The cycle of capital spending is behind them. They spent a whole lot of money the past couple of years buying or refitting their locomotives, which is a very expensive proposition, ... So you're going to find free cash flow in these companies, rising earning because the economy does well and they're trading at only about 12 times earnings.
More Quotes from Vince Farrell:
I think what really triggered the rally was the surprise cut by (Federal Reserve Chairman Alan) Greenspan in interest rates. But earnings have been good enough to continue the rally. Now the concern going forward is Can earnings grow in 1999.Vince Farrell
The data's mixed on the economic side but we have absolutely no confidence whatsoever when profits start to grow. And I think we need that before the market can improve.
Vince Farrell
The market is not going to figure out where it wants to go until you have some conviction about where the Fed wants to go in terms of raising interest rates.
Vince Farrell
If the market were to do well today as the futures now indicate, we probably would just reverse that tomorrow. So I don't think you'll get much in the way of a trend. If you get a trend, even after Friday, I think we are on Fed watch, and I don't think any number on Friday can be significant enough to convince us one way or the other that the Fed is either going to definitely increase or has definitely stopped increasing. So we're treading water for a while.
Vince Farrell
I think today, at worst, the Fed might tilt towards a tightening. But if they don't, if they keep policy unchanged, I would expect you would see . . . the bond market should rally significantly too.
Vince Farrell
Today, you had people reacting to the oil prices, the rumor about North Korea and the more than 200-point rally on Thursday.
Vince Farrell
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Based on Topics: Capital Quotes, Money & Wealth Quotes, Past QuotesBased on Keywords: locomotives, refitting
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