Comments on: The Forever Fund

By: Investing 101

Investing 101 — Mon, 16 Nov 2009 08:10:08 +0000

This is a great article on this recent acquisition that really made headlines. I’m a big WB admirer and I’ve been reading up everything I can about him. I think that his job gets harder and harder as he gets more and more money to invest. I’m convinced that the deal has a sound foundation. My only problem with it is that its price might have been a little high.

Then again another part of me is telling me that this is the greatest investor of our time that we’re talking about here. He probably sees something that eludes most of us, lol

By: matt

matt — Sun, 15 Nov 2009 23:25:06 +0000

Any chance of you doing portfolio updates going forward? I’d be curious to see if you still like investment grade fixed incomes, given the rally.

By: Jeff

Jeff — Sun, 15 Nov 2009 17:46:20 +0000

David — Thanks for a thoughtful, interesting, and humorous analysis. There are certainly many these days who are willing to say WB is wrong. Maybe they should be looking at the other railroads. I have had several on my watch list, but don’t own any at the moment.

By: FischerBlack

FischerBlack — Sat, 14 Nov 2009 06:07:26 +0000

Buffett has a history of profiting from government interventions, and I’d be willing to bet he knows something about how the current Administration is thinking about the problem of transport in the US. It isn’t a secret that Obama has a plan to implement high speed rail systems as part of the $787 billion stimulus earmark. When the acquisition closes, Buffett will own 24,000 miles of key trach from Chicago (Obama’s planned hub) to the Pacific.

How Federal stimulus money will be doled-out for this is anyone’s guess. But Buffett, at the very least, is now one of the key players in what may prove to be the biggest infrastructure build-outs since Eiasenhower.

Bottom-line, I think this acquisition may involve some strategic thinking that goes beyond BNSF’s cash flows.

By: jerry murphy

jerry murphy — Sat, 14 Nov 2009 04:07:41 +0000

David,

just finished reading Hugh Hendry’s Electica monthly(it’s on zero hedge)….i always find Hugh entertaining on CNBC Europe….was actually thinking of similarities between your “forever investing” vs his falling in love with long dated Treasuries(though only for a little while)

By: PaulinKansasCity

PaulinKansasCity — Fri, 13 Nov 2009 18:04:25 +0000

This is helpful. thanks David

By: maynardGkeynes

maynardGkeynes — Fri, 13 Nov 2009 16:39:45 +0000

Or you could do what Swensen did at Yale: invest most of it in illiquid, infinitely long term alternative assets that are worth whatever you say they are worth, because no one can prove you wrong. Then write a few popular investment books about your brilliant methods, and apply the royalties to make up for the shortfall in the income portion of the portfolio. When an exogenous market collapse prevents you from getting away with that scam any longer, take a page from your colleague at Harvard, Mohamed El-Erian, and cop a lucrative job with Bill Gross at Pimco. Then, sleep soundly, along with the rest of the investment advisory “profession.”

By: q

Fri, 13 Nov 2009 14:22:01 +0000

this is great. thanks.