With UPS coming out this week, they will set the stage for all transports, imo. After the incredible run all these stocks have had, there is only one direction to go....down! UPS is priced to absolute perfection and we all should know what happens as a result. Im long UPS and CHRW and picked up some covered Feb ATM puts to let these stocks come in a little. Thoughts anyone???
I just looked at the DJTA and it is up about 20% since a low on November 16th. Pretty good move in 3 months. A quick look at the 20 components shows that most are in the 15 - 25 % range for the same period with a few higher including two of the airlines up about 40%. In the history of airlines they have lost money. There may be investors that can play them; however, there are too many stocks out there to mess with airlines.
I see that the delivery companies and freight forwarders all have done well as you mentioned above. Usually when these transports do well, it is a sign of a pick up in the economy, which I believe is staring to happen in spite of the clowns we have in government. Lots of money has poured into commodity producers and that is a good sign. Are problems since 1999 have been a direct result of high commodity prices as were the 3 worst periods in the 20th century (1899-1923, 1930-1952 & 1968-1982). All the financial problems then as now are because everyone tries to avoid the slump that commodity prices cause, do reckless things and then make things worst than they would be.
Since the market has been straight up we need a pause. may be this is the start of the next great stock bull market. In the last one stocks went from around 800 in 1982 to 14000 in 2000 or over 17X's The other 2 great bull markets of the 20th century had returns of about 12X. We could be on our way to a Dow of over 100,000. Just keep an eye on commodity prices. Natural gas could be the game changer in transportation and in industry. I am looking out at the big picture and have been investing accordingly. I like CHRW as a long term play.
thanks for your thoughts RG. One thought I have had that brings me pause on this rally is that I believe traders are bringing this market higher, not investors. As a partner in a manufacturing/engineering company, we plowed as many profits as we could into 2012 at the lower tax rate. Many companies are handily beating estimates because of this same event, imo. Companies will also expense as much as they possibly can throughout the year and definitely lower profits, hence reducing earnings for 2013 due to the heavily invasive new tax rates. What will this do to stock prices and how would you prepare for this?