Warren Buffet Clashes with Dow Theory

Berkshire Hathaway (BRK.A; BRK.B) aka Warren Buffet just swallowed Burlington Northern Santa Fe (BNI). The largest deal ever made by the oracle from Omaha may actually signal some very difficult times for North America’s economy. Follow this reasoning.

Dow Theory requires the transports to confirm the main industrial average. The rationale is that if America is not shipping therefore how could the industrials be doing well.

Warren Buffet only swings when he sees a big fat pitch. He is also a long term investor. He just bought big into a major transport. He only buys deep value. Therefore the Dow Transports are not confirming the rise in value of the Dow Industrials. At least not for now.

Sure we all believe in America. But what time frames are you working with?