Any thoughts, feelings and pros and cons of this move. Switching company buying a class 1 rail road!
Berkshire Hathaway is an investment company and buys stock in companies solely for investment purposes. They have increasingly turned to purchasing entire firms but they do NOT operate as a “Conglomerate” i.e the companies they acquire are not placed under common “top down” management. They let the management of the firms they buy run the operations side of the business.
http://en.wikipedia.org/wiki/Berkshire_Hathaway
The businesses they buy tend to do better than the average in their respective industries and Berkshire Hathaway is very commited to major capital investments to grow their holdings.
They acquired Railserve when they purchased it’s corporate Parent, Marmon Industries but it is absurd to say that that means they are a “switching company”(They also own Baskin-Robbins, does that mean an Ice Cream store bought a Class 1?)
BH has a long history of major investments in the RR industry, previously having held large amounts of stock in NS,UP and Wisconsin Central so I don’t quite get your point?
Isn’t Buffet a noted Train Buff?
I believe so - hence one new definition of BNSF was “Buffet’s New Santa Fe”.
As long as they stay an investment/ holding company and don’t mess with the outfits they own that are profitable and well run they should be OK. It seems that when holding companys turn themselves into operating companys the trouble starts and chaos ensues. It happened where I work. We still haven’t recovered 100%.
Buffet’s MO has been to buy profitable companies that have growth potential and let their management run them as opposed the the ‘Hedge Fund’ type of purchaser that wants to buy into a company with good cash flow - put the company in debt, all the while ‘liberating’ the cash from the company so that all that is left is a company shell that is adorned with debt and has nothing the pay off the debt with.
Buffet has been one of the “good guys” in the cesspool of investors and hedge funds whose sole purpose is to reduce a company removing all the fat and meat leaving nothing but a bare bone to sell off at inflated prices. He is there to operate a company to make money and not just cook the books so it looks like it is profitable. He understands being a capitalist and an industrialist by investing grows a company and the local and country’s economy instead of the way hedge fund investors operate.