Jump to Navigation
Home

Main menu

  • Home
  • Latest Stories
  • Markets Map
  • Trends and Sentiments
  • Leading Topics
  • News Search
  • Comments and Analysis

Secondary menu

  • Latest News
  • Top Rated
  • Most Popular
  • Archive
  • About Us
  • Disney InstituteVoice: How Disney Uses Spontaneity To...
  • What's behind the trade battle with China
  • Delivery boom is changing everything about the restaurant...
  • FBI Director Wray works to defend the bureau's image...
  • Trimble To Acquire Viewpoint For Construction Software...
  • HomeStreet's (HMST) CEO Mark Mason on Q1 2018...
  • Capital One Financial Corporation 2018 Q1 - Results -...
  • Popular's (BPOP) CEO Ignacio Alvarez on Q1 2018...
  • HFF, Inc. 2018 Q1 - Results - Earnings Call Slides
  • Brexit Fear Mongering Proving Wrong

    More on Buffett's purchase of Burlington Northern Santa Fe Railroad

    Wed, 11/04/2009 - 18:26 EDT - Ezra Klein - Washington Post
    • Comments

    A reader responds to my earlier post:

    There are many reasons Buffett purchased BNSF. The WSJ argument is tenuous, at best. Your analysis hits on potential factor involved in his timing (he could have bought much earlier). However, since he passed the 20% ownership mark a year ago after a slow build-up (of two other railroads, as well; he didn't purchase any shares in CSX, as it is the black sheep of the big four), your conclusion that Buffett's purchase "represents a success of Obama's revitalization" gives credit a little late and to the wrong factors.

    The entire railroad industry, since the days of deregulation in 1978 and 1980, and the gradual certainty and panic over waning oil supplies, has steadily improved volume, margins, and safety. On the BTS.gov site, you will find statistics for an important measure of railroad business--revenue ton miles--growing rapidly for two decades. You may also find measures of their efficiency, which also increase steadily (look at the distance a ton of freight can be transported with a single gallon of diesel). One could argue that the railroad industry has been revitalized and is performing extremely well.

    Just these two statistics, when viewed by individual company, show BNSF's sizable lead over its competitors. They are best in class. They also have what Buffett frequently looks for--insurmountable competitive positions (expensive to lay track, operational efficiency, experience, brand, etc.), solid managers, and an industry that has staying power.

    I would say that he has lots of other reasons that include his company and legacy, pieces that complement the powerful straw-into-gold machine he has created, and benefits from BNSF to his other companies, but the man is way more complicated than the image he portrays of himself, so I'll stop.


    • Original article
    • Login to post comments
     

    Related

    • CSX Corp. Not Interested In Canadian Pacific‘s Offer

      Canadian Pacific Railway Limited (CP) reportedly proposed a merger deal with US rail giant, CSX Corp. (CSX) on the back of an improving industry environment. The news was first reported by The Wall Street Journal, which cited anonymous sources about the proposal to combine two of the largest rail

    • Exclusive: BNSF to take bids to buy up to 5,000 safer oil railcars

      By Kristen Hays

    • How To Play America’s Railroad Boom

      The North American railroad revival is in full bloom. This year, according to the Wall Street Journal, railroads will spend over $14 billion on upgrades to rail yards, refueling stations and additional tracks – that’s up some 40% since 2008’s peak. Why the extra spending? Well, following along with Warren Buffett’s prescient outlook in 2009, the industry is set to boom for years to come. And while this unexpected revival of the “iron horse” continues there are certainly ways that you and I can cash in.

    • If Buffett Were Canadian, He’d Want This Stock (Canadian National)

      When Warren Buffett likes a certain kind of candy he buys the whole dang candy shop. In late 2009, Buffett’s buy big mentality led him to a well-positioned railroad play. But instead of just adding to his shares, Buffett bought out Burlington Northern Santa Fe Railroad (BNSF.) Looking at today’s ticker, Buffett made the right move (again.) Since his purchase, railroad stocks have been burning up the tracks. For reference, the Dow Jones Transportation Average, which started as a simple gauge of railroad activity, is booming.

    • Railroad Stocks: Determining Fair Value

      Ever since Warren Buffett acquired Burlington Northern Santa Fe (BNI), I have been keenly following the railroad sector in hopes of finding a quality company that could be a part of my long term portfolio. Railroads should be an attractive investment to most investors since the industry has high barriers to entry.

    • Time for a 'Pure Play' Railroad ETF

      ETF Database submits: Earlier this year, railroad stocks received a lot of attention after the world’s most famous investor, Warren Buffett, announced that he would buy the rest of Burlington Northern Santa Fe for $26 billion. This mega-acquisitions put a ‘boring’ industry in the spotlight for a brief time and once again on investors’ radars.

    • Rail companies eye LNG-powered engines amid high diesel cost

      Electro-Motive Diesel, the world’s largest diesel locomotive manufacturer, has taken delivery of the first of four specially designed liquefied natural gas (LNG) tenders ultimately destined for use on the Canadian National railroad. The remaining tenders, each equipped with a fuel tank capable of carrying 45,500 litres of LNG, are due to be delivered before the end of June, according to specialist industry publication “Railway Age”.

    • Tracking the Railroad Industry

      Norfolk Southern Corporation (NSC), Union Pacific Corporation (UNP), CSX Corporation (CSX) and Burlington Northern Santa Fe, LLC (BNI) are the major players in the US railroad industry. All of them have increased their operating revenues as well as operating income over the past one year.

    • Stock Buybacks And Above Average Long-Term EPS Growth Will Propel CSX Higher

      By Tim Travis:When Warren Buffett's Berkshire Hathaway (BRK.B) acquired Burlington Northern Santa Fe in 2009, many Buffett followers such as Columbia University professor Bruce Greenwald questioned whether he had lost his mind.

    • 5 Large Cap U.S., Canadian Railroads: Recent Performance Review

      By Zvi Bar:Railway companies are considered conservative investments. In the United States and Canada, rail is primarily used to transport materials, machinery and other heavy goods. It is an economical method of transporting, and a business that will grow in need over time.

    Latest

    McCabe Launches New Legal Defense Fund, May File Wrongful Termination Suit Against Trump
    McCabe Launches New Legal Defense Fund, May File...
    Grant's Almost Daily: China Impulse Control
    Grant's Almost Daily: China Impulse Control

    Markets Map

    Markets Map

    Follow Us

    Follow Us on Facebook, Twitter, Google Plus and RSS LinkedIn Facebook Twitter Google Plus RSS
    S&P 500: 2579.37 0.16% FTSE: 7487.96 -0.07% Nikk.: 22420.08 1.82% DAX: 13465.51 1.75% HSI: 28594.06 1.22% FX: EUR/GBP: 1.1401 USD/EUR: 1.1618 JPY/USD: 114.1510 Commodities: Gold: 1276.1000

    Bullfax.com - Market News & Analysis 2008-2011
    Contact Us | About Us | Terms & Conditions

    Follow Us on Facebook, Twitter, Google Plus and RSS LinkedIn Facebook Twitter Google Plus RSS .

    Secondary menu

    • Latest News
    • Top Rated
    • Most Popular
    • Archive
    • About Us