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216 comments on DrumBeat: April 9, 2007

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Darwinian on April 9, 2007 - 9:32am Permalink | Subthread | Comments top

Warren Buffett knows

Just heard on CNBC that Warren Buffett's Berkshire Hathaway is buyint a 10% stake in three different railroads. Burlington Northern was one of them and the other two is still a mystery. All railroads are up this morning on the news.

It would be pure speculation of course but it just may be that Buffett realizes that peak oil is upon us and he realizes that moving stuff by rail is far more economical than moving the same stuff by truck.

Ron Patterson

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tate423 on April 9, 2007 - 9:53am Permalink | Subthread | Parent | Comments top

Whats scary is his record of being right. I think we should all take note. He has made more money betting on more changes than anyone. Bill monopolized one thing. I work at UPRR and it would be stupid to ignore them. If you want to move anything west you have the UP and BNSF and UP controls nearly 2/3 of the lines, so who has the sustainable competetive advantage that Buffet touts in his philosophy?

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Dragonfly41 on April 9, 2007 - 10:35am Permalink | Subthread | Parent | Comments top

I wonder if Buffet and Simmons ever have converstations together about all this stuff?

I would not be surprised if they did.

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airdale on April 9, 2007 - 12:01pm Permalink | Subthread | Parent | Comments top

tate,

I used to do a lot of work at Missouri Pacific. Later I think UP brought it up. MoPac was one fine hellva railroad.They wrote some very very good code. I started there when paper tape and teletypes were the normal communications tools.
Took forever to get a 'consist' in.

On 12th and Olive(maybe Locust) in Downtown St. Louis.

Spent many a nite up on Dago Hill drinking like fish with the programmers from MoPac.

UP was based in Omaha? No?

Do you work in Clayton?

Airdale

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dinopello on April 9, 2007 - 10:34am Permalink | Subthread | Parent | Comments top

I guess Warren finally read my posts :). Railroads are so obviously the place to be. Although you do have to be a bit of an optimist that some commerce and normalcy will continue post-peak and then moving to rail makes energy sense for goods movement - not to mention the coal shipments that have been increasing. Good news that Buffet is in, I think he is a class act.

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dbarberic on April 9, 2007 - 10:39am Permalink | Subthread | Parent | Comments top

I don't think it is a bet on 'peak oil', rather it is a bet on increased coal consumption.

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Greg Hunter on April 9, 2007 - 11:06am Permalink | Subthread | Parent | Comments top

Warren owns many things and he appears to be diversifying properly as owns Mid American Energy which is

MidAmerican Energy Holdings Co., a unit of Buffett's Omaha, Nebraska-based Berkshire Hathaway Inc., plans to start building in Iowa the world's biggest wind farm as soon as this year. The $323 million project, on leased farmland, calls for generating as much as 310 megawatts from as many as 200 wind turbines.

However Berkshire also owns NetJets which implies that he gets the nuance of the energy business. The middle class will not fly anymore, but we will get heat and rail, while the elite will still "need" to fly to ensure that the profits are maximized and so deals can be done.

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