Alice Schroeder on Buffett's Burlington Buy

Lots of media buzz about Berkshire Hathaway's proposed purchase of Burlington
Northern Santa Fe. I don't pay as much attention to Warren Buffett's buys and sells as many do. Because while I admire the man enormously, his assets are so huge that much of the investing universe is unavailable to him.

I caught an interview with Peter Schiff on CNBC yesterday afternoon. He says the railroad buy in more a play on commodities than the bullish view pushed by many in the media. I also saw Niall Ferguson on Charlie Rose on PBS last night. He said it would have been better to buy an Australian rail company because they're doing such great business related to China. I like Ferguson, but I'm tempted to not follow the specific investment ideas of economists or economic historians. And I wonder if Aussie RR companies already have their "China plays" priced in.

Bloomberg is running a good piece by Alice Schroeder on the proposed acquisition:

I admire and respect Sokol, but my comfort
with him as chief executive officer is in inverse proportion to
Berkshire’s exposure to financial services. Even brilliant CEOs
often can’t manage such companies. The Burlington acquisition
makes me a lot happier with Buffett’s choice of Sokol.

There are many other motives. Burlington is well-managed.
Railroads are a bet against the U.S. dollar and in favor of
higher energy costs. Railroads are a play on the trade deficit
because this is how we haul all those containers of stuff
imported from Asia. In recent years, they have become somewhat
like electric utilities that earn a respectable return on
capital.

You'll want to read the entire thing. She has some interested things to say about the gigantic stock-split in the B shares with regards to the S&P Index.