Alice Schroeder on Warren Buffett and BNSF

After writing the insightful Warren Buffett biography The Snowball, Alice Schroeder has gained my respect and I look forward to read her analysis of Warren’s investment decisions.

Here 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 Buffett called Berkshire Hathaway Inc.’s deal to buy the part of Burlington Northern Santa Fe Corp. that it doesn’t already own an “all-in wager on the economic future of the United States.”

If so, it’s a survivalist bet. The railroad business is never going away, but it’s not going to lead the economy out of recession, either. Buffett has spent a lot of time in the last year burnishing his legacy by tackling Franklin Roosevelt’s role as the verbal antidepressant for this wretched economy. As I have said before, though, Buffett isn’t as bullish as he sounds.

[…] A final motive I am confident about is that Buffett finally has a plausible excuse to split Berkshire’s B shares. He has spilled a lot of ink over the years decrying stock splits. A 50- to-1 ratio isn’t a stock split, it is a mincing.

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