Because of this, “operators prefer to use pipelines and use rail only as a backup.”. It looked to us like an oil play. Since then, Buffett’s railroad stock investment is paying off nicely. Buffett besaß 2009 28,5 % der Anteile von Berkshire Hathaway, entsprechend einem damaligen Kurswert von 36 Mrd. But he was waiting for a big opportunity, not sure when, why or how that opportunity would arrive.It takes incredible discipline to sit and wait. If you build the increase in the price of diesel fuel into the post-2003 experience, when revenues suddenly start to grow, what you see is that the entire growth of the revenue is accounted for by the energy advantage that the railroads have and therefore how much business they can capture from the truckers, and how much pricing they can get because the competition is now more expensive. We looked at Burlington Northern at $75 and I’ll give you the exact calculation we did. Ever since the first quarter of 2007, Warren Buffett’s Bershire Hathaway (NYSE:BRK.A) has been buying into Burlington Northern Santa Fe Corp. (BNI). former Burlington - Rock Island Railroad In 1970, it merged with the Northern Pacific Railway and Great Northern to form the Burlington Northern Railroad The Burlington Northern Railroad Co. v. Woods, 480 U.S. 1 1987 was a United States Supreme Court case that applied the precedent of Hanna v. Plumer to a Burlington Northern Depot or Burlington Northern … There is nothing special about the railroads. Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Warren Buffett's Berkshire Hathaway said Tuesday it will buy railroad operator Burlington Northern Santa Fe for $44 billion. Or, if you are the investor Warren E. Buffett, … Warren Buffett to buy Burlington Northern Santa Fe Corp. Marketing Strategy. In short, rail infrastructures cannot compete with existing pipelines to transport oil at the rate the United States does. Der legendäre US-Investor Warren Buffett besorgt sich das nötige Geld für seine bislang größte Übernahme: Um den Kauf der Eisenbahn-Gesellschaft Burlington Northern Santa Fe stemmen zu können, leiht er sich acht Mrd. Rail shipments from North Dakota have surged from fewer than 100,000 barrels a day in 2010 to 800,000 barrels a day last … It also explains why one is a professor - a smart one though - and the other the world's greatest investor. This is false, as most of the oil that would have made use of the Keystone XL will likely travel through existing and new pipelines. So they are under-depreciating, and their profit numbers are lower than the true profit numbers – and in a bad way, because the tax shield for the depreciation is undergone too. Warren Buffett has been a winner in the Keystone XL impasse. At $100/share we think he has lost his mind." They are paying 18 times earnings, but it’s really much worse than that. Warren Buffett's Latest Big Bet: Verizon Communications, Earn affiliate commissions by embedding GuruFocus Charts. Dollar am Kapitalmarkt. A DIY Guide on How to Invest Using Guru Strategies. GuruFocus has detected 6 Warning Signs with Berkshire Hathaway Inc BRK.A. The Burlington Northern Santa Fe (BNSF) Railway Company (reporting mark BNSF) is the largest freight railroad network in North America.One of seven North American Class I railroads, BNSF has 41,000 employees, 32,500 miles (52,300 km) of track in 28 states, and more than 8,000 locomotives. There are the rights-of-way, which you can’t get rid of. 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Most of the oil that would have been transported by the now-cancelled Keystone XL Pipeline will likely use existing and new pipeline infrastructure, not railways. The Burlington Northern Santa Fe (BNSF) Railway Company (reporting mark BNSF) is the largest freight railroad network in North America.One of seven North American Class I railroads, BNSF has 41,000 employees, 32,500 miles (52,300 km) of track in 28 states, and more than 8,000 locomotives. Warren Buffett is spending $34bn on the Texas-based Burlington Northern Santa Fe railway. Correction Feb. 3, 2021: Removing reference to Energy Information Administration / Department of Energy in paragraph 15, the data is from BTS. In a huge vote of confidence in the recovering U.S. economy, Warren Buffett's Berkshire Hathaway Inc. on Tuesday agreed to buy Burlington Northern Santa Fe Corp., which runs the nation's All Rights Reserved. Someone should write a book/article to explain the rationality behind every one of them and point out what we learn from that one investment. He has a history of making bad oil play decisions. BNSF people are from all areas of the country and have a variety of skills. On January 23, Bloomberg News reported Warren Buffett's Burlington Northern Santa Fe Railway (BNSF), owned by his lucrative