Within Dow Theory, transportation stocks play a role as lead indicators in stock growth. The reason is that, when the economy is starting to grow, the first parts of the economy to feel it are the ships, trucks, and railroads delivering raw materials to factories, and finished products to distribution centres.

The chart above, which I used in an earlier column, shows how an ETF based on the S&P Transportation Index, shows the extraordinary jump the markets took after the recent US election. There seems to be no loss of faith in the market’s outlook even after the installation of Mr. Trump as president.

For the record, the Trump presidency makes me particularly glad to be a Canadian. For purposes of this column, however, it also shows how a single individual can transform political systems and even markets.

The same applies to companies and markets, and that is the feature of this article. Observe the recent movement in CSX Corporation – a stock I bought yesterday, and which in my view will continue to run. 

That amazing jump in the stock price is based on the knowledge that a leader in the railroad industry named Hunter Harrison has taken a job as chairman and CEO of the company. Because of a variety of clauses in his contract with CP, to take over at CSX he had to leave behind a fortune in options and other benefits at CP. Why did he do it? Because he has the fire in his belly to take on another great battle.

A lifelong railroader, the 72-year-old Harrison has a long record as a turnaround artist in the business. As the following chart shows, his impact on CP, the company he just left, was profound. During his five years at the helm, share prices rose from about $60 to more than $200 at the peak. Today they sit at about $150.

That’s the kind of guy I want running my railroad company, CSX.