I’ve noticed that in the past two weeks’ continuing stock-market crash, stock in CP seems to be “crashing” rather more vigorously than that of the other publicly-held RR co’s. What do you think has happened? I mean, have things been happening recently that one could reasonably expect to have an adverse effect on share price?
Is this what is called “sector allocation” and now people are withdrawing from the railroad group?
Or is the CP decline mostly a matter of “herd mentality,” in which case the lesser-known corporations’ (KCS, CP) share prices decline because of a shift to higher-quality stocks–brought on by fear of more losses?
I admit to an ulterior motive; I own a little stock in both CP and NS (stock-ticker NSC), and their share prices declined more than two percent in value today (11-07-07). All the major RR’s prices declined, but none so much as NS and CP.
You can be as subjective or psychological as you wish. The market moves by rational analysis as well as emotion: fear of loss and the euphoria of a boom. All market forces can be observed simultaneously, but just as obvious is that for whatever reason there were tons of stock declines (a drop of 360 pts. = ca. nearly three percent of value overall).
All answers welcome, Canadian responses especially prized.
PS: I am not using this post for investment advice, but staying well-informed is part of the game. - a. s.
If you invest you’re best off to follow Warren Buffett’s advice. Investigate your purchase…buy and then hold. I purposely do NOT look at my investments every day…doing so would drive me nuts. I’m holding on to my CP shares for another 30 years…same with my CN.
The STB announcement that the CP buying the DM&E/IC&E will be considered a significant transaction and that this will delay the closing on the acquisition by at least two months. That’s what happened.
Canada is a commodity/raw material jaggernaut. The world is lining up to by its raw material and these products get to the ports by rail. I own a lot of CP and CN stock and it will probably be the last stock I will liquidate in my old age. I also read that Bill Gates is the largest shareholder in CN. Every stock hits bumps in the road for any number of reasons. For any long term hold you can’t beat CP/CN.
I have never been in the stock market, but I will hazard a guess:
The vice of the Bank of Canada spoke in the USA a day or two ago and expressed reservations about the longevity of Canada’s currently robust economy since our industry is having difficulty staying attractive to its major trading partner…the dollar disparity is problematic.
Secondly, many folks are dumping stock in industry, finance, and technology/medicine and going over to gold which is rising all the time…with oil, of course.
Following the Labor day weekend, CP anounced they were buying DME/ICE. Some feel they are paying too much, but it certainly ends the chance of a takeover, causing speculators to dump the stock.
And this week, as John says, the STB decision slows down the deal, and makes it more costly.
If you investigate a company and it is a company you strongly believe in, then use the dips to purchase. You will essentially be purchasing the stock at a discount. It is amazing that people will bid a stock up, buying it as it continues to rise (momentum), but shun the stock, often selling when it falls for no apparent reason.