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  • warren buffet is here as you know he is perhaps the world's most respected

  • investor is also chairman and c_e_o_ berkshire hathaway

  • he's been on this program many times i last spoke with him over a year ago at

  • the peak of the worst economic crisis system great depression at that time he

  • said that america been struck by the economic pearl harbor but much has

  • changed since then he's here to tell us how you use a global an american economy

  • recovery his own company reflects a progress made in recent months last week

  • berkshire hathaway struck eight twenty six two billion dollar deal to buy all

  • of burlington northern santa fe

  • railroad the largest acquisition company history

  • he called the deal at all in wager on the american economy

  • he's in new york return all of that could help with bill dated from

  • university yesterday

  • iteration agreed to stay over in new york annette tonight and i am pleased to

  • have a good friend of this program of the friend of mine back at this table

  • welcome

  • thank you charlie completed here a_t_c_

  • it has been

  • certainly from the middle of two thousand eight to the middle of two

  • thousand nine one incredible year monogram away so why do a lot of

  • chocolate

  • can be answered

  • tell me about for you

  • well at it was that we did was an extraordinary times this country we came

  • closer to a financial meltdown than than uh...

  • certainly anytime i've ever seen and probably in certain respects even

  • it was even more panic in the the great depression because it came out so fast

  • and so on expected and and uh...

  • the whole country one of the the leverage of corporations individuals and

  • unfortunately we have a government that responded and that was

  • inclusive when we talked last that that

  • it was will question and uh... of whether congress would wish mom like

  • they should they did

  • defiantly finding there that i i i i

  • without there with me and i mean in in the end the come together for

  • things of this vital to the country but

  • but we have the right people and and and washington at least if we had a group of

  • the the behave like a near the headlights uh...

  • uh... there we got run over so paulson and burning kian geiger

  • were the right people at the right time

  • and you don't know what might have happened if others have been in those

  • positions of power out there that

  • i can think of other tomato may provide the government work toward the ending

  • one of the would have been with us in the abyss revenue just tearing down and

  • do it

  • uh... you made some investors during that period right

  • general electric

  • goldman sachs atop

  • but you just pulled out the big elephant gun

  • meat contaminated water mark roberts yourself and i think he said it sticks

  • to the last nickel for this workshop

  • why did you do

  • well i i i felt was an opportunity to my a

  • the business that

  • those is going to be around for a hundred two hundred years that's that's

  • that's been a roll when with the american economy in a way that that the

  • american economy prospers leave the business will prosper so that that

  • that is the most efficient way of moving uh...

  • goods in the country it's the most uh...

  • environmentally friendly way of moving goods and both will send him a very

  • important but the biggest thing as united states is going to be going to do

  • well in india

  • we campbell guerrero dirt rider and do you have to accept it

  • so uh... it

  • so like the river that's sort of a new york we have to make it here we've got

  • to get anywhere i have not heard and send them

  • elliott but it does move

  • four hundred ns

  • stand all the time of of good four hundred and seventy miles on one gallon

  • of diesel that replaces adult rain replaces two hundred eighty trucks on

  • the road and that

  • it omits for us into the atmosphere that's damaging than uh... than trucking

  • spend animals forty brown one of them up already removed forty percent of the

  • goods pleasanton yet new port of entry is like houston and bring a lot of

  • europe

  • through the panama canal and we're going to more people this country and around

  • the using more goods over top of that

  • and sure there's a bad year from time to time in the next hundred years probably

  • fifteen bad years but but and i don't know what order of the whole peer

  • but i also deliver a little bit of sexual the country you know when you

  • call troy monitor them think about this did did he say

  • right on warren or do you say about this somewhat and it's bitterly chores around

  • came up we thought it i don't care about likely have our white combined

  • financially jellyfish alligator travel all level of almost nothing

  • and at that and if that is a really portion of the jury so but i mean he

  • also pointed out it is said that

  • you know there was

  • this was a regulated industries juror this was an industry that was

  • capital-intensive a recap of this was an industry uh...

  • now if you do spend money unionized do you know how you spend money in this

  • business

  • regularly every day you spent a lot of money repair tracker window at rolling

  • stock whatever may be so its capital intensive

  • and and uh...

  • tentative spenders regulated and it will continue the regular and continue the

  • cap on times and i think

  • that what the service provided by railroads is so important

  • captain in many ways are made at at at at that

  • it's the right way to movements around the country to the terms that you're

  • going to work that can do it

  • farm

  • far more attractive in terms of uh...

