My comments on the TIE 10-Q are posted on Investor Village, here:
I wouldn't buy rail calls as a longterm hold. Savvy options players (I'm not one) could trade them like any other stock. But the Rails' stocks' (as opposed to the businesses') outlook beyond a few days is very cloudy, with fear of higher interest rates, or a business slowdown, poised to take rail stock prices down in a heartbeat. I'm long the rails since last week (after being out of them for 2-3 months), but I'm ready to sell them all if investors re-focus on the downside to the economy, which always takes the rails' stocks down - - there's no fighting it in the nearterm, and if there is a significant slowdown in business, the rails will stay depressed for some time - - like months, or Quarters - - likely offering cheaper prices for re-entry later on. For the moment, I'm long hoping that fear of business deterioration will moderate, and allow what I believe is excellent fundamental value to gradually drive the prices back up.
The rails' story is compelling (including energy efficiency), but whenever there's chatter about a slowing economy, they always sell down significantly, offering cheaper prices down the road. There's no fighting it short term - - and fear about possible cratering of the rails' profits (based on past experience) leads investors to sell them mercilessly when talk of a business downturn predominates.
Did you venture into any of the long calls with these rails. Or your would stay with strictly the stock. It looks like these ahve both valuation and strategic advantage on their side. Any further price hike on oil will certainly enhance their pricing power further I would imagine. Thanks.
By the way did you care to look at the TIE 10Q today. It is kind of interesting. Please post if you see any thing striking in the story. I still hold few calls there ( which will not change my like significantly either way ).
For some reason I liked the NSC long calls best so far. But might keep adding Jan 07 calls to my portfolio. I wonder how a serious recession plays out on rails if induced by both FED and the oil shock. Is there such a thing as oil shock or do we have enough vents through gas and coal and hybrids and energy efficiencies ?