In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
Impressively, Stockrow estimates the Kansas City’s Southern’s revenues grew by 6.97% during 3rd Quarter 2019. In contrast, a KSU press release places the revenue growth rate based on freight volume at 7%. Additionally, the Kansas City Southern estimates its 3rd Quarter revenues at $747.7 million based on freight volume.
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Thus Trump can destroy the Kansas City Southern or damage its operations severely. Plus, Trump could quickly sink the KSU’s stock price because I base the railroad’s value on its cross-border operations.
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The Union Pacific has a pretty bright future because it owns four rail lines that connect the Great Plains to the West Coast.
They include the original transcontinental rail line from Omaha, Nebraska to Oakland, California and the Southern Pacific line from Los Angeles to Houston. Shorter routes include the line from Salt Lake City to Los Angeles, and the Oregon shortcut from Pocatello, Idaho, to Portland, Oregon, and Seattle. Other key routes include a line from El Paso to Chicago, the line from Houston to Chicago, and the line from Denver to Salt Lake City.
These tracks put the Union Pacific in a great position to cash in on all the raw materials shipped from the West and Midwest to Pacific and Gulf Coast Ports. It is also in a good position to haul all the consumer goods shipped from China to U.S. ports.
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Those who doubt that American stocks might be in a potentially catastrophic bubble need to take a look at the Kansas City Southern (NYSE: KSU). The railroad makes little money, yet its stock is dangerously overpriced.
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The potential of this are absolutely staggering. Just a few of the things Uncle Warren can do with all that cash include:
Buy America’s second largest grocer; Kroger (NYSE: KR), outright and still have $75.56 billion left in the bank. That’s amazing because Kroger reported revenues of $118.05 billion on 31 July 2017. Kroger had an enterprise value of $32.74 billion on November 10, 2017.
This exposes the Canadian Pacific’s greatest problem: its resources are simply too limited. The railway barely seems to make enough money to cover the cost of operations, let alone expand or modernize.
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Bill Gates’ most unusual investment; at least from a tech geek’s perspective is the Canadian National Railway (NYSE: CNI). Blomberg
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Amazon (NASDAQ: AMZN) – The Everything Store is basically a logistics company and Hyperloop is a next generation logistics solution. Hyperloop One CEO Rob Lloyd has even described his company’s technology as “Amazon Prime on steroids.” Hyperloop would make Amazon more profitable by greatly reducing transportation costs while speeding up delivery times. A fulfillment center in Ohio would be able to provide same day delivery for merchandise ordered in Chicago or New York by utilizing Hyperloop.
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There is one scary figure in Berkshire’s first quarter results and that’s cash and short-term investments. Why has Uncle Warren stashed $96.46 billion in the bank?
An obvious and frightening reason is that Buffett and crew think the U.S. economy is on shaky economic ground. They think something is about to give in the American economy, and when it does they plan to go shopping.
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The railroad is definitely overpriced at the $89.5 a share it was trading at on April 28, 2017. There’s nothing in the earnings report to justify that number.
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