Grouper

Has Buffett Lost His Mind?

At first, I thought the deal didn't make sense, but then I decided I like it. Here is why:
1. Absolutely no way to re-create the right of way system, today or ever, at the price he just paid for the operating company.
2. Our friends in Washington are going to tax the heck out of fuel, increasing rails freight advantage, but more importantly, finally creating demand for passenger rail (which will of course be funded by our tax dollars).
3. What will be the logical place to put passenger rail? Sure, in existing freight ROW, which, of course, we tax payers will buy or lease from BNI.
4. Where will we logically develop higher density urban villages? In and around existing ROW.
5. Obama has big bucks flopping around for "High Speed Rail". What are the odds some of that money ends up buying or leasing BNI ROW? In case you haven't noticed, WB is a big BO supporter - why not, BO bailed him out of the too early investment in GE and GS (both of whom benefitted from the AIG bailout, TARP, TALF, or whatever).
6. High Speed rail requires local commitment to regional systems......
7. All of the above will be funded by fuel taxes....

Does GS Recapitalization Indicate It's Time to Invest?

It is a good time to buy if you got Buffet's deal. You and I can't, unless we buy Berkshire. Look at his deal: 10% Preferred, plus immediately in the money warrants: worth 500 million at time of issue, $1B after the market reacted 10%. As soon as you can get that deal from the company that performed best on a relative basis through the current disaster, you should take it, if you can hold for 5 to 10 years. Unfortunately, you can't get that deal.