How to Invest in Railroad Stocks

Warren Buffett was once asked what his single most favorite economic indicator was, and he chose freight car loadings -- data that's freely available from the Association of American Railroads. Buffett's choice speaks to the critical importance of the railroad sector to the economy, and to the idea that an investment in the railroad industry is a vote of confidence in the U.S. industrial economy. It's a notion that Buffett obviously shares, because he described his acquisition of railroad BNSF as a "bet on the country."

If you feel like Buffett about the North American economy (don't forget Canadian railroad stocks), and you're looking for stocks with a strong business moat, then the railroad sector might fit the bill. Here's all you need to know about investing in railroad stocks.

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