Mark Anthony

Coal, Grain and Imports Make Burlington Northern Another Good Move By Buffett

There is still plenty of opportunity in dry bulk shippers. They are still way below their fair price at this point.

I have not particularly looked at SEA. But if it is a dry bulk shipper it is good. I look at fleet size versus market capital as one criterial to compare dry bulk shippers. I have in my portfolio EXM, EGLE, TBSI, DRYS. I am not saying SEA is better of worse. It's impossible and un-necessary for me to have everything.

On the precious metal end, I definitely put virtually all my weight on precious metal palladium. Good thing is there are only two players: SWC and PAL. Here is where to look up precious metal prices:
www.kitco.com/market/

Here is where to look up BDI shipping index:
www.dryships.com/pages...


On Nov 13 06:01 PM dieuwer wrote:

> Mark, what do you think of SEA?
>
> But since a lot of people now "get it", the opportunity might no
> longer be there.

Coal, Grain and Imports Make Burlington Northern Another Good Move By Buffett

You are not the only one who gets it. Quite some people get it:

Railway transportation
= Coal play
= China play
= Dry Bulk Shipping (across the ocean)
(EXM, EGLE, DRYS, TBSI, GNK, DSX...)

Warren Buffet is too big to make a move to acquire pathetically little dry bulk shipppers like EXM, EGLE. He is too rich. The world does not have enough ships for him to buy. So that's a big opportunity left to our small investors.

Buffett's Burlington Buy Is Really a Bet on China

Mr. Market surely is on the slow thinking part.

I pointed out that after Warren Buffett bought railways, the next logical thing to think about are dry bulk shippers.

It took quite a few days for the market to figure that out. Today! BOOM! All dry bulk shippers rallied explosively: EXM, EGLE, DRYS, GNK, DSX, you name it. TBSI hasn't catch up yet but it should by tomorrow. I hope I have a chance to add some TBSI tomorrow before the price raises too much.

It will take people forever to realize the huge potential in the precious metal palladium, and the mining stocks SWC and PAL. It's OK, I will just keep adding more shares while the price is still cheap. Today is a great day for me.

On Nov 09 02:39 PM Mark Anthony wrote:

> Damn:
>
> It is hard to make a move before the market does. I have been watching
> PCX closely for nearly 4 months (since the bottom at around $5 in
> July). Never get a good chance to get into this coal play. Warren
> Buffett's bet on BNI adds some urgency to get into coal plays. But
> the market simply would not co-operate with me.
>
> I am determined to buy some PCX on the next significant dip. For
> now, dry bulk shippers are still dirt cheap to buy. Better buy before
> Warren Buffett makes his next move. If he bought railway, dry bulk
> shippers are the next logical target.
>
> Not sure if Warren has spare cash left to buy shippers, after he
> spent so much on railways.

Buffett's Burlington Buy Is Really a Bet on China

Mayascribe:

I was impressed reading PCX's recent earning's conference and the CEO says they are starting to sell metallurgic coal to China. That was well before Warren Buffett's railway buy. The CEO's claim is one piece of news that surprised me a bit and changed my prospect of US coal towards the bullish side, especially metallurgic coal.

Buffett's Burlington Buy Is Really a Bet on China

Every one agrees Warren Buffett's railway move is ill times and way over-priced. As a patient investor Warren would normally wait for the best pricing before he buys, he rarely buy at the top of price.

There is only one explanation, that is, an urgency he needs to make the move quickly. This is a big bet on US dollar bear and US export economy bull, and he knew he needed to move quick. He is too big to make quick moves in smaller players, like dry bulk shippers. A big railway play is where he can bet $44B at a time.

Does Warren see an imminent collapse of the dollar, and the inevitability that we must export a lot of raw materials to China to balance the trades?

On Nov 09 01:59 AM TraderRob wrote:

> Buffet's move here is indeed an "all in bet", perhaps on China, which
> may or may not instill lasting confidence. But it should be noted
> that his purchases of GS and GE during late fall of last year didn't
> have any major direction changing effects on the stock prices. In
> the end it's all about the fundamentals.
>
> The premium paid for BNI was particularly hefty and suggest that
> we're all missing something that the Oracle isn't. It's not a complex
> move, because Warren is a simple man, but the gamblin' rhetoric expressed
> was not particularly directed at any results within the next three
> or even five years.
>
> I don't suspect that the U.S. economy will wither away through the
> shroud of darkness, but I do expect for there to be particularly
> difficult times ahead for the rails and transports as a whole. Warren
> is a Value Guy to his death and sees a winner in Burlington, but
> we should all ask ourselves just how far back down the rabbit hole
> we'd be willing to follow him if/when this thing rolls over.

