Blogs & Comment

Riding Warren Buffett’s coattails

Now that Burlington Northern (BNI) is up 30% on a takeoverby Warren Buffetts Berkshire Hathaway ( BRK.A), some people have sent in congratulations for recommending the stock in a May 4, 2009 blog post. Thank you very much but I didnt see the takeover coming; I was thinking it could take two or three years for Mr. Market to bid it up that high.
And it wasnt really a recommendation: it was more of a reporting piece that observed BNIseemed to be Buffetts one best idea judging from how big his recent acquisition of shares had been. Indeed, anytime I personally recommend a stock, you best run in the opposite direction, or at least view it with a healthy dose of skepticism — remember those past posts on Nortel Networks anyone?
Anyway, with Buffett now approaching 80, there may not be too many more one best ideas to cull from Berkshire Hathaways regulatory filings, regrettably.The days of riding Buffetts coattails would seem to be near their end.
Then again, Buffetts bold move could signal he is intent on deploying the mountain of cash in Berkshire Hathaways coffers before he leaves the helm. Rather than just leave it sitting there for his successors to possibly fritter away, he may be thinking he can do it better (and leave his lifes work on a more secure foundation).
The Burlington Northern deal will claim close to 60% of Berkshire Hathaways cash hoard — leaving $9 billion (U.S.)on the balance sheet (using figures from Richard Beale of So there could be a few more ideas flying out those regulatory filings over the next few quarters (with the third-quarter report due out mid-Nov.).