Here's my frame of reference.
Did TRN run a clean and honest business and is now facing an unfair investigation that is essentially a witch hunt?
Or did TRN not run a clean and honest business and is now facing a deserved investigation?
I think the odds are higher for the former rather than the latter. Especially given the heavy scrutiny.
I'm glad my threshold wasn't tested. I'd really hate to sell. TRN is really a great company. Rail transport is an important industry, providing a serious barrier to entry...a decent moat if there ever was one.
But this episode shows how outlier events can distort and potentially ruin any company.
I've no rational answer than to say: I just don't know what is going on.
This simply sucks.
I'm averaged at $16 or so. I really want to hold. But I need to preserve capital...and I fear the irrationality of both the herd and the government.
This has really turned out unfortunately so far. I still feel nothing egregious has been committed, but sentiment apparently might keep driving the price down. We need clarity on the DOJ investigation.
Seeking Alpha is excellent. It can give you vital information. Emphasis on the word "can".
Like with everything in life, you ultimately make the final decision. Especially investing. Hence, if you can't verify, then don't trust what you read. In a financial context, this means sticking with index investing if you can't properly read and analyze financial data and articles, never mind fundamental stock analysis.
As for Seeking Alpha, its greatest value to me is in the comments. There are enough quality posters to quickly vet out fools or those with an agenda. The posters also tend to produce extra information.
The cited article is a good one. With the comments, it indeed identifies TRN as deep value. Unfortunately, nothing can clear the air about alleged government legal action...as things remain nebulous.
I'm holding my TRN stock. I think the odds are in my favor. But there are odds TRN might have committed fraud, really unlikely...or that the government might engage in some corruption, which is my chief fear.
You are issuing platitudes, arguing for the sake of arguing.
True believers? Sure, I experienced massive group think when I correctly pulled out of GTAT. A lot of folks went down with that ship. I based my thinking on objective facts and analysis, as opposed to wishful thinking...as I'm doing with TRN, which I posted in other threads.
You should try a similar approach.
I don't want to be harsh. But you really come off as ignorant in ignoring many posts explaining the situation. Never mind invoking the old true believer canard.
We all agree that there is a legal threat. But most of us also agree that it seems like a witch hunt at this point. Especially considering the tests conducted by the FHWA. Especially considering that the legal defense team of Harmon are major campaign contributors to Blumenthal.
If there is corruption, odds are actually that it's Harmon, his defense team, and Blumenthal. Yes, there are minor odds that there really was an egregious bribe against TRN...but as we're discussing, the known facts don't seem to make this likely.
Well, as we're all seeing, these things take a life of their own.
It was the same thing when Prescient Point called CBI earnings "smoke and mirrors". With a short position. The price plunged.
It was further exacerbated by a timely oil price decline. The swing went from $80 - $32 - $50. The power of sentiment.
I fully confident with CBI. There are no legal issues. Value investing still trumps manipulation in the longer run.
But here with TRN, we unfortunately have to contend with legal manipulation...assuming it's true. I'm still holding, but as I keep posting, there is some greater risk now, even if I believe TRN is innocent. So far.
I'm playing the odds based on a positive guess. I'm guessing there were no bribes. I'm guessing the tests are valid. I'm guessing that corruption won't manifest itself from the DOJ...the latter being for me the chief danger.
I agree. But there has to be due cause in order to commence with such an investigation. It shouldn't be done just because one didn't get the result one wanted with previous accusations.
TRN was exonerated in independent testing. Which was ratified by government agencies. They were essentially cleared.
But somebody seems to be on a never ending fishing expedition to make what they want to believe is true a self fulfilling prophesy. It's obvious to me at this point who is corrupt here. As I posted before, we live in a great country overall...but rule of law is increasingly being challenged.
I'll eat my words and apologize if I am egregiously wrong. I just can't see it right now. The facts and analysis seem to exonerate TRN.
Lastly, I studied up on Blumenthal. I don't want to cast aspersion. But he's been accused of misrepresenting his military history to have served in Vietnam...as opposed to having served stateside in a reserve unit.
I'm a former US Army officer. I served in a time when there was relative peace. I would never compare myself to those who served in sustained combat. You just don't do such things...but Blumenthal does.
I remain a hold. I have to trust the FHWA. And what I know about physics and the tests, not that this is decisive.
