My take is that Warren Buffett believes that Global Warming mitigation policies are going to radically change things. Transportation is still going to be needed. Even if PRB coal diminishes, no other mode of transportation has a viable means to transition to alternative fuels as easily as rail. Biofuels are only a means of transition, not a solution. Hydrogen is a Chimera, the only large source of Hydrogen is to extract it from water. This is going to take more energy than it produces, yes you can strip it from Hydrocarbons like Oil and Natural Gas. They are in short supply now, and obtaining Hydrogen from this source does nothing to reduce the liberation of CO2. In case you haven't guessed yet the viable source of power is Electricity and Electrification. Look for it to happen first in the LA Basin. Already BNSF and UP have agreements to eliminate operation of pre- Tier 2 locomotives from the basin. What happens when Tier 3 debuts? What was missing from previous Electrification studies, was the traffic density that many mainlines now have.
MidlandPacific wrote:Well, I don't know whether they were smaller lines - I meant that I thought the purchases were smaller. I'm not an authority on equity trading regulations, but I thought (I hope someone will correct me if I'm wrong) that there's an SEC requirement to report stock purchases if the stake in the company is a certain size. I gather that the purchases of the other two were smaller, proportionally, than the BNSF buy.
This is off the cuff and the top of my head after a couple of years, but there is a regulation that requires you to file some paperwork with the SEC if you get more than 5.0% of a certain class (ostensibly voting) of stock. Also, I think the board and senior management of the company had the right to require you to state your intentions, whether it be control of the company or simply raking in the profits. On the other hand, I may be thinking of the events immediately prior to the triggering of a poison pill; a quick glance at the SEC's forms site didn't show anything that jumped out at me as the one I was thinking of. I could be completely off-base here and will be embarrassed if I am. =P
I agree with you that whatever stake Mr. Buffett & Co. wound up taking in Railroad B must be beneath the reporting threshold and/or smaller than their stake in the Burlington Northern & Santa Fe. (Take that, Matt Rose.)
OK, that's about the first and last thing I understand on this thread other than "Warren Buffett lives in Omaha, Nebraska". You gentlemen continue your discussion of eldritch deities called fi-nan-ce and eco-nom-et-ric.
beaulieu wrote: My turn. My take is that Warren Buffett believes that Global Warming mitigation policies are going to radically change things. Transportation is still going to be needed. Even if PRB coal diminishes, no other mode of transportation has a viable means to transition to alternative fuels as easily as rail. Biofuels are only a means of transition, not a solution. Hydrogen is a Chimera, the only large source of Hydrogen is to extract it from water. This is going to take more energy than it produces, yes you can strip it from Hydrocarbons like Oil and Natural Gas. They are in short supply now, and obtaining Hydrogen from this source does nothing to reduce the liberation of CO2. In case you haven't guessed yet the viable source of power is Electricity and Electrification. Look for it to happen first in the LA Basin. Already BNSF and UP have agreements to eliminate operation of pre- Tier 2 locomotives from the basin. What happens when Tier 3 debuts? What was missing from previous Electrification studies, was the traffic density that many mainlines now have.
Whether Warren thinks this way or not, there is no concievable way for CO2 mitigation policies to have anything but a profoundly negative effect on the railroads. The only viable replacement for coal fired power plants are nuclear plants, and nuclear plants have nothing to offer the railroads in terms of income potential. This whole biofuels movement is a crock as well, there is no physical way for biofuels to amount to more than a mere 5% give or take of the US liquid fuel demand. We are already seeing the economic impact of current ethanol mandates in terms of the effect on food prices, and that is an indication of a natural economic ceiling for such endeavors.
The only possible saving grace for railroads in a CO2 constrained world is if CTL projects blossom, which might result in coal movements of some distance. But it's not the same as need to haul coal for power plants. Most power plants are located closer to the consumer markets, while most fuel plants can be located a world away from the consumer markets. The likelyhood is that most such plants would be mineside, and the output would then move by pipeline rather than rail. Only ethanol must move by rail.
