As Alice Schroeder writes in "The Snowball," Buffett has been "slightly obsessed with trains" since childhood and loved model trains. While at Columbia Business School and Graham-Newman Corp., Buffett analyzed mentor Benjamin Graham's portfolio of railroad stocks and bonds.
So when Buffett first bought into BNSF a few years ago, he had been studying the industry for more than a half-century. The deal to buy the rest of BNSF came together in less than two weeks. Many people remark on Buffett's unusual ability to size up deals so quickly, but in reality he's been studying the economics for decades.
The railroad acquisition is just the latest example of Buffett's early-life experiences carrying over into later business decisions. As a child he delivered copies of The Washington Post and sold individual cans of Coca-Cola. Now Berkshire has a huge stake in both companies.
When Buffett was 10, Schroeder writes, his father took him to New York City. There, he met an executive with Goldman Sachs who treated him kindly. He never forgot that gesture. And now Berkshire has a $5 billion stake in the Wall Street firm.
It's a similar story with GEICO. The insurer was a favorite stock of Graham's, and Buffett owned stock in the company at a young age. He visited the firm while in school and spoke with an executive about the industry. And now Berkshire owns GEICO.
It's a remarkable story of one person's lifelong passion for business that has enabled childhood obsessions to be transformed into lucrative realities.
William Freehling, who owns Berkshire Hathaway "B" shares, is a business writer for a newspaper in Virginia. He closely follows the moves made by Warren Buffett and his company. He has read widely on Buffett and the billionaire's beliefs on value investing. Bill can be contacted at freehling@hotmail.com
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User Comments:
1. Tkervin says on Nov 04, 2009 at 2:38 PM:
Do you ever feel you are being buried in Buffett articles? Pretty soon writers will be sifting through his trash looking for story lines........:-)
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2. Cowboy77 says on Nov 04, 2009 at 3:00 PM:
Doesn't Neil Young (Crosby, Stills, Nash & Young) own a toy train company like Lionel? If you have the cash you can indulge your childhood obsessions. If that's the case, I'd have to buy Raquel Welch. She's probably a bit long in the tooth for that takeover.
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