Money and Finance
- Hoisington Q1 2013 Letter
“The Federal Reserve is printing money”. No statement could be less truthful. The Federal Reserve (Fed) is not, and has not been, “printing money” as defined as an acceleration in M2 or money supply. Just check the facts. For the first quarter...
- Berkshire Hathaway's Texas Ceos Say Buffett Manages By Not Managing
Thanks to Matt for passing this along. Warren Buffett is one of the nation's most successful businessmen. So what's his key to managing Berkshire Hathaway, a corporation that operates 80 businesses with annual revenue of more than $140 billion?...
- Australia’s Mining Bonanza Is Over, Resources Minister Says
Found via Naked Capitalism. Australian Resources Minister Martin Ferguson said the nation’s mining boom has ended as BHP Billiton Ltd. (BHP) delayed approval of its Olympic Dam expansion that Deutsche Bank AG estimated at A$33 billion ($34.7 billion)....
- Ackman Open To Canadian Pacific Selling Dm&e (video)
Feb. 6 (Bloomberg) -- William Ackman, the investor seeking management changes at Canadian Pacific Railway Ltd., talks about his choice of Hunter Harrison to be chief executive officer of the railorad and the possibility that Harrison would consider selling...
- Oak Value Fund Portfolio Managers Take Questions From Morningstar - January 22, 2010
1. What’s your take on Berkshire’s investment in Burlington Northern? When it comes to the long-distance transportation of goods in the U.S., the lowest cost, most energy efficient mode of transportation is rail. Though the capital-intensive nature...
Money and Finance
A stronger network, with more capacity: How BNSF is leveraging a record $4.3 billion in capital investment
Thanks to Lincoln for passing this along.
There can be a distinct advantage to having only one shareholder. For BNSF Railway chief executive Matt Rose, answering to Warren Buffett—who put his faith in the freight rail industry and BNSF management when he acquired the railroad in 2009 ("It's going to be around for the next 100 or 200 years, and you can't move it to China or India," he said at the time)—the advantage is the ability to invest what is necessary into state-of-good repair and capital expansion programs, without analysts or shareholders with short-term financial interests looking over your shoulder.
Rose and his management team know where the investments need to be made. For sole shareholder Buffett—who firmly believes that railroads are essential to the long-term health of the U.S. economy, and will continue to grow as the need for efficient surface transportation increases—all he's looking for is "a reasonable return" on his investment.
BNSF's 2013 capex program is a whopping $4.3 billion, the industry's biggest, about a 16% increase from 2012's $3.6 billion. This year's program was initially set at $4.1 billion, but was increased by $200 million "due to more expansion-related spending," Rose said in the railroad's Form 10-Q for the period ended June 30, 2013. "We will spend $2.3 billion in capital in 2013 to maintain a strong core network and related assets. In addition, we will continue investing in our locomotive and railcar fleet and in projects that expand and improve the efficiency of our infrastructure, and continue installing Positive Train Control in response to a federal mandate."
The program includes about $200 million for PTC and $800 million for terminal, line, and intermodal expansion and efficiency projects.
About 50% of BNSF's 2013 capex program is for engineering projects designed "to make our rail network stronger, with more capacity, so that more customers will want to use our services," Rose tells Railway Age. "We are very passionate about our network velocity, and our maintainability," both of which "are code words for better service."
- Hoisington Q1 2013 Letter
“The Federal Reserve is printing money”. No statement could be less truthful. The Federal Reserve (Fed) is not, and has not been, “printing money” as defined as an acceleration in M2 or money supply. Just check the facts. For the first quarter...
- Berkshire Hathaway's Texas Ceos Say Buffett Manages By Not Managing
Thanks to Matt for passing this along. Warren Buffett is one of the nation's most successful businessmen. So what's his key to managing Berkshire Hathaway, a corporation that operates 80 businesses with annual revenue of more than $140 billion?...
- Australia’s Mining Bonanza Is Over, Resources Minister Says
Found via Naked Capitalism. Australian Resources Minister Martin Ferguson said the nation’s mining boom has ended as BHP Billiton Ltd. (BHP) delayed approval of its Olympic Dam expansion that Deutsche Bank AG estimated at A$33 billion ($34.7 billion)....
- Ackman Open To Canadian Pacific Selling Dm&e (video)
Feb. 6 (Bloomberg) -- William Ackman, the investor seeking management changes at Canadian Pacific Railway Ltd., talks about his choice of Hunter Harrison to be chief executive officer of the railorad and the possibility that Harrison would consider selling...
- Oak Value Fund Portfolio Managers Take Questions From Morningstar - January 22, 2010
1. What’s your take on Berkshire’s investment in Burlington Northern? When it comes to the long-distance transportation of goods in the U.S., the lowest cost, most energy efficient mode of transportation is rail. Though the capital-intensive nature...