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  • November 3, 2009 09:16 AM EST by Brian Sullivan

    Warren Buffett's Big Bet on Coal

    Coal-Train

    Warren Buffett's Berkshire Hathaway did its biggest deal ever today, buying the rest of Burlington Northern Sante Fe that it doesn't already down.    It's a nice 31% premium to BNI's stock price.

    While Buffett said he's making an "all-in wager on America" and its economy with the deal, he may also be making a big bet on coal.

    Despite being villified by the 'green' side of the energy debate, coal is still our biggest source of power production.   Burlington Northern hauled 297 million tons of coal last year.   That amount, according to the company, is enough to power 10% of America's energy needs.

    If Buffett were that concerned coal was the proverbial "buggy whip" of energy, it is unlikely he would make this deal.

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Nik

Mr. Buffet is indeed a very astute investor. Timing may be bit premature given instability of markets, but longer term he now has vertically integrated BRKB. If the transaction is approved,he'll controls the transportation that is so crucial to both rails and utilities,not to mention exports and imports. His stake in each has now been raised to the power of the US Economy. Congratualtions Mr Buffet on a strategic move. MaY GOD bless AMERICA & help all to oercome our economic struggles!

November 3, 2009 at 11:17 am

john doyle willis

Perhaps Mr. Buffet's purchase of BNI will lead to at least one USA railroad with "single operating rights" from the Atlantic Ocean to the Pacific Ocean. Should this happen, the USA would enjoy the same flexibility as Canada, vis-a-vis, railroads.

November 3, 2009 at 10:47 am

about this blog

  • Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block. Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.

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