Railroads: Buying a railroad sounds quaint. You won't even be able to do it in the new version of Monopoly. But the fact is, the products that industrial companies make still have to be shipped - and railroads are likely to enjoy increasing cost advantages over competing forms of transportation.

For starters, trains are three or four times as fuel efficient as trucks, not to mention airplanes. High energy costs help indirectly as well. Both of the industry's giants - Burlington Northern Santa Fe and Union Pacific - profit from hauling low-sulfur coal from the Powder River Basin in Montana and Wyoming.

In addition, the rails are benefiting from new technology. Major railroads are built on very complex information systems that keep track of how trains are moving and where all the freight is. Sophisticated computer systems can greatly raise efficiency and prevent freight from sitting in rail yards.

And if you still wonder about the potential of the transportation sector in a growing economy, consider this: Since the low four years ago, the Dow industrials have risen nearly 50%, but the transport stocks have doubled.

Both Burlington Northern and Union Pacific trade at low P/Es, but I prefer Burlington. UP has had lots of problems since it acquired Southern Pacific 10 years ago. Some analysts argue that UP has more room for improvement, but I'd favor the railroad with the better record.