holding company Berkshire Hathaway, stands to benefit greatly from President Barack Obama’s recent cancellation of the Keystone XL pipeline. here ). In his annual letter to shareholders, Buffett calls attention to the railroad company's struggles with late shipments. You are correct, $44 billion was the total cost (includes the shares he already owned and the debt assumed). BNSF is focused on keeping the railroad moving forward, meeting customers' needs and serving the communities where our employees live and work. MOST U.S. OIL IMPORTS FROM CANADA USE PIPELINES, NOT RAILWAYS. Burlington Northern Santa Fe, LLC is the parent company of the BNSF Railway (formerly the Burlington Northern and Santa Fe Railway). LEARN MORE Our Railroad. Buffett's Berkshire Hathaway has agreed to buy Burlington Northern Santa Fe in a deal valuing the railroad at $34 billion. For 2005, 2006 and 2007 I watched as Buffett sat with tens of billions of dollars on the Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) balance sheet earning virtually nothing. As per Reuters reports and industry experts, the Keystone XL Pipeline’s cancellation does not appear to mean a lucrative jump in business for crude-by-rail that might benefit Berkshire Hathaway’s BNSF railway. Now I have to say, before you go out in public and suggest that Buffett has lost his mind, a person should maybe consider that perhaps he or she simply isn't smart enough to understand what Buffett is doing.Because as it turns out, Buffett had not lost his mind. Please Sign Up or Log In first. ... including Burlington Northern. ... Burlington Northern Santa Fe (BNSF) recently said it would proceed with plans to increase speeds for oil-by-rail unit trains in Devil’s Lake, N.D. to 60 MPH from 30 MPH, despite opposition from local officials. “We admire Warren’s leadership philosophy supporting long-term Nach einer aktuellen Meldung vom 31. Warren Buffett's company recently discovered it owns two short-line railroads that it must sell because of its 2010 acquisition of the Burlington Northern Santa Fe … a-afx NEW YORK. Warren Buffett would lose billions in transport fees if the pipeline is completed. Currently, Mr. Buffett is Chairman & Chief Executive Officer of Berkshire Hathaway, Inc. and Chairman & Chief Executive Officer at Berkshire Hathaway Assurance Corp., Chairman & Chief Executive Officer of General Reinsurance AG, Chairman & Chief Executive Officer of … OpenSecrets.org by the Center for Responsive Politics, a non-profit and nonpartisan research group based in Washington, D.C. focusing on government transparency and tracking money in politics, lists Warren Buffett’s political contributions  here . Nachdem Buffetts Investmentholding Berkshire Hathaway bereits im Frühjahr einen ersten Anteil an der zweitgrößten US-Eisenbahngesellschaft Burlington Northern Santa Fe erworben hat, baute Warren Buffett sein Engagement über den Sommer weiter aus.. Valueinvesting.de, 09. The major player when I was up there was Burlington Northern Santa Fe (BNSF), now indirect, wholly owned subsidiary of Berkshire Hathaway, controlled by Warren Buffett.. Buffett / Biden international politics phone call Buffett's Berkshire Hathaway has agreed to buy Burlington Northern Santa Fe in a deal valuing the railroad at $34 billion. In my view the BNSF deal nicely illustrates how Buffett and Munger with their wide circle of competence across many industries view long term trends (in this case the shifts in transportation due to the energy challenge ahead of the US) as one form of a company having a sustainable moat. I remember very vividly watching him on CNBC in mid 2007 where he said he thought a recession was unlikely. A historic look (1982-2018) at the transportation prevalence of pipelines, marine vessels, rail and truck for oil transport is visible   here  . Executive Order shutting down the Keystone pipeline will seem to divert a large percentage of crude shipping back to rail. Warren Buffett donated 58 million to Biden campaign. Warren Edward Buffett is an American businessperson who has been at the helm of 6 different companies. Maps of the Keystone Pipeline System and Keystone XL Pipeline show its route: they Keystone XL would have created a “shortcut” in transporting oil from Alberta to Nebraska, while the existing Keystone Pipeline System connects the Canadian source to multiple U.S. states ( here ). All quotes delayed a minimum of 15 minutes. Warren Buffett’s ‘elephant-gun’ purchase of the Burlington Northern Santa Fe, LLC (NYSE:BNI) railroad for $34 billion in 2010 was impeccably timed (coming as it did a year off the 2008-2009 financial crisis) and a huge bet on the revival of the US economy. Warren Edward Buffett is an American businessperson who has been at the helm of 6 different