The Buffett factor seems to be fully priced into the prices of Burlington Northern. As the news of Warren Buffett’s purchases was widely reported, the stock of BNI did not go up, it actually went down with the general market.
Warren Buffett continues to add to his holdings with Burlington Northern Santa Fe Corp. (BNI). In 2007 he bought 1.6 million shares on 08/07, and 1.4 million shares from 8/15 to 8/16 at prices around $76.5 and $78.96. He bought 10 million more shares of Burlington Northern Santa Fe Corp. (BNI) from 8/23 to 8/27 at prices around $80. After the new year, he bought about 3 million more shares. As of today, Berkshire owns 63.7 million shares of Burlington Northern Santa Fe Corp, which is about 18.2% of the company.
In some of his purchases, Buffett used options to buy the stocks. It is interesting that Warren Buffett once said that derivatives are financial weapon of mass destruction. He has been using options to lower his purchasing cost of stocks.
With too much money in hands, Warren Buffett’s universe of investment choice is shrunken to large companies only. That is why he has been buying companies like Wal-Mart (WMT), Wells Fargo (WFC), US Bank (USB) etc. "I've got an elephant gun, I just can't find the elephant.” He said during an interview.
We have seen that Buffett is buying a lot more stocks these days than the past years. The recent market pullback, especially financial market pullback certainly gives him more opportunities. We will not be surprised if he makes big purchases again.
We will soon have the quarterly contest to best guess what Warren Buffett has bought during the fourth quarter of 2007. We do not know what stocks Warren Buffett is buying, but we know that he must be laughing as he sees the opportunities Mr. Market presents him these days.