Berkshire buying Burlington Northern railroad - Yahoo! Finance

For roughly 34 billion BRK is buying roughly 2 billion profit. Both stocks rising sharply as BRK, with an enterprise value of 167 billion only turned 3 billion profit, trailing twelve months. 2/3's BRK's profits at 1/4th the cost.

Sounds like a good deal for BRK stockholders, Buffett being the biggest.

__________________
Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

rail could be key in energy conservation if it can innovate just a little.

__________________
Socialism doesn't create a rising tide that lifts all boats. It drains the lake and teaches the boat riders not to help themselves by rowing.

Jesus loves you, allah wants you dead

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand

According to the industry, Railroads are 85% more energy efficient than they were in 1980. The average for 2007 was moving one ton 436 miles on one gallon of fuel.
FactCheck.org: Can a freight train really move a ton of freight 436 miles on a gallon of fuel?

As people movers they're grossly inefficient, unless Americans adopt the 3rd world MO of packing them in and having "riders" hang off the sides and sit on the top of cars.

__________________
Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

Rail needs to reclaim previously existing routes, have widely available stops with adequate stations and parking (bike storage?) and folks will use rail more often.

The town i grew up in during my teen years had three trains stops prior to WW2 and had a vibrant local agricultural business. Over the years the rails gave way to cars and the nearest rail is 4 miles out of town and until very recently had hundreds of daily commuters competing for a dozen parking spaces in a lot managed by a pizza shop; the ticket booth was in a private business across the street from the station that wasn't open during all the hours the "station" was in operation.

One stop on the local commuter rail had the ticket booth out of sight from the actual phyiscal stop several hundred feet away on the opposite corner of an unlit park.

For generations American planners have been fighting to keep the train down.

They need to get a little better at freigh short haul. nothing better at freight long haul. Need to move away from trucks as possible.

__________________
Socialism doesn't create a rising tide that lifts all boats. It drains the lake and teaches the boat riders not to help themselves by rowing.

Jesus loves you, allah wants you dead

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand

S&P to downgrade BRK because of the deal:

Standard & Poor's Ratings Services says in a news release today that it has put Berkshire on "CreditWatch with negative implications" in the wake of its announced deal to buy all of Burlington Northern Santa Fe.

Last March, S&P kept its AAA rating on Berkshire, but lowered its outlook to "negative" from "stable" because lower equity prices were hurting the capital holdings of Berkshire's insurance operations.

Fitch took away Berkshire's AAA rating in mid-March, and Moody's did the same in early April.

Today S&P says it may lower Berkshire's rating by one or two notches within 90 days, after it takes a closer look at the company's agreement to buy BNSF.
Buffett's Berkshire Hathaway May Lose Only Remaining AAA Credit Rating - Yahoo! Finance

The good news is the rating services appear to now take their responsibilities more serious, after their derivatives debacles. The bad news, for BRK stockholders is any borrowing in the future will cost their company higher interest rates.

__________________
Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

Nice alliteration.

__________________
"Jesus said: I have cast fire upon the world, and behold I guard it until it is ablaze."
Gospel of Thomas

Thanks. It was difficult saying it into my keyboard, but it turned out okay.

__________________
Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

Thanks for posting this Ted - a major business story.

As part of the plans surrounding the acquisition, Buffett has decided to do a 50-1 stock split, which will allow ordinary investors to purchase Berkshire at a rate that is much lower than the current price:

Berkshire for $65.30 a Share? Giant Plans 50-1 Stock Split - Mergers and Aquisitions * US * News * Story - CNBC.com

Berkshire offers Class A shares and Class B shares. Only the second, Class B, are subject to the split, which will have to be approved by shareholders.

.

Apparently Buffett doesn't think much of stock splits. As a result, the spectacularly successful Berkshire's Class A shares are selling at more than $100,000 a share and are generally bought through mutual funds. This is generally true of the Class B shares - which are still extraordinarily expensive. It will be interesting to see the reception to Berkshire at the lower price.

Steam powered local light rail would be the way to go, but it's too cheap to interest lobbyists and the likes of the Al Gores out there. Gore is already well into his second $100 million peddling 'pollution credits' ... It's hilarious stuff, make up a complete legal fiction, and a total abstraction, and then market it.

__________________
"The real question of life after death isn't whether or not it exists, but even if it does, what problems this really solves." - Ludwig Wittgenstein

"A day without sunshine is, you know, night."- Shannon

Buffet is going to retire pretty soon, so a major pump-and-dump operation in the markets is in the works for his holdings in the near future. Dumping huge amounts of watered stock on a desperate market is the way to go; he hasn't been paying those publicists and working on his 'I'm a good guy! You can trust me!' image for years just for fun. In any case, he isn't going to be around long, so buyer beware. The personality cult surrounding this huckster is literally in the millions, just hoping for a chance to shove their life savings into his pockets.

__________________
"The real question of life after death isn't whether or not it exists, but even if it does, what problems this really solves." - Ludwig Wittgenstein

"A day without sunshine is, you know, night."- Shannon

Dp ........

__________________
"The real question of life after death isn't whether or not it exists, but even if it does, what problems this really solves." - Ludwig Wittgenstein

"A day without sunshine is, you know, night."- Shannon

Buffett's became a billionaire by buying on the dumps and selling on the pumps. But, it wasn't him doing the pump and dumps, just taking advantage of other people's fear and greed.

In full disclosure, I'm not now, nor have I ever been a member of Buffett's "cult", ie, a BRK stockholder.

__________________
Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

There are other ways to improve efficiency besides "packing them in". Regenerative braking, for example, has made great strides in recent years. But you do need to have relatively high ridership to have good efficiency numbers. The biggest challenge is getting Americans out of their cars.

It's pretty much a chicken or the egg thing. Americans aren't going to give up their cars until trains can compete in convenience and costs, and trains aren't going to become convenient until it's profitable.

__________________
Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke