The Oracle of Omaha Loves Him Some Railroad Stocks

Get this- railroads are hot again. CNN Money reports that Warren Buffett has been quietly buying up stock in railroad companies.- he got 18% of Burlington Northern Santa Fe in January. Railroads were deregulated in 1980 and the industry has been on an efficiency boosting tear since then. Productivity has more than doubled since 1990 and technological advancements have pushed fuel efficiency by more than 80% since 1980.

Railroads are a lot more efficient than trucks, emitting 65% less emissions than trucks alone on trips over 1,000 miles. Expanding capacity on the rail network is not easy and demand is rising so the railroads are able to raise prices. Railroad stocks have mostly been immune to the softening in the market and after word of Buffett’s buy got out the companies he bought into all saw boosted stock prices.

It’s good (for your bank account) to be green(er).

Link [CNN Money]

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