Railroad has many uses. Maybe he's being sentimental.
Posted on 11/03/2009 3:15:24 PM PST by Steelfish
Buffett's Big Bet: $34B On 2nd-Largest Railroad Freight expectations: Warren Buffett goes `all-in' with $34B bet on railroads and the economy
By Samantha Bomkamp,November 3, 2009
NEW YORK (AP) -- The biggest name in investing is making what he calls an "all-in wager" on the U.S. economy -- $34 billion to own a railroad that hauls everything from corn to cars across the country.
The acquisition of Burlington Northern Santa Fe, the nation's second-largest railroad, would be the biggest ever for Warren Buffett's Berkshire Hathaway investment company.
It's a natural fit for the Oracle of Omaha, a city with a special place in railroad history. It was the starting point for the westward push of the transcontinental railroad. Today, Omaha is the headquarters of Union Pacific, and Burlington Northern trains rumble through.
In a statement, Buffett, whose investing decisions are carefully scrutinized by the world of finance, voiced confidence in the railroad industry.
"Most important of all, however, it's an all-in wager on the economic future of the United States. I love these bets," he said Tuesday.
Berkshire Hathaway Inc. already owns a 22 percent stake in Burlington Northern and would buy up the rest under the deal, for a total value of $34 billion. It still needs approval from Burlington shareholders and antitrust regulators, both expected early next year.
Burlington Northern is the biggest hauler of corn and coal for electricity, making it an indicator of the country's economic health. It also carries everyday items such as refrigerators, clothing and TVs from Western ports like Los Angeles and Seattle.
(Excerpt) Read more at finance.yahoo.com ...
A big portion of BNSF’s business is coal. We know how Obama wants to curtail coal. Of course, Berkshire’s Mid-America Energy also uses much coal. How does this play with the global warming game?
Rail may be a rising star in transportation, since we can expect fuel prices to rise sharply after Cap and Trade, making trucking less palatable. Anybody else getting a real “Atlas Shrugged” vibe from this?
” The biggest name in investing is making what he calls an “all-in wager” on the U.S. economy “
BS... He’s betting that fuel costs stay high enough to preclude any major rebound in the trucking industry....
And that’s *not* good for the U.S. economy.....
Hauls coal out of Campbell County, WY, which if it were a country, would be the 3rd largest coal producer in the world! (Gillette, WY)
Buffett has been adding shares of railroad companies for 3+ years now.
Railroads!!!???
Hauling Chinese cars?
If you are rich as Warren Buffet you don’t buy a train set, you buy a railroad!
Wouldn’t Democrats love to throw all sorts of tax money to rail?
He’s betting on the rail road because he is obama’s buddy and figures the next stimulus will pay off for him that way.
http://www.businessinsider.com/duh-warren-buffett-is-betting-on-lots-more-stimulus-2009-11
That's allegedly my next assignment. Gillette and Basin Electric Co-op's Dry Fork energy complex (2 new 800MW plants)
You mean you feel like he might be having an affair with some guy who owns a steel mill?
Right on, right on, right on!
Its a commodity play. The percentage of freight moved by rail as compared to wheels will remain high. They also have built-in pricing power and regulatory capture.
Railroad has many uses. Maybe he's being sentimental.
he is probably expecting some major bailout money
Buffet is playing with his own money here (and others), so I think we can exclude anything political from his calculus.
I have to wonder if he is not going into something that has real tangible value absent the USD. A railroad with tracks, right of ways, equipment; that is tangible. You don’t need a USD or US Government to create commerce with a railroad. No airport gates, no US highway, no permits..
Makes one think...
and stock split 50-1
Well there are all of those Abandoned military bases that could be used as “Work Camps”.
All they need is a spur line.
Rand Paul is heading to the Senate. “Atlas Shrugged” is furiously debated on FR. And now a billionaire causes buying the railroad a vote for America’s future? I hope Buffet doesn’t go Galt on us. Well, Galt enough to quit funding liberals would be good.
“Hauling Chinese cars?”
Hauling all those cargo containers of Chinese crap to sell at Wal-Mart. That seems to be the only growth industry out there.
One of his laments at the past 2 meetings (I own a B share mainly as my admission ticket) is the shortage of things big enough to buy with Berkshire’s cash.
Exactly! I just said as much before I read down enough to see yours.
Been to Gillette...installing the centrally controlled city wide irrigation on a Computer Oriented Programming System, and landscaping at Campbell County High School (home of the Camels)... gotta go to Humphrey’s for a steak, where “a good hump is hard to find” ....and I’m not kidding.
You gotta go out West once in a while...we haul everything by rail
Hauling box cars full of PVC pipe to install irrigation on all the golf courses... “Hey Charlie, I’ll meet you at the station to load the pipe on the truck”.
Hauling all those cargo containers of Chinese crap to sell at Wal-Mart. That seems to be the only growth industry out there.”
Bingo we have a winner.
Will do, CID.
Gotta wait for the boys in Chicago to pull my name out of the hat. I've been a bad boy on the last two projects. But have behaved myself at the LOS in NoDak. Basin seems to like me.
BTW, I commission the power equipment at Power Plants. DFS goes on backfeed 15 Dec. Time to roll motors.
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