Of course, there's the other prospect regarding CO2 regulation - maybe, just maybe, our elected officials will wake up and smell the fraud of the whole MMGW movement, and alleviate us from any such economically disasterous nonsense. Warren is a certified lefty, so that does indicate a certain degree of mental incompetence. If so, BH will be the next Enron.
futuremodal wrote: beaulieu wrote: My turn. My take is that Warren Buffett believes that Global Warming mitigation policies are going to radically change things. Transportation is still going to be needed. Even if PRB coal diminishes, no other mode of transportation has a viable means to transition to alternative fuels as easily as rail. Biofuels are only a means of transition, not a solution. Hydrogen is a Chimera, the only large source of Hydrogen is to extract it from water. This is going to take more energy than it produces, yes you can strip it from Hydrocarbons like Oil and Natural Gas. They are in short supply now, and obtaining Hydrogen from this source does nothing to reduce the liberation of CO2. In case you haven't guessed yet the viable source of power is Electricity and Electrification. Look for it to happen first in the LA Basin. Already BNSF and UP have agreements to eliminate operation of pre- Tier 2 locomotives from the basin. What happens when Tier 3 debuts? What was missing from previous Electrification studies, was the traffic density that many mainlines now have.Whether Warren thinks this way or not, there is no concievable way for CO2 mitigation policies to have anything but a profoundly negative effect on the railroads. The only viable replacement for coal fired power plants are nuclear plants, and nuclear plants have nothing to offer the railroads in terms of income potential. This whole biofuels movement is a crock as well, there is no physical way for biofuels to amount to more than a mere 5% give or take of the US liquid fuel demand. We are already seeing the economic impact of current ethanol mandates in terms of the effect on food prices, and that is an indication of a natural economic ceiling for such endeavors.The only possible saving grace for railroads in a CO2 constrained world is if CTL projects blossom, which might result in coal movements of some distance. But it's not the same as need to haul coal for power plants. Most power plants are located closer to the consumer markets, while most fuel plants can be located a world away from the consumer markets. The likelyhood is that most such plants would be mineside, and the output would then move by pipeline rather than rail. Only ethanol must move by rail.Of course, there's the other prospect regarding CO2 regulation - maybe, just maybe, our elected officials will wake up and smell the fraud of the whole MMGW movement, and alleviate us from any such economically disasterous nonsense. Warren is a certified lefty, so that does indicate a certain degree of mental incompetence. If so, BH will be the next Enron.
CTL does nothing for Carbon Emissions. If the Government goes with a Cap and Trade scheme, the railroads being a large carbon emitting entity versus several thousand small trucking companies, would be well placed to create a revenue stream by electrifying and then selling the unneeded carbon emissions to pay down the debt incurred. With any CO2 mitigation scheme, the most efficient fuel user will be affected the least, across land, that is the railroads. Transportation ranks right up there with power generation as a source of Carbon Emissions.
