long_on_oil

Has Buffett Lost His Mind?

Justifying a purchase you want is easy, it's human nature. Have you ever purchased a new car? There is no justification of buying a new car over a good used one when it comes to costs but we do it anyway. We enjoy eating depreciation expense.
I am a long time owner of BRK and the purchase of BNI is not upsetting to me. What upsets me is that BRK can't keep up with the market during this latest recovery and Buffet refuses to pay a dividend. He once said that if he could not find a way to make a decent return on cash then he would start paying dividends and let the stockholders try their hand. Well, IMO that time has come.

Intrinsic Value and Warren Buffett's BNSF Purchase

BNI management knows they are being acquired by a hands off owner so that is appealing to them. I love reading these Buffet articles where everyone is a mind reader. You can bet one thing and that is Buffet knows exactly what the intrinsic value is and he will not overpay for the acquisition.
We owners of BRK know this, that is why we own BRK in the first place. We have not kept BRK the past 2 years for the capital gains, that is for sure. If you were to put BNI together today you can bet it would cost way more than $200 a share. Heck, you couldn't purchase 32,000 miles of right of way and lay the tracks for that.

Berkshire + Burlington = Hypocrisy, Expediency and Full Dose of Ego?

If you don't like the TV show turn the channel. If you don't like Buffets decision then sell your shares. The way I see it he is giving 15% of Berkshire to increase earnings 40%. He not only gets rid of cheap dollars, he buys a great company with a greater future. BNI earnings based on 1.55 million outstanding BRK shares = $1200 per share. BRK's last 4 quarters earnings=$2935 per share based on yahoo earnings info.
Probably way to simplistic.

Buffett's Big Rail Buy: What It Means for Berkshire Shareholders

Peak oil will force us "back to the future". Most of us will not be alive, but eventually the decline in oil will force trucks off the road and we will be using more rail. The old spurs will once again reemerge and small towns will have trains coming and going. Every Wal Mart will have a spur and most of the trucks going to small towns will disappear. We will be forced to move goods the cheapest way possible and that will be rail
Instead of getting our orders the next day we will have to wait until the next train comes to town.
This is a brilliant move by an old timer that sees the future but will not be around to live it.

Buffett Buys Burlington, Does 50-1 Split at Berkshire

Allowing small investors the ability to purchase BRK shares is a great move. If you are funding a 401k or IRA you will now be able to purchase several shares of BRKB per month rather than having to save your money just to buy one share. I see no negative to this move.
Its not like Wal Mart where the shares are so diluted that the price hasn't moved in 10 years. This move will propel BRKBs to a $5,000 equivalent which is $100 post split. I have owned BRK for some time now and I am elated.
However, I do feel this should be the last split because this sets the stage for market saturation and dilution and that is not good for the shareholders.

On Buffett-Back Riding

The GE pick was brilliant because of the products the company makes. GE has to have a financial arm if it wants to sell multi million dollar products like train engines, aircraft engines, nuclear reactors, cat scan machines and on and on. There is no way the Government is going to let GE fail, we are all to dependent on products they make.
When Warren locked in a 10% return the market was in the tank and most of us would have killed for a 10% return. I own BRK and as long as I am alive I will continue to own it because I am not smart enough to second guess Buffet. I subscribe to the old saying, "if you can't beat em, join em."

Burlington Northern Santa Fe: What's Buffett's Strategy?

It is not hard to figure out why Buffet is buying up BNI or any rail road for that matter. What is the cheapest way to move goods long distance...rail. We have already seen how the rail business picked up during the last jump in fuel prices. Well, in the future that will be the norm.
In the future, in order to save energy we will be using more and more rail. Buffet will never see the day when rail makes a gigantic comeback but our kids, kids will.
In the future rail will make a comeback to every small town, just as it once was.
Heck, every Wal Mart will have rail right up to the back door.
Warren's heirs will be saying, damn, he really was ahead of his time.

Let Warren Buffett Handle Your Portfolio

You could buy what Buffet buys but the secret to Buffets returns is the sell and you would always be to late on that side. The average investor knows nothing about options so that is not an option. So, the best option is to just buy brk-b shares, and forget about looking at your monthly statement.
Buffets 2007 annual report had a section about the 100 year return of the market from 1900 thru 1999 and it was only 5% so if Buffet makes you 5.5% he is beating the market by 10% a year and that is damn good.
There are only a handful of investors that have a 50 year track record that can even come close to Buffets. I'll trust him with my little nest egg and I won't lose any sleep over it.