One last buy before November concluded. This is a transaction I wasn’t expecting to place, but the crash in oil prices following the OPEC decision to not cut oil supply to the market caused repercussions elsewhere in other industries. I initiated a new position in Canadian National Railway (CNR.TO) (CNI). Canadian National Railway is the larger of the two Canadian railroad companies and the second largest publicly traded railroad companies in North America. The company commands 20,000 miles of tracks and is strategically well placed to move oil from Alberta, the Bakken fields and to/from the refineries in the Gulf Coast. A holding of Bill Gates’ Cascade Investments, this stock has made Mr. Gates and his investment firm very rich over the years. I have initiated with a position of 20 shares in the Canadian listed stock, which adds C$20.00 to my dividend income annually going forward.
The Case for Railroads
Railroads are the pulse of the economy. Whether transporting crude, lumber, merchandise, agricultural or industrial products, railroads are what keeps the economy moving. While the transportation for entities such as coal (which used to be the largest users of railroad service a few years ago) have fallen due to the fall in crude prices and rise of green energy alternatives, the transportation need for crude has risen significantly. North America is going through an energy revolution with the rise of crude production in Alberta, the Bakken fields in North Dakota and the Eagle Shale. While pipelines are the largest competitors for crude transportation, the immediate lack of infrastructure spells good news for the railroads.