companies. By “Keystone pipeline”, the posts are referring to the Keystone XL Pipeline, a project cancelled by Biden on his first day in office on Jan. 21, 2021, dealing a death blow to a long-gestating project that would have carried 830,000 barrels per day of heavy oil-sands crude from Alberta to Nebraska. There is a simple calculation you can do, which compares the cost-per-ton-mile for freight for a truck versus a railroad. Fundamental company data provided by Morningstar, updated daily. Or another way to think about it is that Berkshire had an earnings yield of 7.7% in 2012 on its original purchase price ($3.372 billion / $44 billion).That is a pretty good return on $44 billion, which is a little harder to invest at high rates of return than a few thousand dollars here and a few thousand dollars there. The company is an indirect, wholly owned subsidiary of Berkshire Hathaway, which is controlled by investor Warren Buffett. Canada is the primary supplier of foreign oil to the United States. His company, Berkshire Hathaway, purchased Burlington Northern Santa Fe for $34 billion four years ago. And that was at $75/share, we thought there were better oil plays. So there’s no issue about having to earn a return on them because you have to keep it in the business, and because there’s nothing they can do with those rights-of-way. Again as with the banks the year before, Buffett wasn’t investing in company fundamentals as much as he was investing in … Mr. Buffett’s Berkshire Hathaway Inc. owns Burlington Northern Santa Fe LLC, which is among the railroads that would transport oil produced in western Canada if … Das Geschäft hat ein Gesamtvolumen von 44 Milliarden Dollar. If you think the man has lost his touch, think again. This article was produced by the Reuters Fact Check team. Business Insider ( here ) also reported on Buffett not donating to Biden during this election after having donated to Hillary Clinton and Barack Obama in past elections. Days after U.S. President Joe Biden cancelled construction plans for the Keystone XL Pipeline - meant to carry oil from Canada’s Alberta province to Nebraska - posts on social media alleged this move was due to Warren Buffett’s extensive political donations to Biden’s campaign. Buffett’s Berkshire Hathaway bought Burlington Northern Santa Fe in the depths of the Great Recession. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The same thing happened recently. Dave Smallen, director of public affairs at the Bureau of Transportation Statistics, sent Reuters estimates for 2020 calculating that of the oil coming from Canada to the United States, 74.4% used pipelines compared to 3% using rail. It was his biggest acquisition ever. It notes that “the impacts of a [Keystone XL] cancelation are muted over the medium-term in large extent due to two other pipeline projects just around the corner (Enbridge Line 3 Replacement (L3R) and the TransMountain Expansion project (TMX).” These pipelines “will likely take rail volumes down to any contractual minimums until 2030.”. Wichtigstes Tochterunternehmen ist die Eisenbahngesellschaft BNSF Railway. If you look at the asset value of the non-right-of-way equipment, and you write it up because it’s more expensive than it was originally, you get an asset value that’s very close to the earnings power value. Conversely, Warren Buffett is sort of considered America’s Uncle. It’s not an environmental issue, it is a money issue…”. The posts say Buffett’s railroad “is now transporting all that oil” following the Keystone XL Pipeline’s cancellation. Could Berkshire Already Own a Stake in Buffett's Next Deal? Buffett’s paying 18-times [at $100/share] and at $75 he was paying 16-times. They report maintenance cap-ex very carefully. Warren Buffett und Barack Obama im Weißen Haus, Juli 2011. In late 2009 (incidentally, the year Obama took office) Berkshire Hathaway took full ownership of the Burlington Northern Santa Fe Railway Company in a $44-billion deal. Anlagegrundsätze. NEW YORK (MarketWatch) — Berkshire Hathaway Inc. said Tuesday it agreed to buy railroad operator Burlington Northern Santa Fe Corp. in a $44 billion deal that Chairman Warren Buffett called “an all-in wager” on the U.S. economy. You can learn a lot on every successful investment that Buffett made. As far as I know did Buffett pay closer to 44 bln for BNSF? The gurus listed in this website are not affiliated with GuruFocus.com, LLC. $26 billion was the cost for the equity Buffett didn't already own. US-Dollar. The company is an indirect, wholly owned subsidiary of Berkshire Hathaway, which is controlled by investor Warren Buffett. It has three transcontinental routes that provide rail connections between … Warren Buffett made the biggest bet of his career, agreeing to buy Burlington Northern Santa Fe Corp. in a $26.3 billion deal that reflects his … He files all filing requirements for political contributions and made no contribution to any PAC.”