  • global warming and and and and then uh... using trucks for example so

  • it will be here and

  • if we get made

  • the reasonable return on the added capital investment a little break out of

  • capital investment

  • uh... will do okay admissible returns going up

  • reason which is good enough for the tremendous

  • fifty years ours looking for spectacular returns but i think i can i can find i

  • think that's going on in the area that we have a bit

  • eight or ten billion dollars to invest every year and

  • when you totally business and it's the same thing there i mean when we build a

  • bridge on a rationing or something of the short

  • we shouldn't expect a spectacular returns were building things at ur a

  • sexual society and

  • people-meter services that we don't have any choice in the in the case of the

  • electric utilities for example and sometimes in case of rail in

  • we should get a decent return on that and advanced enough to encourage us to

  • keep putting money into the business but we're not entitled a spectacular

  • pictures god

  • u_k_ recall

  • well it's a bit that's a big win in terms of timing john bread and if the

  • fact we'd

  • wean ourselves off cole

  • is that a big problem well we will win ourselves off ko overtime but with

  • we can't change

  • forty percent of electric generation the ghost of comfortable we can change that

  • next week or next month or next year but we will reduce over time and we should

  • be to join you can do the things that are any changes will be other world

  • there'll be more grain to move and i'll be moral all that chemicals or whatever

  • it may be uh... that

  • there will be more things moving around this country ten or twenty or thirty

  • years

  • knowing your idea about mostar

  • it is it a pleasing idea that no one is likely to get into the railroad business

  • promote if they want to come on to reproduce uh... the burlington northern

  • santa fe are you know it might take a hundred billion dollars are solid

  • billion years

  • they are they got their roles for me also modernize today are they not only

  • one or more sleep than normal for the uh... the

  • the railroad line

  • et cetera like the events as they are they're moving

  • far more time

  • uh... some miles uh... a product

  • uh...

  • uh... will with less

  • awesome the way of

  • people uh...

  • less in the way if you all

  • rental income for more efficient over the years

  • there were a million and a half people employed the rail industry after world

  • war two

  • now there are some mob

  • less than two hundred thousand united states and they're moving far more good

  • so it's really become a video you watch those hundred and thirty in the trains

  • double stacked

  • you have all the railroad companies in your portfolio

  • you're selling them i've already told them they are not that i i i don't know

  • i just official take the transaction i think that the government investments

  • but i uh...

  • i would've held on this if this had happened

  • uh... when you look at the future

  • there's also the argument made combat

  • that this is something that goes with your philosophy today get out of cash

  • and get into assets

  • as we don't know what's gonna happen to the top

  • cash is always a bad investment

  • abuses so it will be able to cash is king a year ago i mean

  • that's crazy coming cash wasn't producing anything and it was surely a

  • noun value over time

  • i know you always want to sure have enough time to have her back because i

  • think my god you are you sure to rally to get out at which they don't have you

  • don't have access to the maserati and cash

  • we will always have enough cash around what anytime we have surplus cash around

  • i'm unhappy i mean i would much rather have a good businesses in cash and and

  • uh...

  • we found a chance in the last year thereabouts to deploy weekly came and

  • with something over forty billion a camera and we've got about twenty

  • billion dollar and we've had some earning so we would put a lot of cash

  • for work

  • and i like that no i'd much rather out of the business

  • uh... that cash

  • hot and it is a hedge against the dollar

  • begins at all assets are edgy and set up a dollar on and that

  • all of you know is that the dollar is going to be worthless

  • ten twenty

  • thirty years from now ice a worth what's not working chellam notes left

  • but i think it will be a factor or special almost every person that i go

  • back over

  • the question is how much depreciate in value but cash

  • cash is not a place that uh... that-and why is it

  • well there's always gonna be worthless because will will be mo

  • put more of a man relation to the amount of goods and are moving there

  • and all of it

  • week if we drop

  • we dropped a billion dollars of cash and every household united states today

  • everybody feel very good

  • except the people invest in things that were denominated in dollars wheat

  • activity that will be no tendency

  • outdoor deflation and in this country over time or or virtually in attendance

  • to inflation

  • absolutely

  • well the conversation we've had

  • and never thought that i would sit with you and we'll talk about

  • a fifty one split

  • traffic lights blacktop right i mean this had to be a hard when or not i

  • think i had a lobotomy one night and i don't know why i did

  • dot

  • it it is not

  • is not natural for me but but it

  • it was needed to facilitate

  • the small shareholders of bien es up getting the same deal

warren buffet is here as you know he is perhaps the world's most respected

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B1 INT US cash country railroad dollar moving capital

Warren Buffett explains Purchase of Burlington Northern Santa Fe Railroad (April 1, 2011)

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