[quote user=“JPS1”]
The decline in UP’s car loadings is just part of the story. How nimble is the railroad in adjusting it
Lack of personal responsibility in my view on an individual to save or live within their means. Some people need to have this happen to them in order to learn, is also my view. We will become a stronger country and much better educated on saving for the future because of this (happened after the Great Depression). So as hard as it is to watch. Sometimes you just have to stand back and watch (and help out where you can without dragging yourself down with them). I always wonder how Parents raised their kids without teaching the concept of budgeting or saving.
Sorry, had to get my personal feelings in as well. I am all in financially with Union Pacific, more than $100,000 invested with them so far and I hope to grow that amount. They kick arse with the dividend payment and I feel yes they might be going through a slight rough patch now but they have both the innovation and the business marketing skill to bounce back and wow the industry again. Would definitely rate them higher than BNSF and think if Warren had a second chance would pick UP instead of BNSF.
What happens in 17 years? (Not the Rapture?)
Agree with MILW on UP vs. BNSF. The latter is good, all right, but UP better, in my opinion. When BNSF got bought out, I took my money happily and laid it on more UP. We’ve enjoyed a nice 1:1 split since.
I’ve learned to beware of predictions, dire and otherwise. Following the UP/SP meltdown, a couple of railroad “experts” said UP was now so far behind BNSF financially it would never catch up.
They might have been right, if Dick Davidson had remained in charge. After the board finally fell out of love with him, UP took off and has never looked back.
Putting all or even most of your eggs in one basket is a pretty risky strategy, even with a sound investment such as UP.
[quote user=“samfp1943”]
MidlandMike
kgbw49
Low interest rates make it easier for the Federal Government to sell more debt - borrow more - because the payments are lower. On $20 trillion in outstanding Federal debt which is growing by $400-$500 billion annually, if the 10 year Treasury ever returns to historical levels of 5% or so, the annual Federal deficit will balloon by hundreds of billions of dollars more than than it currently is. That is because the new debt will come on at a higher interest rate plus any outstanding debt that is reaching maturity has to be rolled over at a higher rate.
That then will cause an even bigger annual Federal deficit requiring even more annual borrowing, and the downward spiral continues.
So low interest rates support more borrowing by the Federal government.
This is the last comment I will be making on this because I erred in talking about unemployed people with little money to spend being a factor in the tepid economy, which in turn is one reason for a roughly 16% drop in carloads over the last two years. I should have realized that it would quickly turn in to a political discourse, and on this forum I would rather spend my time discussing railroad topics than politics.
So as for this thread, I am out and others can take it where they wish to go.
While the Feds set some interest rates, their T bills/bonds are set by market rates, so I can’t see how your arguement applies. Nevertheless, since you don’t wish to comment any more, I also don’t wish to belabor the point any further.
UP is the lowest risk in the RR industry and is the only transport sector stock I own. Portfolio is well balanced.
I’ll retire. If all goes well. That’s a few years longer than I’d have to stay. Most can’t wait to retire.
I doubt Warren Buffett wishes he had bought UP instead of BNSF. I’ve heard that one of the reasons he didn’t go after UP was because he thought they were top-heavy in management. Supposedly, although I can’t find the quote, he said UP was the biggest mismanaged gold mine in the world. That may have been a few CEOs ago, but I’m not sure much has really changed that would change his mind about buying BNSF.
Jeff
Railroads don’t have a monopoly on that. Too many corporations are top heavy and mismanaged.
Three major ways to make a profit: increase revenue stream, cut costs, leverage debt. In a period of declining coal (and oil) revenue for the UP and BNSF, #2 and 3 can work if interest rates remain low, but only for so long. Finding new, potentially profitable traffic sources (even marginal ones) has to happen to continue to prosper. Otherwise you are stuck with underutilization of assets (track and equipment).
Well unless they build more pipelines in the country. The rail lines can also start hauling LNG to the ports in addition to Baaken Oil, thats one potential new traffic source they have not tackled yet. Also, jury still out on perishables traffic via Chicago and I think a number of Class 1’s are probably in wait and see mode to see how the capacity improvements shave time getting through or around Chicago.
Intermodal is going to continue to grow year over year long-term with our growing economy. I suspect Coal will eventually also make a come back.
Great post, Balt. Where’s that “Like” button?[bow]
Much of the way (Elko to Winnwmucca) there is directional running with the westbounds on the track close to the freeway and the eastbounds waaay off across the valley where you likely wouldn’t see them. With track speed close to freeway speed limit it’s not surprising you wouldn’t see anything.
Winnemucca to Reno Amtrak is on the former SP parallel to the freeway.
Sadly, it applies to too many threads around here.
The posted topic didn’t even last to the end of the first page. [#offtopic]
I followed the lines on trips to/from Californication in 2014 and 2015 and was somewhat disappointed with the number of trains then. No doubt it is slightly worse, now.
According to this site, UP traffic levels for week 26 were higher in four major categories, autos, grain, chemicals and containters, than the same week in 2015
I just returned from a California Zephyr trip and can confirm with this downturn UP is not using the D&RG route through the Rockies. Specifically, from Provo thru Winter Park, we encountered one freight when eastbound, and I don’t believe there was anything when westbound.
Also of interest are the sidings at Grand Junction. Hundreds (perhaps 300) of four axle locomotives are stored there – both SW and road types.
up and bnsf is going to loose more business when those huge container ships go to east ports to unload. but the good news is csx and ns will get more carloads and jobs.
Most containers shipped by rail are domestic…JB Hunt, UPS, etc…that isn’t going away
even domestic cont are way down this year,our economy is doing terrible. may be a recession or depression coming soon.nafta shipped mucho jobs overseas and mexico. no one cares