. We didn’t see a lot franchise value or hidden asset value. Mit dem Deal setzt Buffett … As a bit of history, Buffett purchased BNSF in a $44 billion deal in 2009. CNN has reported that Warren Buffett’s company, Berkshire Hathaway, will buy railroad corporation Burlington Northern Sante Fe ("BNSF") for $44 billion.. Berkshire (BRKA, Fortune 500), which already has major stake in Burlington Northern, said it would acquire the remaining 77.4% of the company in a cash-and-stock offer worth $100 per share.The deal, … CNN has reported that Warren Buffett’s company, Berkshire Hathaway, will buy railroad corporation Burlington Northern Sante Fe ("BNSF") for $44 billion.. Berkshire (BRKA, Fortune 500), which already has major stake in Burlington Northern, said it would acquire the remaining 77.4% of the company in a cash-and-stock offer worth $100 per share.The deal, which would … It’s entirely an energy play. Das Unternehmen gehört zum Berkshire Hathaway-Konzern von Warren Buffett. A map of the Keystone XL’s route alongside the existing Keystone Pipeline System, operating since 2010, can be seen  here   . $ nicht einzeln auf, da wir damit fortfahren werden sie zu kaufen. Just minutes after this morning's announcement that Berkshire Hathaway is paying $26 billion to acquire the 77 percent of Warren Buffett Couldn't Have Imagined the Success of This Purchase When Berkshire Hathaway bought Burlington Northern Santa Fe… Buffett and Munger often mention how their biggest advantage is that they don’t have to worry about catering to Wall Street and their complete focus can be on running Berkshire as a business. Cahill told Reuters that after the cancellation, “other pipelines will come online and crude exports by rail will continue to be a last resort.”, The North American Upstream team at energy consultants Wood Mackenzie sent Reuters findings from the company’s North American Crude Market Service report which agreed with this prediction. Buffett is the chairman and CEO of Berkshire Hathaway, a multinational conglomerate that acquired Burlington Northern Santa Fe Corp (BNSF) in … The first claim in these posts is that Warren Buffett, the American business tycoon and billionaire, donated $58 million to Joe Biden’s 2020 campaign. We looked back at when they did the merger with Santa Fe, because then they did increase margins. Photograph: Nati Harnik/AP. The American Express salad oil scandal, the Sees Candy, National Indemnity, Blue chips stamp, Geico, Coca-Cola, Wells Fargo I & Wells Fargo II, BAC+GS+GE prefered... And now NSF & IBM. They report depreciation and amortization, and they report only about 70% of the maintenance cap-ex. BNSF essentially invented the business of carrying crude oil by rail when it launched its first long oil train in 2009. Warren Buffett Explains Why He Purchased Burlington Northern Santa Fe Railroad April 02, 2013 | About: BRK.A -0.84% BRK.B -0.71% I recall very clearly late in 2008 when my admiration for Warren Buffett as an investor reached even higher levels than ever before. Months later, in an interview with Charlie Rose, the sage of Omaha admitted the price tag was steep. Environmental activists and indigenous communities hailed the cancellation, and traders and analysts said U.S.-Canada pipelines will have more than enough capacity to handle increasing volumes of crude out of Canada, the primary foreign supplier of oil to the United States ( here ). Burlington Northern Santa Fe, LLC; Type: Subsidiary: Industry: Rail transport: Founded: 1993; 28 years … The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. It's been seven years since Buffett's Berkshire Hathaway Inc. announced its biggest deal to date -- the $35 billion-plus purchase of Burlington Northern Santa Fe Corp. Warren Buffett schrieb: „Wir führen diese Wertpapiere mit einem Börsenwert von 1,9 Mrd. Some estimates suggest that the value of Burlington Northern has doubled, thanks to soaring profits and cash flow. It’s an insane deal. Buffett is the chairman and CEO of Berkshire Hathaway, a multinational conglomerate that acquired Burlington Northern Santa Fe Corp (BNSF) in 2009, which was at the time the billionaire investor’s biggest-ever acquisition ( here ). Secondly, there are two kinds of assets. States,” said Mr. Buffett. Geschichte. The BNSF is one of the largest freight railroad networks in North America, with “a rail network of 32,500 route miles in 28 states and three Canadian provinces" ( here ). What Is in the GuruFocus Premium Membership? “I love these bets.” “We are thrilled to have the opportunity to become a part of the Berkshire