Buffett's bet on the US economy?

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da loser

Platinum Member
Oct 9, 1999
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http://blogs.wsj.com/deals/2009/11/03/how-big-is-buffetts-railroad-bet/

Warren Buffett calls his $34 billion purchase of the remaining shares of Burlington Northern Santa Fe railroad “a bet a on the U.S. economy.”

i always thought warren's value investing was centered on not determining the macroeconomic picture, but apparently he believes we can't go any lower.

he can't be wrong about something this big, right?

oh, i think warren is right as far as managing the financial community. hands off and tax the beejeebus out of them.

they're going to cheat the system anyway. but you can't cheat the IRS, at least if you make that simpler too.
 
Pepsei

Pepsei

Lifer
Dec 14, 2001
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actually, he's been buying shares of BNSF for years. he's in it to make money.
 
ebaycj

ebaycj

Diamond Member
Mar 9, 2002
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Ausm said:
Depends if it is short term or long term for Capital gains.
Click to expand...

The only one that matters is long-term cap gains, because short-term cap gains are taxed at the same rate as income. "Capital Gains" = Long-Term Capital Gains, for all intents and purposes.
 
glenn1

glenn1

Lifer
Sep 6, 2000
25,383
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da loser said:
http://blogs.wsj.com/deals/2009/11/03/how-big-is-buffetts-railroad-bet/

Warren Buffett calls his $34 billion purchase of the remaining shares of Burlington Northern Santa Fe railroad “a bet a on the U.S. economy.”

i always thought warren's value investing was centered on not determining the macroeconomic picture, but apparently he believes we can't go any lower.

he can't be wrong about something this big, right?
Click to expand...

Sure he could be wrong, and likely is. Buffet is handicapped by size, just like many big mutual funds. Because Buffet needs to put massive amounts of money to work at a time, he can't time the market very well, and is forced into investing in sectors and companies that can handle an investment of a few hundred millions or even billions. If he were buying a couple hundred shares instead of the whole company, I doubt that Buffet would have pulled the trigger on BNI at this time.
 
Ozoned

Ozoned

Diamond Member
Mar 22, 2004
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Bnsf's main source of income comes from moving coal out of the powder river basin to coal fired power plants.

I think this is simply a hedge for his G.E. investment, you know, the new green G.E.

That or he has a fetish for the railroads.
 
L

LegendKiller

Lifer
Mar 5, 2001
18,256
68
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glenn1 said:
Sure he could be wrong, and likely is. Buffet is handicapped by size, just like many big mutual funds. Because Buffet needs to put massive amounts of money to work at a time, he can't time the market very well, and is forced into investing in sectors and companies that can handle an investment of a few hundred millions or even billions. If he were buying a couple hundred shares instead of the whole company, I doubt that Buffet would have pulled the trigger on BNI at this time.
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He's never been a market timer and has always claimed trying to time the market is impossible. He knows when intrinsic value is at, or under, the price paid. That value may be greater in 5 or 10 months, but trying to time is impossible, for example, the Goldman Sachs investment.
 
Patranus

Patranus

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Apr 15, 2007
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Ozoned said:
Bnsf's main source of income comes from moving coal out of the powder river basin to coal fired power plants.
Click to expand...

I guess he is betting Cap & Tax isn't going to pass.
After all, Obama did say that he would "bankrupt" anyone who wanted to build a coal power plant and also cause power prices to "necessarily skyrocket".
 
C

charrison

Lifer
Oct 13, 1999
17,033
1
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Patranus said:
I guess he is betting Cap & Tax isn't going to pass.
After all, Obama did say that he would "bankrupt" anyone who wanted to build a coal power plant and also cause power prices to "necessarily skyrocket".
Click to expand...

IF cap and tax passes, railroads will be a good investment. They use little energy to transport cargo relative to trucks.
 
Ozoned

Ozoned

Diamond Member
Mar 22, 2004
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CADsortaGUY said:
True, but coal accounts for over 20% of rail revenue from what I remember reading. Rail can't handle a 20% hit.
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The current usage of coal won't go down in any cap and tax scheme. The growth might be curbed. I mean really, what could you possibly replace it with in the next 10 years? I think it takes longer than that to get a permit approved for a nuclear power plant.

