Is Buffet Betting on a Commodities Gold Rush With His New Railroad?

By Jason Busch on November 17, 2009

: Image by Getty Images via Daylife

Over on Spend Matters affiliate site MetalMiner, my better half, Lisa Reisman, recently speculated about some of the reasons why Warren Buffet may have bought out the rest of Burlington Northern. For all you Berkshire groupies, the deal is particularly interesting, given it’s the largest single investment the Sage of Omaha has ever made. But I digress. The crux of Lisa’s argument is that the bet suggests an interesting hedge of sorts involving a long-view on commodities.

Specifically, Lisa opines that, “Buffett is signaling where he thinks dollars will get spent (e.g. on commodities)”. To wit, “Instead of turning to gold…

Warren Buffett, the collector (seattletimes.nwsource.com)
Buying One, Buffett Aims to Sell Off 2 Railroads (nytimes.com)
“Oil at $1000 per barrel in 2030?” asks a recent PwC survey reporting on how transportation and logistics companies will evolve (newswire.ca)
Railways: Changing the driver (guardian.co.uk)
How Big is Buffett’s Railroad Bet? (blogs.wsj.com)
“Maybe Buffett Just Likes Playing With Trains” (blogs.wsj.com)
Buffett bites off more than Berkshire can chew (thestar.com)

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Posted in Business, Featured Posts | Tagged Berkshire, Berkshire Hathaway, Burlington Northern, Burlington Northern Railroad, commodities, goldrush, Jason Busch, railways, Sage of Omaha, Warren Buffett

Jason Busch

Obsessed with how companies manage, spend and save money, Jason writes about procurement, trade and supply chain issues @ Spend Matters. He has significant first hand experience developing and marketing technology and services products, has advised numerous companies on sourcing and related techniques as well as M&A pursuits. In previous lives before tech, he was a management consultant and merchant banking analyst.