Warren Buffett's purchase of Burlington Northern Railroad could be an
absolutely brilliant long term investment.  This investment has the
ability to combine electric power generation with railroad right-of-
ways.

In my opinion railroads are generally a real estate play.  They own a
lot of property with low grades that crisscross the entire United
States.  Berkshire Hathaway holdings of MidAmerican Energy is a
electric utility that generates and distributes power.  The
combination of the two provides a very potent energy generation
company with a distribution right-of-way.

For those not familiar with HVDC let me explain.  High Voltage Direct
Current allows for the transmission of millions of volts across
smaller cables that can be buried underground verse traversing the
eyesore towers.  If you want to increase business why not sell power
direct to your business customers that have a rail spur or transmit
bulk power thousands of miles to backup another utility.  Not a
problem if you own the railroad right of way.  Want to make high speed
cross country electric trains?  Put an electric company on the right
of way and you have the combination of MidAmerican and Burlington
Northern.  This is a phenomenal way to increase the asset value of two
highly regulated industries.

Like I said this could be an absolutly brilliant investment, but you
better be a long term thinker.

Bill Harder

http://www.billharder.com/investments/46-general-investment/125-the-r...

Last Updated ( Sunday, 08 November 2009 02:01 )