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Public Markets Investor, Opportunistic Buying & Cost-Basis Management
North American freight railroads own right-of-ways that would be impossible to recreate today, which makes them permanent holds. California's $126 billion-plus high-speed rail shows the cost: much of its spending goes, directly and indirectly, to securing right-of-way for just a few hundred miles in one state. Recreating that nationwide, especially in dense areas like CSX's East Coast, is impossible. Union Pacific is acquiring Norfolk Southern. x.com x.comÂ
Canadian Pacific Kansas City has a huge moat in long-distance North American freight as the only railroad running one connected line across Canada, the US and Mexico. Competitors must hand off freight at borders, switch carriers and deal with delays, while CPKC runs one network under one operator from north to south. It is a business to buy and hold for many years. x.comÂ
North American railroads are irreplaceable franchises, since land, permits and capital to build new ones don't exist, and a wave of mergers is reshaping the board. Union Pacific is best in class at a 59.6% operating ratio versus Norfolk Southern's 70.3%, a spread that is pure management and the core of their merger thesis. If that deal passes, BNSF's answer is CSX, a $100B-plus deal only Berkshire can fund in cash. Canadian Pacific Kansas City suits long-term compounding. x.com x.com x.com x.comÂ
Union Pacific holds one of six irreplaceable franchises dividing the continent, since nobody will ever build another US railroad: the land, permits and capital don't exist. Its latest results back that up, with operating earnings up 12% on higher fuel surcharges, volume growth, core pricing gains and other revenue, partly offset by business mix. US railroads are breaking out to all-time highs. x.comÂ
CSX could get a boost as high oil prices push logistics from trucks toward trains. x.comÂ
Railroads and energy stocks, a heavy-asset, low-obsolescence trade, work as a barbell to AI bottleneck names and are holding up in the selloff. Devon Energy, ConocoPhillips, Norfolk Southern and Union Pacific showed green in a sea of red. x.comÂ
JEPQ, Canadian Natural Resources, Canadian Pacific Kansas City, Coca-Cola and VICI Properties combine high yield with dividend growth in a simple, diversified income portfolio yielding about 6.17%. JEPQ gives Nasdaq exposure with monthly dividends, Canadian Natural is an energy leader and Canadian Pacific Kansas City a literal railroad monopoly, while Coca-Cola and VICI offer super-predictable cash flows from soda and Las Vegas real estate. x.comÂ