But I acknowledge that strong a country as we have, corruption sometimes wins. It's all a matter of degree. As I've posted in the past, there is always the possibility of an outlier decision against TRN here...against logic, against fairness, against the spirit of the law.
I've learned humanity has a considerable amount of dregs, sorry to be so harsh. There are always people and organizations trying to get something for nothing. Even in situations where the highest integrity should be demanded, in this case, our system of litigation.
I'll say one thing for sure: I hope I never have to be judged by a jury of "my peers". A lot of peers are mean, jealous, vindictive...and not insignificantly driven by ideology. Imagine a group of citizens asked to pass verdict on a corporate interest of the so called 1%.
Yeah, I know this is partly a diatribe. But also an acknowledgement that there is risk in TRN. Nevertheless, like I said, I'm holding...and once again crossing my fingers.
1 clarification: I haven't bought anything recently in energy, even though I believe we've hit a bottom. I already am significantly invested at value and likewise exposed.
Like I said, I'm now thinking hard about CAT. I still think INTC is a good tech buy, but I own a lot already...and it's spiked the past few days.
I'm in what I consider to be attractive valuation quality stocks. I really can't find much compelling other than what we discussed. But I'm also open for tips.
Your sense of timing is fortuitous. You're going to do extremely well with both CBI and RDS-B.
I think we've now hit a near oil bottom. I haven't bought anything. But as I said earlier, most of my energy based selections are doing well or will do so in due time...as valuations will normalize.
I'm now eying CAT. I might start a position, having correctly sold last year for a 20% gain. It clearly is undervalued. But I haven't assessed if it has further to go, as commodity cycles are hard to read in this context...given that CAT mines virtually everything.
Still, with energy relatively lower, why wouldn't countries like China and India naturally take advantage and continue infrastructure roll out. Something also tells me the US will boost infrastructure investment as well...both as a business multiplier and jobs catalyst...although that might be attributing too much intelligence to a nice, but often incompetent government here.
Low oil does several things. It fights inflation. And oil bonds are in greater jeopardy due to diminished earnings. Ironically, international buyers still want US fixed income instruments. Throw on top of this a strong dollar.
The fed has the luxury of softly raising rates, if at all. Money will remain cheap for some time to come. This helps North American oil better withstand the Saudi price war.
I like TRN, DVN, and RDS-B right now. TRN especially. The trick is to make sure we've hit a bottom in oil.
But as I said, in the long run, oil is king. No way will prices stay this low. There simply are not price compelling alternatives.
The market speaks loudest to me here. If a technology and commodity are compelling, the big boys will move in. When cars developed, not many businesses argued for staying with horses.
If solar, nuclear, and battery were indeed truly parity competitive, they'd be adopted by the energy supply chain in mass. Oil & natural gas remain the dominant form of cheap, efficient, and flexible energy...and probably will for decades.
I'm all for paying my fair share of taxes. I'm a big supporter of the concept of a commonweal. I just don't want to be fleeced. And everybody should have skin in the game.
It's beyond this kind of chat board to properly discuss such things. I'll say it again: you can't get something for nothing.
People like Harman, the lawyers, and politicians think they can, which is what they try to sell to constituents. This kind of behavior flies against my core culture...and really rubs me the wrong way.
Again, sorry for the rant.
I hate discussing politics. But you raise a significant issue. Litigation is indeed the one chief threat to an otherwise fabulous country.
The machinery of law and litigation is often used to hurt business especially. This TRN lawsuit is but an example. How about the incessant overtures to tax the heck out of even middle income earners...with class warfare polemics that obfuscate the real reasons there is income and wealth inequality.
All my life I've been a worker, saver, & investor. I've come to a point where I'm doing relatively well. But like I said, I keep dealing with tax proposals designed to redistribute my money to folks whom didn't take their opportunities to effectively work, save, & invest.
Fortunately we still live in a great country and thwart most of these things. But you never know how it will go. Like Harman, so many people resort to litigation in an attempt to essentially "get something for nothing".
Sorry for the rant.
I'm not an expert on Europe. I occasionally own European stocks, but not for too long. Overall, I think Europe is well run and a decent long term bet. I believe Europe will overcome its debt issues, although it remains to be seen how Greece plays out in the short term.