beaulieu wrote: futuremodal wrote: beaulieu wrote: My turn. My take is that Warren Buffett believes that Global Warming mitigation policies are going to radically change things. Transportation is still going to be needed. Even if PRB coal diminishes, no other mode of transportation has a viable means to transition to alternative fuels as easily as rail. Biofuels are only a means of transition, not a solution. Hydrogen is a Chimera, the only large source of Hydrogen is to extract it from water. This is going to take more energy than it produces, yes you can strip it from Hydrocarbons like Oil and Natural Gas. They are in short supply now, and obtaining Hydrogen from this source does nothing to reduce the liberation of CO2. In case you haven't guessed yet the viable source of power is Electricity and Electrification. Look for it to happen first in the LA Basin. Already BNSF and UP have agreements to eliminate operation of pre- Tier 2 locomotives from the basin. What happens when Tier 3 debuts? What was missing from previous Electrification studies, was the traffic density that many mainlines now have.Whether Warren thinks this way or not, there is no concievable way for CO2 mitigation policies to have anything but a profoundly negative effect on the railroads. The only viable replacement for coal fired power plants are nuclear plants, and nuclear plants have nothing to offer the railroads in terms of income potential. This whole biofuels movement is a crock as well, there is no physical way for biofuels to amount to more than a mere 5% give or take of the US liquid fuel demand. We are already seeing the economic impact of current ethanol mandates in terms of the effect on food prices, and that is an indication of a natural economic ceiling for such endeavors.The only possible saving grace for railroads in a CO2 constrained world is if CTL projects blossom, which might result in coal movements of some distance. But it's not the same as need to haul coal for power plants. Most power plants are located closer to the consumer markets, while most fuel plants can be located a world away from the consumer markets. The likelyhood is that most such plants would be mineside, and the output would then move by pipeline rather than rail. Only ethanol must move by rail.Of course, there's the other prospect regarding CO2 regulation - maybe, just maybe, our elected officials will wake up and smell the fraud of the whole MMGW movement, and alleviate us from any such economically disasterous nonsense. Warren is a certified lefty, so that does indicate a certain degree of mental incompetence. If so, BH will be the next Enron. CTL does nothing for Carbon Emissions. If the Government goes with a Cap and Trade scheme, the railroads being a large carbon emitting entity versus several thousand small trucking companies, would be well placed to create a revenue stream by electrifying and then selling the unneeded carbon emissions to pay down the debt incurred. With any CO2 mitigation scheme, the most efficient fuel user will be affected the least, across land, that is the railroads. Transportation ranks right up there with power generation as a source of Carbon Emissions.
What CTL does is to transfer the burden of CO2 management from easy-to-regulate point sources to not-so-easy-to-regulate non-point sources, e.g. from one smokestack to a multitude of tailpipes. In a power plant, all the carbon is combusted and sent up the smokestack. In a CTL plant, most of the carbon is converted to liquid form, thus not a major source of CO2 until it is combusted in the vehicles.
One cannot sequester CO2 in vehicles. You can only try to make your vehicle more efficient in it's use of fuel.
And despite the pollyanna-ish outlook that a CO2 tax will cause a transfer of modal choice from trucks and autos to trains, the reality is that people will continue to drive their own cars despite the added costs, and it still takes trucks to get the goods from dock to dock. Remember? US railroads have all but stopped serving retail outlets. Do you really concieve of a future where railroads go back to the days of mostly carload consists? For that matter, do you really expect a capacity constrained industry to forgo the import intermodal in deference to more TOFC?
More than likely, a demand for greater trucking efficiency will lead to more liberal GVW allowances.
And of course, the most spectorial outlook for railroads from CO2 regulation is a reduction in coal hauling as the Eco Gestapo forces coal fired power plants to shut down. And what coal is produced for CTL will come from more readily available local sources currently out of vogue due to sulfer content. Gasification eliminates sulfer concerns, so there'd be less PRB coal and more Illinois coal used for these plants.
Coal is currently the lifeblood of the rail industry, accouting for 40% of the business and much of the higher R/VC ratio's. Thus there is an inherent contradiction for an investor to both desire greater CO2 regulation and put much of his egg collection in the railroad basket. The two ends do not mesh.
After all is said and done, Buffett's BNI involvement is more likely to mirror his Coca Cola experience than his insurance successes.
Does anybody know how many main line transcontinental tracks would be required to carry today's transontinental gross tonnage at 9 trains per day per line?
How about out of the Powder River Basin?
Thanks
Anthony V.
futuremodal wrote:What CTL does is to transfer the burden of CO2 management from easy-to-regulate point sources to not-so-easy-to-regulate non-point sources, e.g. from one smokestack to a multitude of tailpipes. In a power plant, all the carbon is combusted and sent up the smokestack. In a CTL plant, most of the carbon is converted to liquid form, thus not a major source of CO2 until it is combusted in the vehicles. One cannot sequester CO2 in vehicles. You can only try to make your vehicle more efficient in it's use of fuel.
