By Charlie Carter 11/04/09 – 17:32
Yesterday, American investor and business mogul Warren Buffett announced that his conglomerate holding company Berkshire Hathaway will pay $34 billion to buy out Burlington Northern Santa Fe Corp – his biggest-ever acquisition.
The move is based on a bet by Buffett that BNSF – the US’s largest rail company – will see massive benefits from a recovering US economy.
Meanwhile, reports are beginning to surface that the massive deal may lead Buffett to sell some of his prior investments, which include a number of insurance and financial firms – such as M&T Bank and American Express – as well as food and beverage giant the Coca-Cola Co. and newspaper publishing firms including the Washington Post.
Life at the top
The history of Warren Buffet investments are long and complex and to call Buffett a seasoned-investor is something of an understatement. As company chairman and CEO of Berkshire Hathaway, Buffett has long used the "float" provided by his firm’s insurance operations to finance his own investments.
In the early days of his career at Berkshire, Buffett tended to focus on long-term investments in publicly quoted stocks, but has more recently turned his attention to buying whole companies out – like BNSF – that have subsequently provided the elusive investor with a plethora business ventures, included outlets in candy production and jewelry sales.
Earlier this month, British economist and television presenter Evan Davis met with Buffett for a BBC television documentary, The World’s Greatest Money Maker. The honorary title is clearly warranted.
In short, Buffett manages to make more money than other investors by essentially being less ambitious. While Wall Street’s "Up-and-Coming" set their sights on high returns, using leverage, Buffett’s steady annual compounding of increases, avoiding debt, has always worked better.
Warren Buffett, one of the world’s best-known business people, is clearly different from the rest of the super-rich. At cut above, you could argue. As his biographer, Alice Schroeder, explains, Buffett’s method is "simple, but it’s not easy."
And, with yet another massive investment now under his belt, there is definitely more to this captivating financial services tycoon than meets the eye. Warren Buffett, we salute you!
