OT - Major Railroads Tanking in Stock Marketgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I have bookmarked on CBSMarketwatch the Highs/Lows. For yesterday there were 12 new highs on the NYSE and 141 new lows. On the list of new lows were two major railroads so I decided to do search on the railroads. Four mega huge railroad companies and Canadas National Railway are ailing in the stock market. Their performance over the last three months is as follows:
NSC Norfolk Southern Corporati... -29.41% CSX CSX Corporation -28.75% UNP Union Pacific Corporation -27.13% BNI Burlington Northern Santa... -23.92% CNI Canadian Natl Ry Co -19.88%
Now if Microsoft had lost 29.41% over the past three months it would be front page news and it'd drag the rest of the market down with it.
My question to you, the reader is why? Because the price of diesel has risen dramatically? If so then the trucking industries should be equally hammered (so I need to do a search on that) but generally they just past the cost on to the customer. These four railroads constitute a major portion of our rail freight transportation. So, how could their stocks have been so dramatically affected in the last three months and all in unison?
Can anybody add any pieces to this puzzle. What's ailing the major railroads?
-- Guy Daley (email@example.com), January 29, 2000
CSX News: http://biz.yahoo.com/prnews/000127/va_csx_cor_1.html NSC News: http://biz.yahoo.com/prnews/000126/va_norfolk_1.html UNP: http://biz.yahoo.com/prnews/000120/ne_union_p_1.html
For others see quote.yahoo.com
-- slza (firstname.lastname@example.org), January 29, 2000.
3 of the 4 have just recently eaten a piece of another railway. At least 2 have just finished mergers in additioin to the break-up merger. NONE of them are maintaining service levels equal to pre- break up.
None of themare pevorming in the field at the level they need to.
-- Chuck, a night driver (email@example.com), January 29, 2000.
Can you give me a link or a URL for the High/Lows over at Marketwatch?
-- Zguy (firstname.lastname@example.org), January 29, 2000.
Zguy, here's the link:
-- Guy Daley (email@example.com), January 29, 2000.
It is also possible that shipping patterns are changing...but I doubt this. (One railroad was complaining that coal shipments were down!)
More likely, the railroads aren't considered high tech, and suffer accordingly. They should be solid long term investments for a small portion of your portfolio. They should still be around in some form 50 years from now...
-- Mad Monk (firstname.lastname@example.org), January 30, 2000.
The big thing is, watch them tank along with the airlines as fuel prices keep going up. Railroads are IMMENSE users of diesel fuel. Some locomotives use up to five hundred gallons per hour at full load.
Figure only twelve hours per day of full-throttle use and you get astounding amounts of fuel, (500x12) 6,000 per day for each locomotive. With an average of three thousand locomotives railroad (6,000x3,000), that's 18 million gallons of diesel per day for each major railroad.
With prices approaching one and a half bucks per gallon (railroad diesel fuel is untaxed) that's Twenty-Seven Million Dollars Per Day in fuel costs. I'll bet the corporations budgeted less than one third of that. The companies will have to eat the difference out of their profits and dividends until shipping rates catch up with costs.
Any wonder why investors who only look at the next quarter's numbers are getting out of railroad stocks?
-- Wildweasel (email@example.com), January 30, 2000.