I own RDS-B. I'm down 10% but plan on holding basically forever. I think it's one of the better oil plays in this time of oil price flux. Just be careful of over concentrating in oil right now. Currently I'm in DVN, RDS-B, CBI, AA, TRN, DNOW, NOV, & DOW, all which are exposed one way or the other to oil...some directly, some indirectly.
I will say this: there are not many real bargains. I also think we'll see a cyclical bear sooner than later...before the secular bull once again moves onwards. I still am trying to go in when quality is cheaper...with an admitted bias to North America.
Hope this helps.
Kidding aside, I am breathing easier now. I admit I was gambling by staying on with TRN. Normally I am a staunch value investor & go away when there is managerial trouble, litigation being one of them. But the otherwise compelling value and sentimentality kept me in.
Us longs got lucky. Now it's a matter of when, not if, TRN reverts to at least a normalized PE of 13.
I will make some totally speculative guesses here.
My take is that this latest litigation is simply a copycat action. Another government organization got a wind of potentially finding a source of funds. Now they want a piece, following "the action".
In lieu of the latest tests, it seems less likely that anything is really deficient. The guardrails seemed to have passed most tests so far. Never mind the difficulty of qualifying safety, given the physics and various scenarios that have to be accounted for.
From what I have seen, I doubt there is much practical difference, if any, between various designs. Odds are something bad will happen if you crash into a guardrail. And that you won't come close to seeing catastrophically negative performance from the guardrail.
The main threat seems to be the disclosure issue. Not notifying clients of changes when this was required, even for a moot change in the product, is still wrong. And pretty dumb by whomever made this decision.
Still, it shouldn't mean that TRN should be fleeced. But as I always warn, you just never know when greedy government officials, lawyers, and, in this case, a competitor with an axe to grind collude to twist the letter of the law. Odds are against a really negative settlement...but it can happen...and why I agree that this still presents heightened risk.
Here is how I invested in TRN.
date shares total price $/share
17-Aug-2007 300 $4,958.95 $16.53 basis
31-Oct-2007 0.59 $10.50 $17.92 div
28-Nov-2007 400 $5,241.95 $13.10 basis
31-Jan-2008 1.79 $24.52 $13.68 div
30-Apr-2008 1.58 $24.58 $15.56 div
31-Jul-2008 1.45 $28.16 $19.42 div
31-Oct-2008 3.41 $28.22 $8.27 div
30-Jan-2009 4.84 $28.35 $5.86 div
30-Apr-2009 3.77 $28.55 $7.57 div
31-Jul-2009 4.05 $28.70 $7.08 div
30-Oct-2009 3.31 $28.86 $8.72 div
29-Jan-2010 3.65 $28.99 $7.95 div
30-Apr-2010 2.28 $29.14 $12.79 div
30-Jul-2010 2.87 $29.23 $10.17 div
29-Oct-2010 2.58 $29.34 $11.35 div
31-Jan-2011 2.12 $29.45 $13.88 div
29-Apr-2011 1.64 $29.53 $18.03 div
29-Jul-2011 2.27 $33.30 $14.68 div
31-Oct-2011 2.41 $33.40 $13.88 div
31-Jan-2012 2.12 $33.51 $15.82 div
30-Apr-2012 2.29 $33.60 $14.70 div
31-Jul-2012 2.91 $41.20 $14.15 div
31-Oct-2012 2.65 $41.36 $15.61 div
31-Jan-2013 2.11 $41.50 $19.71 div
30-Apr-2013 1.99 $41.62 $20.87 div
31-Jul-2013 2.53 $49.31 $19.47 div
31-Oct-2013 2.29 $57.09 $24.93 div
31-Jan-2014 1.93 $57.26 $29.61 div
30-Apr-2014 1.5 $57.41 $38.22 div
31-Jul-2014 1.74 $76.69 $44.06 div
10-Oct-2014 150 $5,425.45 $36.13 basis
31-Oct-2014 2.102 $76.87 $36.57 div
30-Jan-2015 3.355 $92.08 $27.45 div
This is a 155% gain on my initial position. 99% in total. This has crushed the S&P500...more so once TRN reverts to its supported selling multiple.
Mind you, my main risk is the guardrail issue going badly. But I think this is unlikely, in lieu of the latest tests. Fingers crossed.
All the best.