US Railroad Carloads Below 2009/2010 Lows by Eric Bush, CFA – Gavekal Capital Blog
Total railroad traffic carloads have fallen off a cliff this year. This is volatile weekly series so looking at the one-year moving average is useful. From 1988-2008 the one-year moving average vacillated between 320,000 carloads to 350,000 carloads. The one-year moving average dropped to 265,000 in early 2010 but rebounded to around 290,000 from 2011-2015. It has since dropped like a stone and the latest reading is the lowest on record for this series.
A decline in coal carloads is a major reason for the drop in overall total carloads. Coal carloads have declined by about half since 2011. Coal accounted for about 45% of the total carloads in 2011. That has dropped to about 33%. There has also been a significant decline in petroleum products. In aggregate petroleum products only accounts for about 5% of total carloads. However, the decline in petroleum products has been pretty significant from a percentage basis. From its peak in 2014, petroleum product carloads have declined by nearly a third.
Seth Klarman: Investors Can No Longer Rely On Mean Reversion
"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More