Buffett's Burlington Buy Is Really a Bet on China

Damn:

It is hard to make a move before the market does. I have been watching PCX closely for nearly 4 months (since the bottom at around $5 in July). Never get a good chance to get into this coal play. Warren Buffett's bet on BNI adds some urgency to get into coal plays. But the market simply would not co-operate with me.

I am determined to buy some PCX on the next significant dip. For now, dry bulk shippers are still dirt cheap to buy. Better buy before Warren Buffett makes his next move. If he bought railway, dry bulk shippers are the next logical target.

Not sure if Warren has spare cash left to buy shippers, after he spent so much on railways.


On Nov 06 07:22 PM Mark Anthony wrote:

> Yes! I think more and more people are starting to get it:
>
> Railway transportation
> = Shipment of Coal Export to China
> = Needs to buy US coal producers (PCX, JRCC, ANX, ACI...)
> = Needs to buy dry bulk shippers (EXM, EGLE, TBSI, DRYS, etc.)<br/>
>
> Dry bulk shippers is one of the things I am most bullish on. Another
> is one critical precious metal that China has ZERO product, which
> China desperately needs to hoard, and which America has one of the
> world's most unique producer:
>
> The palladium metal, and Montana based SWC, Stillwater Mining.<br/>seekingalpha.com/autho...
>
>
> One thing I do not understand is Buffett's timing and pricing of
> his BNI acquisition. Maybe there is an urgency for him to get out
> of the US dollar cash positions ASAP, otherwise there is no good
> explanation of his bad timing and pricing.

Buffett's Burlington Buy Is Really a Bet on China

Yes! I think more and more people are starting to get it:

Railway transportation
= Shipment of Coal Export to China
= Needs to buy US coal producers (PCX, JRCC, ANX, ACI...)
= Needs to buy dry bulk shippers (EXM, EGLE, TBSI, DRYS, etc.)

Dry bulk shippers is one of the things I am most bullish on. Another is one critical precious metal that China has ZERO product, which China desperately needs to hoard, and which America has one of the world's most unique producer:

The palladium metal, and Montana based SWC, Stillwater Mining.
seekingalpha.com/autho...

One thing I do not understand is Buffett's timing and pricing of his BNI acquisition. Maybe there is an urgency for him to get out of the US dollar cash positions ASAP, otherwise there is no good explanation of his bad timing and pricing.

Riding the Rails: Why BNI Was Berkshire's Best Bet - And Vintage Buffett

My comment is Warren Buffet has good big picture view, bad timing and bad pricing. Every one in the world has known for two years that Warren Buffett loves railways. He openly talked about it more than two years ago. So why why he picks a time to pay nearly the higest price? Way over-paid.

If he likes railway, Chinese railways are way much better play. The capacity of China's railways transportation is stretched tot he extreme. Whole America's railway system has excessive capacity that is idled.

If he likes commodity and transportation play, he should be buying coal mines, and he should be buying dry bulk shippers. Both sectors are dirt cheap compare with railways.

seekingalpha.com/autho...

I am afraid Warren Buffett is getting too old to calculate relative valuations correctly. There are so many good under-valued assets around at dirt cheap price. Railway will be the last thing I will pick up. It's going to be good, but just not as good as other things.

Skeptical About Buffett's Big Bet

I agree with Warren Buffet's big bet that the US economy will survive and thrive, and that the dollar is going to collapse, and that commodities are going to be HUGE.

What I can not understand is his timing, and his way over-paying for BNI. It's no secret at all that Warren Buffett loves railways. It's public knowledge for more than 2 years, maybe 3 years. He openly talked about his love of railways. So why now? Why not buy in march while the price was much better?

He definitely way over-paid for this thing. I am sure there are tons of other bullish assets way much cheaper to buy , at much better valuation than BNI. If he likes transportation and thinks America is going to export a lot of coal to China, then he should be buying coal mines and he should be buying dry bulk shipppers. Both are dirt cheap now, way much cheaper than railways.

Warren Buffett didn't lose on the big picture. He lost it completely in his valuation calculation and timing.

seekingalpha.com/autho...

Maybe Peter Schiff's comment on Warren Buffett's move is correct.