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

13 Comments

  • Reply FishplateFilms February 7, 2013 at 11:08 pm

    A smart man with a level headed approach!

  • Reply Yeabuddy8times April 21, 2013 at 2:38 am

    How much does Berkshire have in the bank?

  • Reply darrzan n April 22, 2013 at 4:44 am

    47 billion in cash

  • Reply darrzan n April 22, 2013 at 4:46 am

    at the end of 2013 they might have 62 billion!

  • Reply Yeabuddy8times April 22, 2013 at 11:51 am

    @darrzan what is their evaluation?

  • Reply darrzan n June 13, 2013 at 8:34 pm

    check their sec filing

  • Reply UG-RailTrance August 4, 2013 at 9:11 am

    all i heard was Blah blah Im rich and your not blah blah blah.

  • Reply Michael Smith October 2, 2013 at 1:39 am

    BNSF profits are largely tied to coal. And they are not as energy efficient and and eco-friendly as they claim. It's alot of propaganda.

  • Reply Grimkell Dane January 5, 2014 at 5:39 am

    When you move 100+ cars at 100 tons each = very Efficient then moving by thousands of trucks doing the job. And doesn't destroy the interstate or highways doing it.

  • Reply Olga King June 8, 2014 at 10:59 am

    There are a couple of statements that concern me. At apprx 7:05 – 7:20 he says there were over 1.5 million workers after world war II but now it is more efficient with 200,000 workers. How about generating jobs for humans. I do not understand him and his philosophy on money. This is the problem with our country. He values his share at 130% but devalues the Dollar at 90. How do they come up with the math? How about giving humans what you all have taken from us. The energy comment hit me hard.

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  • Reply Ramesh Ekanayake October 12, 2015 at 3:25 pm

    Not certain about the points made but ,if anyone else wants to learn about how to apply for a railroad job try Tarbetti Rail Work Tutor (should be on google have a look ) ? Ive heard some great things about it and my friend got excellent success with it.

  • Reply Alex Paumen May 18, 2017 at 8:28 pm

    If Warren Buffett decided to have classic BN & ATSF power grace home rails again I sincerely thank him.

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