Warren Buffett’s Top Plays: #17 BNSF

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      Lesson summary:

      In 2010, Berkshire Hathaway, led by Warren Buffett, purchased all outstanding shares of Burlington Northern Santa Fe (BNSF), one of North America’s largest freight railway companies, for $33 billion, which represented 18% of Buffett’s net worth at the time. Despite his dislike of issuing Berkshire stock, Buffett issued 95,000 shares, equivalent to 6.1% of the outstanding shares, to make the deal happen. BNSF was seen as a valuable asset due to its size and competitiveness in the industry, with a net income of $2.1 billion in 2008 and $1.7 billion in 2009, and a P/E range of 16-20. Buffett’s decision to acquire BNSF teaches us the importance of doubling down on what we already own. Prior to the acquisition, Buffett had multiple investment vehicles, including BPL, Diversified Retailing, and Blue Chip Stamps, which were merged into Berkshire Hathaway in 1983. However, calculating Buffett’s interest in these investments can be complex due to his involvement in multiple companies simultaneously.

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