The R.R. Buffet bought, and the one that is bigger (UP) have already taken a 20% hit with Obama's recession, and came through it ok. They will adapt.
 
D

dmcowen674

No Lifer
Oct 13, 1999
54,889
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www.alienbabeltech.com
He's betting on oil going to $300 and Diesel well over $10 a gallon killing the Trucking Industry permanently.

Same for the Auto Industry. A lot of people will be abandoning cars.
 
Jaskalas

Jaskalas

Lifer
Jun 23, 2004
35,542
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dmcowen674 said:
He's betting on oil going to $300 and Diesel well over $10 a gallon killing the Trucking Industry permanently.

Same for the Auto Industry. A lot of people will be abandoning cars.
Click to expand...

If we lost both trucking and personal vehicles then you wouldn’t need railroad stock, you’d need guns and some farmland. As I suspect such a scenario would be a complete collapse with significant starvation.
 
L

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
dmcowen674 said:
He's betting on oil going to $300 and Diesel well over $10 a gallon killing the Trucking Industry permanently.

Same for the Auto Industry. A lot of people will be abandoning cars.
Click to expand...

LOL, back to your ridiculous predictions again?

Good to know that now you think you're just as smart as Warren Buffet. Tell me, what school did you go to? How many failed businesses have you run? How many billions are you not worth?

What's funny is that all of this "knowledge" you have and you still can't do any better than internet prognostications that are 100% wrong.
 
D

dmcowen674

No Lifer
Oct 13, 1999
54,889
47
91
www.alienbabeltech.com
Jaskalas said:
If we lost both trucking and personal vehicles then you wouldn’t need railroad stock, you’d need guns and some farmland.


As I suspect such a scenario would be a complete collapse with significant starvation.
Click to expand...

and that is exactly what is starting to happen in many areas.

There has been a record run on gun and ammo purchases and a lot of land that has previously not been farmed under the Do Not Farm Bill and get paid not to farm are getting plantings despite high inventories of grain etc.

The food pantries are running empty. I would not be surprised to see many reports of homeless starving and freezing to death this winter that are people homeless for the first time in this collapse.

It's happening before your eyes but the Republican partisan hacks continue to turn a blind eye as evidenced in here.
 
P

Pocatello

Diamond Member
Oct 11, 1999
9,754
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dmcowen674 said:
and that is exactly what is starting to happen in many areas.

There has been a record run on gun and ammo purchases and a lot of land that has previously not been farmed under the Do Not Farm Bill and get paid not to farm are getting plantings despite high inventories of grain etc.

The food pantries are running empty. I would not be surprised to see many reports of homeless starving and freezing to death this winter that are people homeless for the first time in this collapse.

It's happening before your eyes but the Republican partisan hacks continue to turn a blind eye as evidenced in here.
Click to expand...

Don't worry, President Obama and the Democrats will take care of every thing. They have full control of Congress and the White House.
 
IndyColtsFan

IndyColtsFan

Lifer
Sep 22, 2007
33,655
687
126
dmcowen674 said:
He's betting on oil going to $300 and Diesel well over $10 a gallon killing the Trucking Industry permanently.

Same for the Auto Industry. A lot of people will be abandoning cars.
Click to expand...

No, you're the buffoon "betting" on $10/gallon gas and have been spouting this same nonsense for years now.
 
Last edited:
First

First

Lifer
Jun 3, 2002
10,518
271
136
dmcowen674 said:
He's betting on oil going to $300 and Diesel well over $10 a gallon killing the Trucking Industry permanently.

Same for the Auto Industry. A lot of people will be abandoning cars.
Click to expand...

You must really hate yourself to keep posting things you know are wrong. You are a true loser.
 
Gardener

Gardener

Senior member
Nov 22, 1999
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136
Read a commentary that the purchase of the railroad was because America's economic recovery will be dependent on exporting raw materials. The classic 3rd world economic model.
 
First

First

Lifer
Jun 3, 2002
10,518
271
136
^ LK, ideologues aren't going to change their mind no matter how many times their guys are consistently wrong about policy, history, economics, etc. Dude can't hang with anyone that actually finished school.
 
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