“[Burlington Northern Santa Fe] do it in a cost-effective way and extraordinarily environmentally friendly way. BNSF last year moved on average, it moved a ton of goods 470 miles on one gallon of diesel. It releases far fewer pollutants into the atmosphere. It saves enormously on energy consumption and, you know, it diminishes highway congestion. Rails last year moved 40 percent, more than 40 percent, over the country. They moved more than all those trucks, just the four big railroads. It’s a very effective way of moving goods. I basically believe this country will prosper and you’ll have more people moving more goods 10 and 20 and 30 years from now, and the rails should benefit. It’s a bet on the country, basically.”
WSJ said the deal is a “text book example of his value-based strategy in action“. For more news see, “Buffett’s firm to buy Burlington Northern (CNN)” and “Warren Buffett, American Railroad Barron (Reuters)“, “Berkshire Buys Burlington in Buffett’s Biggest Deal (Bloomberg)” and Berkshire Bets on U.S. With Purchase of Railroad (NYT).
An excerpt from the BNSF deal (emphasis added),
“Our country’s future prosperity depends on its having an efficient and well-maintained rail system,” said Warren E. Buffett, Berkshire Hathaway chairman and chief executive officer. “Conversely, America must grow and prosper for railroads to do well. Berkshire’s $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry.
“Most important of all, however, it’s an all-in wager on the economic future of the United States,” said Mr. Buffett. “I love these bets.”
On this day, it may be fitting to include the following excerpt from The Snowball – by Alice Schroeder (emphasis added),
“Warren had a little single oval HO-gauge train set and coveted a more elaborate version, the kind he saw at the Brandeis deaprtment store downtown, which had multiple engines twisting and turning past flashing lights and signals, rising over snow-covered hills and dropping into tunnels, racing past tiny villages and disappearing into pine forests. But the closest he came to owning it was buying the catalog that depicted it.
‘If you were a little kid with one little oval track, looking at this thing, it was completely unbelievable. You’d gladly pay a dime for the model-train catalog and just sit there and fantasize.‘ [Warren Buffett said]” – The Snowball – by Alice Schroeder
Note: Baby Berkshire shares (i.e. class B) will be easier to buy now once the 50-for-1 stock split is approved (a formality).
Nov 9 Update: As I and many people had expected, “Warren Buffett to Sell Stakes In Union Pacific & Norfolk Southern” to make the US gov anti-trust people happy.