RMweb Premium cornelius Posted November 3, 2009 RMweb Premium Share Posted November 3, 2009 http://www.guardian.co.uk/business/2009/nov/03/warren-buffett-buys-bnsf-railway Crikey Link to post Share on other sites More sharing options...
Steadfast Posted November 3, 2009 Share Posted November 3, 2009 Very interesting! That's a lot of money to be spending in one go, even if it isn't real "note in my wallet" money. I didn't realise the BNSF had $10 bn of debt, and I always assumed that UP were bigger than BNSF, dunno why. With regard to the operation of the company, I wonder if the EMD stuff will be phased out, given Buffett's investments in GE. If it happened, I couldn't imagine it being any time soon, but it would certainly be a bit of a shake up if it did cheers jo Link to post Share on other sites More sharing options...
DavidB-AU Posted November 4, 2009 Share Posted November 4, 2009 Buffett is very "hands off" in his investments. This means he won't micro manage or force BNSF to buy GE units or anything, rather he'll let the People Who Know Stuff make the business and operational decisions. He must see a real future for rail if he's prepared to spend $36 billion. Cheers David Link to post Share on other sites More sharing options...
Adrian Wintle Posted November 4, 2009 Share Posted November 4, 2009 and I always assumed that UP were bigger than BNSF, dunno why. I believe they are - BNSF is the second largest, so I think UP is the largest. Adrian Link to post Share on other sites More sharing options...
34theletterbetweenB&D Posted November 4, 2009 Share Posted November 4, 2009 ... He must see a real future for rail if he's prepared to spend $36 billion. ... You know better than that: he must see a very large opportunity for profit from this investment. He says he is betting on the US economy, which I would read in respect of buying into rail as its' need for power, and specifically that generated from coal as oil and gas rise in price and make the US' coal reserves ever more important. It has to get from mine to generating site somehow. There's also the prospect of some federal handouts... Link to post Share on other sites More sharing options...
dave1905 Posted November 4, 2009 Share Posted November 4, 2009 There's also the prospect of some federal handouts... The major railroads want nothing to do with most Federal money because it comes with too many strings attached. The government has already this year required the railroads to invest $10 billion in PTC with negligible return on investment. They really don't need any more Federal "help". Link to post Share on other sites More sharing options...
DavidB-AU Posted November 5, 2009 Share Posted November 5, 2009 I believe they are - BNSF is the second largest, so I think UP is the largest. BNSF is larger than UP by revenue. Cheers David Link to post Share on other sites More sharing options...
CraigZ Posted November 6, 2009 Share Posted November 6, 2009 So, as the Great Northern and SP&S were historical predecessors of BNSF and built by James J Hill, and that the GN and SP&S were known as the Hill Lines, I would think it only fitting that BNSF should now be known as the Buffet Line... I'll get my coat, thanks... Link to post Share on other sites More sharing options...
highpeak Posted November 6, 2009 Share Posted November 6, 2009 His grandson asked for a trainset for Christmas. Get me my coat while you're up, please. Link to post Share on other sites More sharing options...
signalmaintainer Posted November 6, 2009 Share Posted November 6, 2009 BNSF will be a wholly-owned subsidiary of B-H, and it will disappear from the New York Stock Exchange sometime in the first half of next year. There may be more money available for investment back into the company, rather than paying millions in dividends to stockholders. Berkshire-Hathaway has a different business model that's worked well for many years; not paying dividends is part of its strategy. On a personal note, I'm not anticipating major changes to either how BNSF is operated or our culture. Perhaps it's because we're so busy with work, there's not been much discussion among employees about the deal beyond the initial 48 hours of the announcement. Business as usual. Link to post Share on other sites More sharing options...
RMweb Gold The Fatadder Posted November 6, 2009 RMweb Gold Share Posted November 6, 2009 Berkshire Haverway (Buffets holding company) has purchased all of the stock in BNSF, hence they have purchased the company. The ownership of the company is the stock in that company Link to post Share on other sites More sharing options...
jonhall Posted November 6, 2009 Share Posted November 6, 2009 Anyway, I saw an interview with this chap on the Beeb recently, coincidence? He is the second richest person on the planet, hardly surprising BBC want to interview him really. If you look at what stocks his company (or rather the company he controls) holds, over and above companies they own outright, (this list is from the 2008 letter to investors so is probably out of date, but you get the idea! ) Percentage of company owned American Express Company . . . . . . . . . . . . . . 13.1% The Coca-Cola Company . . . . . . . . . . . . . . . 8.6% ConocoPhillips . . . . . . . . . . . . . . . . . . . 5.7% Johnson & Johnson . . . . . . . .. . . . . . . . . . 1.1% Kraft Foods Inc. . . . . . . . . . . . . . . . . . . 8.9% POSCO . . . . . . . . . . . . . . . . . . . . . . . 5.2% The Procter & Gamble Company . . . . . . . . . . . . 3.1% Sanofi-Aventis . . . . . . . . . . . . . . . . . . . 1.7% Swiss Re . . . . . . . . . . . . . . . . . . . . . 3.2% Tesco plc . . . . . . . . . . . . . . . . . . . . . 2.9% U.S. Bancorp . . . . . . . . . . . . . . . . . . . . 4.3% Wal-Mart Stores, Inc. . . . . . . . . . . . . . . . 0.5% The Washington Post Company . . . . . . . . . . . . 18.4% Wells Fargo & Company . . . . . . . . . . . . . . . 7.2% Link to post Share on other sites More sharing options...
Glorious NSE Posted November 6, 2009 Share Posted November 6, 2009 So if he has a biz train, will it have a Buffet car? Get me my coat while you're up, please. Erm, yep, and while you're at it... Link to post Share on other sites More sharing options...
k-59 Posted November 7, 2009 Share Posted November 7, 2009 He must see a real future for rail if he's prepared to spend $36 billion. Cheers David I'm not surprised. Before the crash US rail freight was getting close to the capacity limit. Link to post Share on other sites More sharing options...
dibber25 Posted November 7, 2009 Share Posted November 7, 2009 "His grandson asked for a trainset for Christmas..... Get me my coat while you're up, please." His other grandson asked for a cowboy outfit..... and got? Suggestions, please. Oh boy there's no jokes like the old jokes! Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted November 8, 2009 RMweb Gold Share Posted November 8, 2009 I'm not surprised. Before the crash US rail freight was getting close to the capacity limit. Basically Buffet has done what he is very good at - he has gone into an industry at almost the bottom of its business cycle while revenues, dividends and the share price are low and bought a company with a lot of core strength in that businesss and which is also very well placed for the future - especially as it serves some of the key low sulphur coal mining areas in the US; so it will do very well if various energy/CO2 emission regulations come in and in any case business will grow as the US economy recovers. Link to post Share on other sites More sharing options...
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