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    Warren Buffett explains Purchase of Burlington Northern Santa Fe Railroad (April 1, 2011)
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    Warren Buffett explains Purchase of Burlington Northern Santa Fe Railroad (April 1, 2011)

    August 15, 2019


    warren buffet is here as you know he is
    perhaps the world’s most respected investor is also chairman and c_e_o_
    berkshire hathaway he’s been on this program many times i
    last spoke with him over a year ago at the peak of the worst economic crisis
    system great depression at that time he said that america been struck by the
    economic pearl harbor but much has changed since then he’s here to tell us
    how you use a global an american economy recovery his own company reflects a
    progress made in recent months last week berkshire hathaway struck eight twenty
    six two billion dollar deal to buy all of burlington northern santa fe railroad the largest acquisition company
    history he called the deal at all in wager on
    the american economy he’s in new york return all of that
    could help with bill dated from university yesterday iteration agreed to stay over in new
    york annette tonight and i am pleased to have a good friend of this program of
    the friend of mine back at this table welcome thank you charlie completed here a_t_c_ it has been certainly from the middle of two
    thousand eight to the middle of two thousand nine one incredible year
    monogram away so why do a lot of chocolate can be answered tell me about for you well at it was that we did was an
    extraordinary times this country we came closer to a financial meltdown than than
    uh… certainly anytime i’ve ever seen and
    probably in certain respects even it was even more panic in the the great
    depression because it came out so fast and so on expected and and uh… the whole country one of the the
    leverage of corporations individuals and unfortunately we have a government that
    responded and that was inclusive when we talked last that that it was will question and uh… of
    whether congress would wish mom like they should they did defiantly finding there that i i i i without there with me and i mean in in
    the end the come together for things of this vital to the country but but we have the right people and and and
    washington at least if we had a group of the the behave like a near the
    headlights uh… uh… there we got run over so paulson
    and burning kian geiger were the right people at the right time and you don’t know what might have
    happened if others have been in those positions of power out there that i can think of other tomato may provide
    the government work toward the ending one of the would have been with us in
    the abyss revenue just tearing down and do it uh… you made some investors during
    that period right general electric goldman sachs atop but you just pulled out the big elephant
    gun meat contaminated water mark roberts
    yourself and i think he said it sticks to the last nickel for this workshop why did you do well i i i felt was an opportunity to my
    a the business that those is going to be around for a
    hundred two hundred years that’s that’s that’s been a roll when with the
    american economy in a way that that the american economy prospers leave the
    business will prosper so that that that is the most efficient way of moving
    uh… goods in the country it’s the most uh… environmentally friendly way of moving
    goods and both will send him a very important but the biggest thing as
    united states is going to be going to do well in india we campbell guerrero dirt rider and do
    you have to accept it so uh… it so like the river that’s sort of a new
    york we have to make it here we’ve got to get anywhere i have not heard and
    send them elliott but it does move four hundred ns stand all the time of of good four
    hundred and seventy miles on one gallon of diesel that replaces adult rain
    replaces two hundred eighty trucks on the road and that it omits for us into the atmosphere
    that’s damaging than uh… than trucking spend animals forty brown one of them up
    already removed forty percent of the goods pleasanton yet new port of entry
    is like houston and bring a lot of europe through the panama canal and we’re going
    to more people this country and around the using more goods over top of that and sure there’s a bad year from time to
    time in the next hundred years probably fifteen bad years but but and i don’t
    know what order of the whole peer but i also deliver a little bit of
    sexual the country you know when you call troy monitor them think about this
    did did he say right on warren or do you say about this
    somewhat and it’s bitterly chores around came up we thought it i don’t care about
    likely have our white combined financially jellyfish alligator travel
    all level of almost nothing and at that and if that is a really
    portion of the jury so but i mean he also pointed out it is said that you know there was this was a regulated industries juror
    this was an industry that was capital-intensive a recap of this was an
    industry uh… now if you do spend money unionized do
    you know how you spend money in this business regularly every day you spent a lot of
    money repair tracker window at rolling stock whatever may be so its capital
    intensive and and uh… tentative spenders regulated and it will
    continue the regular and continue the cap on times and i think that what the service provided by
