Warren Buffett’s trains (Burlington Northern Santa Fe) & model-trains

Have a listen to what Warren Buffett said on CNBC live about his decision to buy the remaining shares of Burlington Northern Santa Fe. Here is a good quote (emphasis added),

“[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

By the way, The Snowball has a paperback version now, check out a brief review of the paperback edition. And here is my “review”/”best of” of the hardcover edition.

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 4 Update: Have a listen of Warren on CNN talking about the deal and other things. And Warren on Fox News (transcript and video). And Alice Schroeder’s (Warren’s biographer) opinions on the deal.


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.

2 Responses to Warren Buffett’s trains (Burlington Northern Santa Fe) & model-trains

  1. […] 畢菲特 – 鐵路大亨 畢菲特今天用了$340億元 ($34 billion) 買了 Burlington Northern Santa Fe 鐵路。在我的英文blog,你可以聽到他老人家直接在CNBC的說話。 […]

  2. […] is an excerpt from Alice’s Bloomberg column about the Burlington Northern Santa Fe deal and the 50-to-1 stock split, “Buffett Revisits Hunting Ground for Survivors“, Warren […]

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