Warren E. Buffett’s investments in railroads are relatively recent. In fact it was not till 2006 that Mr. Buffett’s holding company, Berkshire Hathaway, began building a stake in the industry. Despite the economic downturn, Mr. Buffett continued to build his position in many of the major railroads in the United States – concentrating most of his investment in Burlington Northern Santa Fe, which he agreed to acquired fully on Tuesday for $26 billion in cash and stock.
But when he began snapping up railroad stocks in 2006, Burlington Northern was not his No. 1 investment in the industry. At the end of the third quarter of 2006, Mr. Buffett held $73 million worth of Burlington stock. His investment in Norfolk Southern was about twice that at $141 million and his investment in Union Pacific was $277 million.
In the fourth quarter of 2006, the choice was made to bet big on Burlington Northern. By the end of the quarter, Mr. Buffett had nearly $1.2 billion in Burlington stock, compared with nearly $200 million in Norfolk Southern and $755 million in Union Pacific.
That trend would continue in the coming months and by April 5, 2007, the first time Mr. Buffett disclosed that he was betting on the railroads, he had acquired an 11 percent stake in Burlington worth $3.23 billion.But Mr. Buffett did not stop there and quietly built up his position in Burlington. By October 2007, he controlled 61 million shares equivalent to 17.2 percent of the company. Meanwhile, his investments on the other railroads increased only slightly. ...MORE
Tuesday, November 3, 2009
Buffett’s Record of Buying Railroad Stocks (BRK.A; BNI; UNP)
DealBook seems to be having fun with theis story. The post immediately below, "Despite Buffett Bid, More Rail Deals Seem Unlikely (BRK.A; BNI; CNI; CSX; NSX: UNP)" also links to them.