    railroads is so important captain in many ways are made at at at
    at that it’s the right way to movements around
    the country to the terms that you’re going to work that can do it farm far more attractive in terms of uh… global warming and and and and then
    uh… using trucks for example so it will be here and if we get made the reasonable return on the added
    capital investment a little break out of capital investment uh… will do okay admissible returns
    going up reason which is good enough for the
    tremendous fifty years ours looking for spectacular
    returns but i think i can i can find i think that’s going on in the area that
    we have a bit eight or ten billion dollars to invest
    every year and when you totally business and it’s the
    same thing there i mean when we build a bridge on a rationing or something of
    the short we shouldn’t expect a spectacular
    returns were building things at ur a sexual society and people-meter services that we don’t have
    any choice in the in the case of the electric utilities for example and
    sometimes in case of rail in we should get a decent return on that
    and advanced enough to encourage us to keep putting money into the business but
    we’re not entitled a spectacular pictures god u_k_ recall well it’s a bit that’s a big win in
    terms of timing john bread and if the fact we’d wean ourselves off cole is that a big problem well we will win
    ourselves off ko overtime but with we can’t change forty percent of electric generation the
    ghost of comfortable we can change that next week or next month or next year but
    we will reduce over time and we should be to join you can do the things that
    are any changes will be other world there’ll be more grain to move and i’ll
    be moral all that chemicals or whatever it may be uh… that there will be more things moving around
    this country ten or twenty or thirty years knowing your idea about mostar it is it a pleasing idea that no one is
    likely to get into the railroad business promote if they want to come on to
    reproduce uh… the burlington northern santa fe are you know it might take a
    hundred billion dollars are solid billion years they are they got their roles for me
    also modernize today are they not only one or more sleep than normal for the
    uh… the the railroad line et cetera like the events as they are
    they’re moving far more time uh… some miles uh… a product uh… uh… will with less awesome the way of people uh… less in the way if you all rental income for more efficient over
    the years there were a million and a half people
    employed the rail industry after world war two now there are some mob less than two hundred thousand united
    states and they’re moving far more good so it’s really become a video you watch
    those hundred and thirty in the trains double stacked you have all the railroad companies in
    your portfolio you’re selling them i’ve already told
    them they are not that i i i don’t know i just official take the transaction i
    think that the government investments but i uh… i would’ve held on this if this had
    happened uh… when you look at the future there’s also the argument made combat that this is something that goes with
    your philosophy today get out of cash and get into assets as we don’t know what’s gonna happen to
    the top cash is always a bad investment abuses so it will be able to cash is
    king a year ago i mean that’s crazy coming cash wasn’t
    producing anything and it was surely a noun value over time i know you always want to sure have
    enough time to have her back because i think my god you are you sure to rally
    to get out at which they don’t have you don’t have access to the maserati and
    cash we will always have enough cash around
    what anytime we have surplus cash around i’m unhappy i mean i would much rather
    have a good businesses in cash and and uh… we found a chance in the last year
    thereabouts to deploy weekly came and with something over forty billion a
    camera and we’ve got about twenty billion dollar and we’ve had some
    earning so we would put a lot of cash for work and i like that no i’d much rather out
    of the business uh… that cash hot and it is a hedge against the dollar begins at all assets are edgy and set up
    a dollar on and that all of you know is that the dollar is
    going to be worthless ten twenty thirty years from now ice a worth what’s
    not working chellam notes left but i think it will be a factor or
    special almost every person that i go back over the question is how much depreciate in
    value but cash cash is not a place that uh… that-and
    why is it well there’s always gonna be worthless
    because will will be mo put more of a man relation to the amount
    of goods and are moving there and all of it week if we drop we dropped a billion dollars of cash and
    every household united states today everybody feel very good except the people invest in things that
    were denominated in dollars wheat activity that will be no tendency outdoor deflation and in this country
    over time or or virtually in attendance to inflation absolutely well the conversation we’ve had and never thought that i would sit with
    you and we’ll talk about a fifty one split traffic lights blacktop right i mean
    this had to be a hard when or not i think i had a lobotomy one night and i
    don’t know why i did dot it it is not is not natural for me but but it it was needed to facilitate the small shareholders of bien es up
    getting the same deal