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"When traffic travels by rail, society benefits." -- Warren Buffett - Lindsey Kuper [entries|archive|friends|userinfo]
Lindsey Kuper

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"When traffic travels by rail, society benefits." -- Warren Buffett [May. 6th, 2011|01:33 am]
Lindsey Kuper

Quoting from Warren Buffett's Chairman's Letter in the 2010 Berkshire Hathaway Annual Report:

The highlight of 2010 was our acquisition of Burlington Northern Santa Fe, a purchase that’s working out even better than I expected. It now appears that owning this railroad will increase Berkshire’s “normal” earning power by nearly 40% pre-tax and by well over 30% after-tax. Making this purchase increased our share count by 6% and used $22 billion of cash. Since we’ve quickly replenished the cash, the economics of this transaction have turned out very well.

[...]

[We] are enthusiastic about BNSF’s future because railroads have major cost and environmental advantages over trucking, their main competitor. Last year BNSF moved each ton of freight it carried a record 500 miles on a single gallon of diesel fuel. That’s three times more fuel-efficient than trucking is, which means our railroad owns an important advantage in operating costs. Concurrently, our country gains because of reduced greenhouse emissions and a much smaller need for imported oil. When traffic travels by rail, society benefits.

Over time, the movement of goods in the United States will increase, and BNSF should get its full share of the gain. The railroad will need to invest massively to bring about this growth, but no one is better situated than Berkshire to supply the funds required. However slow the economy, or chaotic the markets, our checks will clear.

Berkshire Hathaway's website, by the way, is pretty much the best corporate website I've ever seen.

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Comments:
[User Picture]From: bubblingbeebles
2011-05-06 12:25 pm (UTC)
oh, the typography around the title even changes in subtle ways among all the sub-pages. a nice touch!

here is another good website.
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[User Picture]From: lindseykuper
2011-05-06 04:19 pm (UTC)
I think you might be misunderstanding how much I genuinely like the Berkshire Hathaway site.
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From: wjl
2011-05-07 02:21 am (UTC)

Best viewed in Lynx 2.0!
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[User Picture]From: mindstalk
2011-05-21 03:58 pm (UTC)
Frigging GEICO gets everywhere, though.
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(Deleted comment)
[User Picture]From: lindseykuper
2011-05-06 04:02 pm (UTC)
I wish! I'm not a shareholder. I'm interested in rail and I think Warren Buffett is pretty cool, but it actually came to my attention because someone was quoting some other part of the report to me, and I stumbled across this part, which I think is more interesting.
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[User Picture]From: tornadogrrrl
2011-05-06 05:29 pm (UTC)
Interesting!
Thanks for sharing.
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[User Picture]From: paul_stansifer
2011-05-07 03:46 pm (UTC)
It gives the overwhelming impression that Berkshire Hathaway consists entirely of Warren Buffet sitting in an office in Nebraska.
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