Is It Time to Buy the Buffett Stock That Buffett Can't Buy?
In 2010, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) made its biggest acquisition in its history at the time, acquiring the railroad Burlington Northern Santa Fe (BNSF).
The move surprised Buffett watchers, as it was Berkshire's first foray into the railroad sector. Buffett acted opportunistically, making the bulk of the purchase in 2009, during the depths of the financial crisis while the stock was down.
However, looking at Berkshire's investment in BNSF, which paid off handsomely, it fits with the classic Buffett approach. Railroads like BNSF enjoy high barriers to entry thanks to the massive capital costs involved in operating one, and the industry has become a well-defined oligopoly at this point. There are no start-up railroads.
Source Fool.com