Aha a glimmer of light, you are correct it will drive more fuel efficiency. Let me ask you this how do you think that the Feds and States collect their Gas Tax? Not at the pumps for sure, that's too hard, they collect it at the refinery or pipeline terminal. It would be similar with a Carbon Tax, it doesn't matter whether the fuel came from Oil or Coal.
I don't expect much more passenger traffic on the rails in say the next 20 years. Some, but not large amounts. If you believe that coal will disappear from the rails then there will be additional capacity on the rails for other items, mostly containers, TOFC is Carbon inefficient too much tare.
That doesn't help much, more tires on the ground add to friction, it improves the tons per driver ratio, but that won't be the biggest concern. Lowering speeds will help, whether that happens depends on exactly what the speed premium is in dollars. When the speed premium gets too high the shippers will mitigate by other means.
Actually if Europe is an example the big power companies will close a few of the least efficient plants and then buy credits, passing the cost on to their customers.
Coal is currently the lifeblood of the rail industry, accouting for 40% of the business and much of the higher R/VC ratio's. Thus there is an inherent contradiction for an investor to both desire greater CO2 regulation and put much of his egg collection in the railroad basket. The two ends do not mesh.After all is said and done, Buffett's BNI involvement is more likely to mirror his Coca Cola experience than his insurance successes.
There you go again, here are the correct percentages to the nearest whole percent based on 2006 Revenues.
BNSF 20%
UP 20%
NS 25%
CSX 25%
Interesting that the Eastern Roads are more dependant on coal the the Western Roads. I don't think the Ag or Chemical shippers or UPS, share your view that coal is the most profitable for the rails.
AnthonyV wrote:Does anybody know how many main line transcontinental tracks would be required to carry today's transontinental gross tonnage at 9 trains per day per line?How about out of the Powder River Basin?ThanksAnthony V.
Anthony, 9 trains per day would be quite low, Currently you could say there are 9 tracks across the Rockies. When the UP completes their doubletracking of the Sunset Route there will be 10. In the PRB it varies, the busiest section south of Nacco Jct. is mostly triple tracked and sees about 80 trains per day, they are working on some 4th main track in this area. Slow speeds limit capacity here. BNSF and UP can push up to 80 trains per day across a 2 main track layout if you don't need many overtakes. i.e. all trains move at about the same speed.
Beaulieu:
Two pages ago, Michael discussed the optimum throughput as follows:
"The area of maximum profitability on the cost curve for a single track mainline is between 7 and 16 trains. Then costs start to go up and profitability declines.
As we discussed earlier on the thread, once past that optimum, profit still increases, but marginal costs increase still faster and that is why profitability declines.
Naturally, there happened to be a good statistical reason why the PCE was very profitable at 9 trains per day compared to its busier peers. "
These comments got me curious about actual traffic levels in tems of tonnange and number of trains on the main lines and how this compares to optimum levels discussed by Michael above.
How do actual traffic levels on the BNSF (or other western roads) main lines compare to optimum of 7 to 16 trains per day per track?
P.S. I haven't got the hang of the quote feature yet.
I have read several comments on this thread about Warren Buffett and Coca Cola and wish to expand that discussion just a bit, hopefully without getting off track of the railroad investment.
It has been stated there was a problem with Buffett and Coke, and I am not exactly sure what that problem was (is).
In checking several sources the last hour, I came up with the following:
BH began purchasing KO (Coca Cola) in the summer of 1988. The price at that time was in the $5 per share range. Eventually BH purchased 200,000,000 shares of KO for $1.023 billion or an average of $5.12 per share. Today that stock is at $49.88 and the market value of those shares is $9.976 billion, or an increase of over 900% which works out to a compounded return above 13% per year (isnt compound interest an incredible thing?). That does not include the dividend returns.
For example today's KO dividend is $1.24 per share or $248million. On BH's initial investment the dividend yield is 24% per year. Not bad, not bad at all.
