November 4th, 2009 
Diana
Berkshire Hathaway chairman and world’s second-richest man Warren Buffett said Tuesday that his $34 billion purchase of Burlington Northern Santa Fe Railway is a bet on America’s future.
It’s a bet, but not just on America. With the investment, Buffett is also betting on China’s rebound and growth, the price of oil going back up, the continued use of coal to make electricity and a higher profile for the nation’s railroads, thanks to a push from the White House.
Buffett already owned 22 percent of the Western U.S. railroad giant; the deal announced Tuesday would give him the entire railroad, the second-largest of the nation’s six major lines. It marked the biggest deal to date for Buffett, who also owns or has large stakes in Coca-Cola, Dairy Queen, Wrigley, Geico and several other companies, including The Washington Post Co., where he is a director and the largest non-family shareholder.
Buffett began buying into Burlington Northern (BNSF) in 2007, and took his position up to 22 percent. His accumulation of BNSF shares coincided with the resurgence of America’s moribund freight rail industry. In the 1970s and ’80s, traffic had dropped so much that companies actually tore up unused tracks, as manufacturers switched their shipping away from railroads to cheaper 18-wheelers. But as fuel prices soared and U.S. demand for Chinese imports surged, railroads experienced a rebirth. Their stock soared.
The 79-year-old Buffett invests for the long-term; meaning, for decades after his death.
“Buffett is making an elephant-sized bet on three things here and all are related,” said Art Hogan, Jefferies managing director. “He thinks the economy in the U.S. is getting better and will continue. He believes that energy prices will continue to rise and that trains will be more productive than trucks in that environment, and third, and most important, he sees Burlington Northern as cheap with a longer-term investment time horizon.”
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Nonsense. Warren Buffett’s article was pure political drivel. If he wants to give more money to the government no one is stopping him. Does he really think The President can spend the cash better than he can?