Hathaway family,” said Matthew K. Rose, Burlington Northern Santa Fe chairman, president and chief executive officer. By DAN BARRY. False. Reuters reported in 2013 - when the Keystone XL was being debated - that some industry officials, energy analysts and recent data raised questions about whether the industry really is eager to adopt crude-by-rail, primarily pointing to the economic cost of using rail over pipelines ( here ). The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. NYT: Awesome Train Set, Mr. Buffett . In a huge vote of confidence in the recovering U.S. economy, Warren Buffett's Berkshire Hathaway Inc. on Tuesday agreed to buy Burlington Northern Santa Fe … In 2009, Warren Buffett made his largest investment ever, buying Burlington Northern Santa Fe Railroad. But they got bored with it, and margins started to come down. The U.S. is also still poised to import record amounts of Canadian oil in the coming years, and several of the lines carrying that crude are in the midst of expansions (more detail on these in a Reuters report   here   ). Thoughts on Warren Buffett's View of Diversification. Warren Buffett will den Eisenbahnkonzern Burlington Northern Santa Fe ganz übernehmen. Berkshire Hathaway's stake in Burlington Northern Santa Fe is up to 19.83 percent, after Warren Buffett's holding company bought 3.3 million additional shares on Monday and Tuesday. The news agency also admits trains on the BNSF carry lots of energy (especially oil and coal). They claim that railways owned by Buffett now stand to benefit from transporting the oil that the Keystone XL Pipeline would have carried. See how politics works? We don’t see a lot of hidden profitability in the culture of the company. However, just four years later, this investment is worth at least $65 … FORBES estimates its value has doubled since then. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. ... “The holding company owns BNSF (formerly the Burlington Northern and Santa Fe Railway), a railroad with existing infrastructure capable of delivering oil and natural gas from North Dakota to oil terminals in the Midwest. Warren Buffett's $26 billion " bet on America " is now official. Buffett should know. Warren Buffett's Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration's decision to … In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. BNSF ’s announcement came merely a week after the … Mr. Buffett’s Berkshire Hathaway Inc. owns Burlington Northern Santa Fe LLC, which is among the railroads that would transport oil … Warren Buffett‘s Berkshire Hathaway (NYSE: BRK-B) bought Burlington Northern Santa Fe for $26.5 billion back in 2010. Our Standards: The Thomson Reuters Trust Principles. Warren Edward Buffett [ˈbʌfᵻt] (* 30. According to public records from OpenSecrets and a spokeswoman for Buffett, this claim is false. Stock quotes provided by InterActive Data. Burlington Northern Santa Fe debt, not included in BNSF’s balance sheet – Source: Source: Berkshire Hathaway 2019 Annual Report. The Warren Buffett-owned BNSF did so, argues AFPM, illegally and without the authority of the federal government. The world's second richest man, Warren Buffett, is buying himself an enormous train set by acquiring one of America's largest freight railway operators, Burlington Northern Santa Fe, … It has three transcontinental routes that provide rail connections between the … During this year, 110.2 million barrels of crude oil were transported from Canada to the United States by rail ( here ), meaning only about 8% of the year’s imports from Canada traveled by rail. Warren Buffett said he's making an "all-in wager on the economic future of the United States" with the purchase of railroad Burlington Northern Santa Fe. Their profitability is much lower than it looks. Sitz des Unternehmens ist Fort Worth. September 2007. In 2012 Burlington Northern had record earnings of $3.372 billion, which means that Buffett's purchase price is 13 times earnings. Berkshire Hathaway did not respond to Reuters request for comment on possible gains from Keystone XL’s cancellation. © 2004-2021 GuruFocus.com, LLC. Let's hope it's a bet that Buffett wins. August 2007 besitzt Berkshire … Andrew Clark . You don’t have a high earnings return. Members Only. Especially since that return is growing at a pretty steady rate.At the 2:30 mark of the interview below with Charlie Rose, Buffett explains why he thought the railroad was a good acquisition. Owned and the other the world 's greatest investor da Wir damit fortfahren werden sie zu kaufen of performance! Posted on GuruFocus.com represent a recommendation to buy Burlington Northern Santa Fe 100!, “ operators prefer to use pipelines and use rail only as bit! 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