Welcome to the 'New Somerset and Dorset Railway'
Monday, August 07, 2006
rail expansion - signs in unusual places!
When an investment newsletter includes the following item you just know we're in the right game!
'"Since I've been retired, I have focused on investments," he began. "I don't believe in any of the theories I read. They're worthless, in my opinion. I'm a stock-picker. That's the only way to do it. And you have to do it yourself. You can't trust what you read in the paper. I used to study US companies, but now I look only at French firms."I've made a lot of money at it. It's not that difficult really. The secret is to find companies that make things. You find a company that makes a profit by making things that people want; you're not going to go too far wrong."And right now, I'm concentrating on one sector that I am sure is going to make a lot of money – railroads.
It's obvious. Fuel is so expensive. The trucking firms have to increase prices. And the roads are clogged up anyway. But the railroads have completely different economics. The real cost is the capital it takes to build the things. Then, after the first investors go broke, they're very good businesses. And getting better all the time. Once you've paid off the capital costs and reached a certain level of volume, everything else goes right to the bottom line. "Of course, in France you can't buy the railroads; they're owned by the government. But there are a couple of railroad suppliers – companies that make parts for the trains – that are very profitable."'
[The Daily Reckoning London, England Monday, 7 August 2006}
Or Railstaff (issue 104, July 2006) reports that the rail industry in the UK has added 315 trains a day and passenger numbers are up 3.6% over the past year.
Or from The Times 27 July 2006
"China starts the biggest rail expansion in history"
'China has launched the biggest railway expansion the world has ever seen.
China already has 46,600 miles of track...but that is far from enough to
meet demand for passengers and freight. The Ministry of Railways has set out
ambitious plans to end bottlenecks, with about 6,000 miles of track added by
2010 (equivalent to about 60% of the existing British network) and the rail
network will extended a total of 60,000 miles by 2020.
'A senior transport specialist at the World Bank in Beijing said
"Historically, this is the only country that has ever attempted such an
increase. This has never occurred before in history"
But funding is a headache - China needs £143 BILLION by 2020, but only has
enough to fund half of that.
(Article by Jane Macartney in Beijing, P42 The Times, 27-7-06).
The Chinese are not stupid - they know that their future economic success will owe nothing to dying oil-based technology. It's just a shame that they were precipitate in scrapping their steam engines and industry, as with oil vanishing they'll need to either electrify that huge network or convert at least part of it to wood-burning steam if they want to stay ahead of the West.
Back in the UK in the 70s we almost had to apologise for being rail enthusiasts. Thirty years on it seems the world has finally caught up with us, with Peak Oil and Climate Change snapping at our heels. Suddenly it's fashionable and cool to be a railway enthusiast. It's quite heartwarming!
Reinstatement from Bournemouth to Bath suddenly seems like a mainstream idea!