All Aboard?

Talk about appes and oranges; or would it be onions and potatoes?

Maybe it,s not railroad technology at all, but railroad tracks? Or the remaining alternate square miles land grants along those tracks...the parts not already sold? Or maybe the fact that so much of that tracking runs through abundant spaces with abundant resources...such as wind (power), water (power), sunshine (power), timber, agriculture, food ...even recreation.

I like this answer much better!

http://seekingalpha.com/article/172015-what-buffett-s-burlington-northern-buy-really-means

It is about the cost of crude oil and its relationship to the cost of transportation. Trains move product much cheaper than trucks or airlines. Warren feels that low oil prices will not continue.

All true in principle, but a sudden boon for that railroad company--a company in decline for decades--is certainly not in the cards...likewise for American railroading in general (apart from economies gained through consolidation). The main advantage that will continue to be held by trucking, is that much, if not most, of the railroad track infrastructure in the U.S. has been lost through abandonment and removal as well as conversion to alternative (mostly money losing...subsidised public) enterprises.

So the inferred idea that Buffet might intend to profit from railroad operations is a non-starter.

Most likely would be a kind of breakup of the assets -- RR track, right-of-way, and other infrastructure remaining largely intact (only where profitable) -- other assets (think land and land improvements) serving non-railroad, or railroad ancillary purposes. Earlier guest suggested some uses and benefit (e.g. energy production) that could well be in the offing as Buffet sees things.

It would be no surprise, either, were Buffet (or Buffet estate/trust/foundation), in the relatively near term, to turn a profit by selling or merging (i.e., consolidating) BN railroad assets with those of other (more profitable) railroad companies. The two other remaining major players in the freight haul business would no doubt have the means.

Something like that would be a hard-nose business look at BN by someone as astute as Buffet. A major point being, that it is real estate most likely (among BN assets) to show appreciable potential over time.

You need to get up to date on where the railroads are. Investing in the railroads is a smart thing to do.