Old 11-03-2009, 05:13 PM   #1
jnohallman
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Default Warren Buffet buying BNSF

So, what impact will this have on the railroad and the industry?

http://news.yahoo.com/s/ap/20091103/...VmZmV0dHNiZXJr

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Old 11-03-2009, 06:07 PM   #2
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It has caused short term trader interest in other carriers (traders presumably think there will be other mergers / acquisitions). To BNSF it will allow the company to make long term strategic plans without shareholder pressure (e.g., large investment groups demanding dividends and continuously high stock prices).

Berkshire has a long history of purchasing successful companies and letting them continue to run their businesses. Think Geico, Sees Candy and others.
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Old 11-03-2009, 10:20 PM   #3
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So the railroad locomotives, operating procedures and other characteristics will stay the same, just a new owner?

Check out this link as well:
http://www.railroad.net/forums/viewt...p?f=49&t=66461
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Old 11-04-2009, 04:08 AM   #4
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I'm not making a huge thing about it even if he is from New Zealand. Our local Media are making a "song & dance" about it, but what Media don't.

Here is more info about it.
http://tvnz.co.nz/business-news/buff...rchase-3111377
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Old 11-04-2009, 12:21 PM   #5
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Quote:
Originally Posted by chuckman View Post
So the railroad locomotives, operating procedures and other characteristics will stay the same, just a new owner?
There shouldn't be many outward changes; e.g., changes in staff, locomotive schemes, etc.

However, Berkshire also owns a utility company who is a member of CURE (advocacy group that wants to see new financial regulations imposed on the industry). Perhaps that utility might have a change of heart now.

The industry has continued to spend capital on improving track / equipment. When the traffic does come back, it will be easy to add capacity at far less cost than the increased revenues. Coal will be challenged by environmental concerns but because it provides more than 50% of the US' electrical power, it will be around for awhile.

Matt Rose is properly being recognized as an effective executive - some blogs are speculating he will take over when Buffett retires, but one must not forget that Rob Krebs laid the foundation for the current success. "Wall Street" criticized him for spending scarce capital to develop the huge Willow Springs intermodal facility near Chicago because it lowered earnings per share. BNSF soon will be free of such short-sighted thinking.

Last edited by J; 11-04-2009 at 12:23 PM.
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Old 11-05-2009, 04:59 PM   #6
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Don't y'all find it ironic that he is the "Oracle of Omaha?" He should'a bought UP.

BNSF now stands for "Buffett's New Speedy Freight."
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