Elephant bags his Buffett
Mission completed. Rail giant Burlington Northern (NYSE: BNI) shot and killed a massive, $155 billion elephant with this selloff to Berkshire Hathaway (NYSE: BRK-A).
For his $44 billion in cash and shares, Buffett will get a piece of dying industry, $11 billion of net tangible assets (mostly rusty rails and crappy railroad cars), and an annual free cash flow of slightly greater than $1 bln. With any luck, 30 years from now he will recover his principal if the rusty railway doesn't fall apart by that time. More likely, though, I think there will be a sudden about-face in a few months, and BNI will join COP as another failed investment idea of Buffett, who, may I remark here, is slowly but steadily going Jim Cramer.