Something happened to KO in 1998/1999. I dont know what it was as I owned no KO at that time. Earnings per share were $1.64 in 1997, falling to $1.42 in 98, $.98 in 99, and .88 in 00 before jumping back to $1.60 in 01. The stock price was around $90 in 1998 before dropping to the high $30's a couple of years ago and now is near $50.
What happened? I dont know nor can I find it.
However, what remains clear is BH's investment in KO has been sterling. By any definition it has to be considered a success. He identified a company which he felt was undervalued and he placed a large investment in that company.
Michael has several times wondered if BNSF is such a great investment at $80, why not at $60 or $40? Here are a few of the reasons Buffett made his KO investment in 1988 rather than earlier, even tho the stock was moving upward:
1. He was attracted by the management changes implemented by Robert Goizaeta.
2. Goizaeta implemented an attitude of initiating action rather than reacting to market conditions.
3. KO's profit margins increased from 12.9% in 1980 to 19% by 1988.
4. The ROE had reached 31%
He actually resisted purchasing KO earlier, thinking it was overvalued, but the continued success of Goizaeta changed his mind on the valuation.
Today KO is seeing improved operating and growth results. The company is extremely profitable.
In looking at the four reasons above that Buffett did not purchase KO earlier, one can insert BNSF's current situation in each of those items:
1. Matt Rose has managed BNSF very well. Rob Krebs before him laid a strong foundation.
2. Krebs and Rose have "initiated" rather than "reacted" to the Transcon expansion. Compare BNSF's situation with that of UP's Sunset Route, as they are years away from completion.
3. Profit margins have been increasing...earnings before taxes have increased from 11% to 20% over the past three years.
4. ROE has improved from 8.5% to 18% over the same period.
Will BNSF become as successful as KO? Tune in. It is so easy to peer thru the rear view mirror when discussing successes (and failures) of investing. Coca Cola has been a huge success for BH. The initial investment throws off 1/4 BILLION dollars a year to BH ($250,000,000).
Ed, you misread my comments on Coca Cola. The investment reference was in comparison to Pepsico.
I did not say Coca Cola did poorly or that there was a "problem" at Coke, although he did leave the board and Coca Cola did poorly by comparison to Pepsico over the time period that Buffett was on the Coca Cola board. "Poorly by comparison" is not the same thing as saying "poorly."
I did not say he did not make money on Coca Cola. I do not know where your read that.
Ed, this is cheerleading. Most Fortune 500 companies are far more profitable now than (take your pick) 5, 10, 15 years ago.
Including railroads.
Michael:I am not going to go back and read every post made on this thread, but I did "feel" that some of your comments regarding Coke were not completely supportive of BH/KO investment. Has Pepsi outperfomed KO lately? Probably...I havent checked Pepsi's financials as I already own KO and will not invest in both. Perhaps I should check both out and make sure I am in the right investment.
I seriously dont know what happened to KO back in the late 90's. You did make mention in one of your posts that Buffett left the board. You might want to go back and read your comments on that, as I interprated your statement to be there were problems while he was on duty.
Dave made a comment this evening comparing Buffett's experience with KO and with insurance and I took that as being slightly negetive towards the KO investment, so I checked things out.
As it has turned out, the investment has been good, very good. As I previously stated, the dividend yield on original investment is over 24%. Granted the stock tanked, but one could say that a PE ratio in the 50's usually results in a correction. Expectations usually cannot continue to be met and in this case, it occured. One could say now with a forward PE of 20, 2.5% dividend yield, 21% margins, and ROE of 30% that KO is an interesting equity. Growth is slow, but steady for a mature company, but it prints cash.
You mentioned earlier the amount of cash BH has held...could you comment on your thoughts behind those numbers, if any...or are those just factual numbers. Buffett has indicated that he doesnt necessarily like to hold cash, but will not invest simply to be fully invested. I do know that he has commented on the difficulty in finding worthwhile investments.
