Is Warren Buffett calling a bottom?

[mustang84isu]

Is Warren Buffett calling a bottom?

 

Berkshire Hathaway's acquisition of railroad Burlington Northern may boost the transportation industry -- and that could be a good sign for the economy.

 

NEW YORK (CNNMoney.com) -- 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. Let's hope it's a bet that Buffett wins.

 

The Oracle of Omaha stunned the markets Tuesday with the announcement that his holding company Berkshire Hathaway (BRKA, Fortune 500) was scooping up the remaining 77% of Burlington Northern (BNI, Fortune 500) that it didn't already own. He's paying $100 a share, a 31.5% premium to Monday's closing price.

 

Unsurprisingly, shares of Burlington shot up nearly 30% Tuesday morning. Choo-choo! And even though the Burlington deal may not spark a massive wave of consolidation in the railroad industry, don't tell that to traders.

 

Shares of the other big three U.S. railroads -- Union Pacific (UNP, Fortune 500), CSX (CSX, Fortune 500) and Norfolk Southern (NSC, Fortune 500) -- all rose by at least 5% Tuesday morning. Smaller railroad Kansas City Southern (KSU) was chugging along with a more than 9% gain.

 

But if the Burlington deal ignites legitimate interest in the rails as well as the transportation sector at large, that is undoubtedly good news.

 

Many financial experts believe that the performance of railroads, truckers and other transportation companies is a good leading indicator of how the economy and broader market will do.

 

To that end, it's been an encouraging sign that the Dow Jones Transportation Average, or the DJ Transports for short, has outperformed the Dow 30 since the market hit its low point for the year in early March.

http://money.cnn.com/2009/11/03/markets/th...sion=2009110312

[Edstock]

IMHO, it reflects that long-distance trucking may start to decline. The market for Class 8 tractors may start shrinking.

Edited November 3, 2009 by Edstock

[fmccap]

How about the bet he made with GE at $23 something dollars saying everything would be fine?

[Ralph Greene]

How about the bet he made with GE at $23 something dollars saying everything would be fine?

 

He didn't buy the common stock. He bought a special GE preferred paying him (as I recall) a 9% dividend while he waits for the company to come back. I imagine that preferred is now worth more than he paid. So...he's doing fine.

 

The common stock is for us "little" folks.

 

BTW....Buffett buying BNI is classic Buffett. He understands our best years are ahead. He understands you have to make your bets when most are still pessimists. When most begin to feel comfortable investing again, after the market is much higher than now....he'll sell you some of his stocks.

Edited November 6, 2009 by Ralph Greene

[mustang84isu]

He didn't buy the common stock. He bought a special GE preferred paying him (as I recall) a 9% dividend while he waits for the company to come back. I imagine that preferred is now worth more than he paid. So...he's doing fine.

 

The common stock is for us "little" folks.

 

BTW....Buffett buying BNI is classic Buffett. He understands our best years are ahead. He understands you have to make your bets when most are still pessimists. When most begin to feel comfortable investing again, after the market is much higher than now....he'll sell you some of his stocks.

Yep...buy on fear, sell on greed has long been Buffett's motto.

[J-150]

Yep...buy on fear, sell on greed has long been Buffett's motto.

 

 

which means not getting freaked out over quarterly results. Hang onto assets for the long term. Almost always works.

[Trimdingman]

Warren Buffet is 79 years old. All he needs is for the crisis to be delayed for a few years. I think that we have reached the point of no return, and we are into an irreversible downward spiral. Offical unemployment is 10.2%. Real unemoloyment is double that and increasing. The fed is printing money at an unprecedented rate. Interest rates are at zero, so they can't be cut any more. If they go up, millions more people will default on their debts. This situation can't continue indefinitely. The stock market is going up, but so is gold. That proves that the increase is just hot air, not real value. Adjusted for the increase in the price of gold, the stock market is below its 2008 low. The dollar is nothing but debt. That means that it is worth nothing.

[Ralph Greene]

Warren Buffet is 79 years old. All he needs is for the crisis to be delayed for a few years. I think that we have reached the point of no return, and we are into an irreversible downward spiral. Offical unemployment is 10.2%. Real unemoloyment is double that and increasing. The fed is printing money at an unprecedented rate. Interest rates are at zero, so they can't be cut any more. If they go up, millions more people will default on their debts. This situation can't continue indefinitely. The stock market is going up, but so is gold. That proves that the increase is just hot air, not real value. Adjusted for the increase in the price of gold, the stock market is below its 2008 low. The dollar is nothing but debt. That means that it is worth nothing.

 

 

Which country are you planning to move to? Where the future looks better.