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Econwatch
November 4, 2009 11:47 AM

Another Great One-Liner from Warren Buffett

By
Jill Schlesinger
Topics
Financial Decoder

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

Time will tell whether Burlington Northern Santa Fe is a money-maker, although I would be the last one to doubt Warren Buffett.

(AP)

The deal is not just momentous in terms of size, but it also includes the first ever 50-for-1 stock splitof its smaller, class B shares (for the record, Class A trades at approximately $100,000 per share.) The B shares fetch over $3,300 each today, which means that after the split, the cost of one share will be around $65. I remember my brother in-law asking me about his holding in Berkshire Hathaway some years ago. My response was that owning the shares was akin to having a fairly inexpensive value fund in your portfolio.

So, the deal is the largest ever for Berkshire and Buffett said it was an "all-in wager" on economic recovery, which made me chuckle. This guy is what broadcasters like to call a bite machine! Here are some of my favorite Buffett quotes:

• "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1"
• "Be fearful when others are greedy. Be greedy when others are fearful."
• "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
• "You only find out who is swimming naked when the tide goes out."
• "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
• "Price is what you pay. Value is what you get."
• "I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over."
• "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."
• "Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."
• "In the business world, the rearview mirror is always clearer than the windshield."
• "The investor of today does not profit from yesterday's growth."

More on MoneyWatch:
•Calculate: How Long Will You Live?
•8 Rules: Turn $11,558 into $84 Million
•Refi Ripoffs: How to Cut the Fees
•Asset Allocation Funds: 6 Picks
•Best Credit Cards for You
•What Investors Should Be Buying Now

(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

  • Jill Schlesinger

    >> View all articles

    Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

Add a Comment
by 45ford November 5, 2009 2:24 AM EST
edgy - i concur. many people probably won't believe it, but railroads have been operating remote controlled trains for several years. yes you heard right... remote controlled freight trains. in particular, BNSF and several other class 1 railroads as well. it is the future for freight transit and high-speed passenger rail service is the next component that will emerge.
Reply to this comment
by bobnjersey November 4, 2009 7:01 PM EST
["Price is what you pay. Value is what you get." ]

he may be defining 'value' in another way here ... but i'd change this one to 'price is what you pay ... value is what others are willing to pay'.

nothing has any real value (especially a stock certificate) until someone else is willing to buy it ... and it's value will be defined by what they think it's worth.
Reply to this comment
by bobnjersey November 4, 2009 6:55 PM EST
["Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."

"Be fearful when others are greedy. Be greedy when others are fearful." ]

these two just happened in the last year. nearly every investment pundit on tv said to get out of banking stocks ... 'nobody is in banking stocks' is what i can still hear ringing in my ears.

incesent claims that the government was going to take over the banks ... the banks are going to fail ... they'll be runs on the banks.

some have failed ... but many others were huge buying opportunities ... historic lows that haven't been and won't be seen for generations.

many are up a minimum of 100% ... some over 300%. the only mistake was not to lay more $$'s on the table when the fear was rampant.
Reply to this comment
by bearkaz November 5, 2009 4:04 AM EST
but the risk was real...nobody knew what was going to happen. Things could have worked out differently.

The key point is that risk and reward are tied. There is no way to change the 'law' that dictates that reward is linked to risk. The best you can do is what the bigshots do: find some way to harvest the reward, while manipulating some other poor schmoe (that's usually US) to get stuck with the risk.
by jumkey November 4, 2009 2:16 PM EST
Jesus. Business homilies are what passes for work on Wall Street these days?

You should learn a trade Jill. Maybe acquaint yourself with a hoe or spade and learn how they work (hint: the pointy end goes down)
Reply to this comment
by skepticalJM November 4, 2009 1:52 PM EST
Add this to your one liners: "Only in America are the worthless made into something important (at least for fifteen minutes)".
Reply to this comment
by edgy44 November 4, 2009 1:48 PM EST
High speed rail is just around the corner. When you think high speed rail, think about all the 18-wheel trucks on the highway. Now think about all those trailers on a platform moving at 300 knots 10 feet off the ground, along with 100 bundles of fiber, and 3 lines of electricity between each tower. Now you have someplace for windmills and solar panels to connect to. Picture this across I-40 from Barstow to Nashville. Yea, huge money, huge future.
Reply to this comment
by nojoy01 November 4, 2009 8:16 PM EST
by edgy44 November 4, 2009 1:48 PM EST
High speed rail is just around the corner. When you think high speed rail, think about all the 18-wheel trucks on the highway. Now think about all those trailers on a platform moving at 300 knots 10 feet off the ground, along with 100 bundles of fiber, and 3 lines of electricity between each tower. Now you have someplace for windmills and solar panels to connect to. Picture this across I-40 from Barstow to Nashville. Yea, huge money, huge future.
------------------------------------------------------------------------
I hope you are planning on a 2 way rail system, east & west. Next, I think you'd better plan on several regional rail centers both east & west. NYC alone has approximately Five Thousand "big rigs" delivering from the west every day. Groceries, raw materials, finished products, etc. If you are going to provide rail service for all trucks going to New England, Mid Atlantic, and the Southern Coast & Florida you're probably looking at a minimum of moving 40,000 trailers per day. Through NASHVILLE? Pardon me, but having driven over the road since '79 I'll ask you to trust me on this. There isn't enough level ground in Nashville to build parking lots for that many trailers. Remember the West bound trailers? That means you'll have to move 80,000 trailers a day through Nashville. I don't even want to think what the traffic would be like on those old twisty roads around Nashville. Nope. You'll need regional terminals on both ends. BUT, the idea is do-able.
by nojoy01 November 4, 2009 8:27 PM EST
by nojoy01 November 4, 2009 8:16 PM EST
by edgy44 November 4, 2009 1:48 PM EST
High speed rail is just around the corner. When you think high speed rail, think about all the 18-wheel trucks on the highway. Now think about all those trailers on a platform moving at 300 knots 10 feet off the ground, along with 100 bundles of fiber, and 3 lines of electricity between each tower. Now you have someplace for windmills and solar panels to connect to. Picture this across I-40 from Barstow to Nashville. Yea, huge money, huge future.
------------------------------------------------------------------------
I hope you are planning on a 2 way rail system, east & west. Next, I think you'd better plan on several regional rail centers both east & west. NYC alone has approximately Five Thousand "big rigs" delivering from the west every day. Groceries, raw materials, finished products, etc. If you are going to provide rail service for all trucks going to New England, Mid Atlantic, and the Southern Coast & Florida you're probably looking at a minimum of moving 40,000 trailers per day. Through NASHVILLE? Pardon me, but having driven over the road since '79 I'll ask you to trust me on this. There isn't enough level ground in Nashville to build parking lots for that many trailers. Remember the West bound trailers? That means you'll have to move 80,000 trailers a day through Nashville. I don't even want to think what the traffic would be like on those old twisty roads around Nashville. Nope. You'll need regional terminals on both ends. BUT, the idea is do-able.
------------------------------------------------------------------------
Now, I could see Nashville as being the Eastern end of the Southern East-West rail route with "feeder" rails going to the aforementioned regional centers. And Akron as being the Eastern end of the Northern East-West rail route with "feeder" rails going to the twice before mentioned regional centers. We started in 1958 with nothing but a dream and the example of the German Autobahns and within 20 years had completed the majority of the Interstate Highway System. If we're willing to spend the money and gain the benefits I don't see why we couldn't have most of the "high speed rail system" built in the next 20 years. We already know how to do it, we just need to spend the money on something useful instead of pi$$ing it away on useless wars.
.

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