BH will be facing a cash problem, if not already. What to do with their cash...as the company becomes larger and throws off more and more cash thru the insurance float and the operations results, what will they do with the cash? As you know, BH has not issued a dividend since Buffett has been CEO. Lately he has turned overseas to invest. I dont know if he has invested in Asia, but as I mentioned earlier, this might be a play on both energy and Asia.
Dont get too ruffled about anything I write here...there is no agenda and you will know when I disagree, but it will not be in the form of name calling.
Cheerleading?
I dont understand that statement at all. Just stating the data, as you like to request.
Anthony:Dont feel too bad, I havent figured out the quote thing either. Perhaps someone could explain it to me again.
AnthonyV wrote:Beaulieu:Two pages ago, Michael discussed the optimum throughput as follows:"The area of maximum profitability on the cost curve for a single track mainline is between 7 and 16 trains. Then costs start to go up and profitability declines.As we discussed earlier on the thread, once past that optimum, profit still increases, but marginal costs increase still faster and that is why profitability declines.Naturally, there happened to be a good statistical reason why the PCE was very profitable at 9 trains per day compared to its busier peers. "These comments got me curious about actual traffic levels in tems of tonnange and number of trains on the main lines and how this compares to optimum levels discussed by Michael above.How do actual traffic levels on the BNSF (or other western roads) main lines compare to optimum of 7 to 16 trains per day per track?ThanksAnthony V.P.S. I haven't got the hang of the quote feature yet.
All of the mainlines, are above that figure in places, The UP through Wyoming is all doubletrack. The BNSF transcon is very close to being all doubletrack, just two short bottlenecks. Michael's 16 trains per day is a simplified figure, based on directional balance. It assumes fairly long running times between sidings and short sidings. Don't forget that if you have even spacing and no need for overtakes each traincrew will only make 4 meets, during their time. Doubletrack changes things quite a bit.
John Beaulieu
AnthonyV wrote: P.S. I haven't got the hang of the quote feature yet.
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding wrote: AnthonyV wrote: P.S. I haven't got the hang of the quote feature yet.Anthony: To quote someone, go to the thread you want to quote. Push the "quote" button at the upper right. This will jump you to a different screen, where the other person's post is written. Scroll down to the bottom, past the word "quote", and write your comment. When you're done, hit "post". There is a test forum available. That's where I had to practice about a hundred times, in order to get the hang of it. That was in addition to a half dozen helpful people trying to coach me. Some posters can do multiple quotations from a single post. I'm not that smart.
Like this?
omg...it worked!
beaulieu wrote: Michael's 16 trains per day is a simplified figure, based on directional balance. It assumes fairly long running times between sidings and short sidings.
A sensitivity analysis on the effect of the number of sidings in a 120 mile division (which directly affects the running time between sidings), comparing distances between sidings for 12 miles, 10, 8, 5, and 4 miles shows little change to economic optimums, but there is a substantial correlation to capacity, as one might guess. The sidings exceed the maximum train length in all cases, so the model is a bit on the optimistic side.
MP173 wrote: Murphy Siding wrote: AnthonyV wrote: P.S. I haven't got the hang of the quote feature yet.Anthony: To quote someone, go to the thread you want to quote. Push the "quote" button at the upper right. This will jump you to a different screen, where the other person's post is written. Scroll down to the bottom, past the word "quote", and write your comment. When you're done, hit "post". There is a test forum available. That's where I had to practice about a hundred times, in order to get the hang of it. That was in addition to a half dozen helpful people trying to coach me. Some posters can do multiple quotations from a single post. I'm not that smart.Like this?omg...it worked! ed
MichaelSol wrote: beaulieu wrote: Michael's 16 trains per day is a simplified figure, based on directional balance. It assumes fairly long running times between sidings and short sidings. A sensitivity analysis on the effect of the number of sidings in a 120 mile division (which directly affects the running time between sidings), comparing distances between sidings for 12 miles, 10, 8, 5, and 4 miles shows little change to economic optimums, but there is a substantial correlation to capacity, as one might guess. The sidings exceed the maximum train length in all cases, so the model is a bit on the optimistic side.
