At 78 years old Warren Buffet is still playing with CHOO CHOO TRAINS, but their no longer the Lionel Trains from childhood day's. Looks like the Oracle of Omaha is amassing a large position in his favorite railroad company Burlington Northern Santa Fe(BNI). Buffett has been acquiring a position in this company since early 2007 and buying it on dips in the $70-80 range. He has also used the tactic of selling puts on the stock which pays him similar to getting a dividend. If the stock hits his strike price the stock is put to him . If the stock never hits his strike price he pockets the option premium. Earlier in the year the stock almost hit $115 per share but has fallen back with the over all market. Here is a link to Berkshire Hathaway's(BRKA,BRKB) current filing.
also be sure and check the link to Gurufocus:
I recently picked up shares of Union Pacific.
ReplyDeleteI am curious why Buffett prefers BNI..They have an almost identical market cap, and most ratios, except BNI has a lower estimated F P/E and a better return on average equity. Since their railroad lines in the southwest and west are almost identical, I wonder what you may think Buffett sees as BNI's advantage?
I believe BNI has larger and direct exposure into China market, they also have some canadian provinces plus 5 extra states which run into the southeast. Plus I think they handle more coal. Both look similar in numbers, but Warren obviously see's something in BNI
ReplyDeleteInteresting, that makes sense. Thanks.
ReplyDeleteI may want to pick up a few shares myself. After a recent trip to Italy, I find it puzzling why the US has completely abandoned the rail system for consumer travel and allowed the auto industry to destroy the mass transit systems in this country. Well, I guess some of the greed has finally caught up with them after 60 years. And unfornutely its probably going to take $8/ gallon or more prices to cause any changes.
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