I was thinking in comparision to the way that the CP(Soo) now has the former MILW between St. Paul, MN and Portage, WI. 2.5 to 3 mile long sidings, separated by 10-12 mile long single-track sections, trains between 6,000 and 9,000 ft. long. Train speed of 50 for regular freights, 60 mph for IMs, 70 to 79 for Amtrak, subject to curves etc.
MP173 wrote: I seriously dont know what happened to KO back in the late 90's. You did make mention in one of your posts that Buffett left the board. ... Granted the stock tanked ...
I seriously dont know what happened to KO back in the late 90's. You did make mention in one of your posts that Buffett left the board. ... Granted the stock tanked ...
The Coke Pepsi battle is currently all the rage in business schools as a case study; How did Pepsi win? Buffet left the Board as Coke fell behind Pepsi, for the first time in history. Why? I don't know. But, Coke was touted by Buffett himself as a buy he was particularly proud of -- to the extent of going on the board. Maybe he got bored.
The question it raised for me is not whether Coke "did good," but that selection of companies for value necessarily compares each company with other companies in the same market, presumably with the idea of selecting the "best" company.
It took Pepsi 20 years, but it did it. It did a better job than Coke. Coke was punished in the stock market, yes. The stock market reflects value appreciation, or depreciation as the case may be.
That doesn't mean it didn't make money; it means that there was a better choice, or Pepsico did something better. And Buffett was in the management at the other place.
In that particular instance, a blind follower of Buffett would have done OK (and how many companies did OK over the last 15 years? Tons), or even very well, if the results are not compared with other leaders in that industry. But that's not really the measure of astute investing, is it?
And the point was simply cautionary. To assume every move is brilliant, and to thereupon ascribe each reader's pet favorite company strength to Buffett's decision making process, may not always overestimate Buffett, but it can in fact overestimate the company involved because, in essence, he is attempting to predict the future, and he would be the last to claim infallability.
You mention above that it's so easy to use hindsight. Buffett uses past performance to try and predict the future and he is one of the most rigorous analysts of past performance.
I don't think analysis of past performance is easy, but I do believe that measured hindsight is crucial to the outcome of the investing process.
beaulieu wrote: MichaelSol wrote: beaulieu wrote: Michael's 16 trains per day is a simplified figure, based on directional balance. It assumes fairly long running times between sidings and short sidings. A sensitivity analysis on the effect of the number of sidings in a 120 mile division (which directly affects the running time between sidings), comparing distances between sidings for 12 miles, 10, 8, 5, and 4 miles shows little change to economic optimums, but there is a substantial correlation to capacity, as one might guess. The sidings exceed the maximum train length in all cases, so the model is a bit on the optimistic side.I was thinking in comparision to the way that the CP(Soo) now has the former MILW between St. Paul, MN and Portage, WI. 2.5 to 3 mile long sidings, separated by 10-12 mile long single-track sections, trains between 6,000 and 9,000 ft. long. Train speed of 50 for regular freights, 60 mph for IMs, 70 to 79 for Amtrak, subject to curves etc.
These would be pretty standard for modeling purposes; the speed limits can't be used, as the models incorporate average running speed between sidings. The standard models are pretty close to the truth for something like you describe, since the parameters are reasonably uniform and can be entered without modification. The usual process is to go out with the stopwatch and sample the trains, train size, etc., and come back in with the average time spent on sidings, how long it takes to get out, average speed to the next siding used, etc. and fit those into a specific model built from the specific track profile.
"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics
jeaton wrote:I assume that the model is attempting to forecast the effect of changes in volume of traffic to unit cost. Do you have specific studies that compared the forecast to actual results?
Personally, I've got some CN studies that look at that, but the basic model is taken from Ernest Poole, probably the single most authoritative source on railroad cost analysis, and he in turn does cite studies. As I recall, he was director of Transportation Research at Southern Pacific. His book, "Railroad Cost Analysis," remains useful to this day.
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