Comments on: First Initiative Blog Post! http://blog.sterniag.com/2009/11/04/first-initiative-blog-post/ where the weekend starts Thu, 02 Sep 2010 22:56:19 -0400 http://wordpress.org/?v=2.8.5 hourly 1 By: neha http://blog.sterniag.com/2009/11/04/first-initiative-blog-post/comment-page-1/#comment-9 neha Thu, 05 Nov 2009 19:41:55 +0000 http://blog.sterniag.com/?p=28#comment-9 Don't forget the boost in trade activity from expansion of panama canal http://www.economist.com/businessfinance/displaystory.cfm?story_id=14807131 Don’t forget the boost in trade activity from expansion of panama canal
http://www.economist.com/businessfinance/displaystory.cfm?story_id=14807131

]]> By: Ken Chen http://blog.sterniag.com/2009/11/04/first-initiative-blog-post/comment-page-1/#comment-8 Ken Chen Thu, 05 Nov 2009 17:27:38 +0000 http://blog.sterniag.com/?p=28#comment-8 Ken - I'm not sure if China factors too much into it, because they're trying to transition to a service-based economy just like us, meaning fewer manufactured "solid" goods. It won't be a radical change as of yet but it is happening. I do agree that there never will be more or less than 4 major railroads, because it's highly unlikely they'll ever approve a merger between any 2 oft hem. Avi - Hm, that's a good point. I didn't know that it had exclusive access to the mine over UNP. There are a few advantages to UNP though, namely that they're growing their miles of track very quickly which may lead to an advantage if volume increases significantly. An interesting thing he pointed out was that rail was one of the few industries that could never be outsourced, or have to compete with outsourced prices. Which is interesting because there aren't a whole lot of industries like that at all. Ken – I’m not sure if China factors too much into it, because they’re trying to transition to a service-based economy just like us, meaning fewer manufactured “solid” goods. It won’t be a radical change as of yet but it is happening. I do agree that there never will be more or less than 4 major railroads, because it’s highly unlikely they’ll ever approve a merger between any 2 oft hem.

Avi – Hm, that’s a good point. I didn’t know that it had exclusive access to the mine over UNP. There are a few advantages to UNP though, namely that they’re growing their miles of track very quickly which may lead to an advantage if volume increases significantly.

An interesting thing he pointed out was that rail was one of the few industries that could never be outsourced, or have to compete with outsourced prices. Which is interesting because there aren’t a whole lot of industries like that at all.

]]> By: avi http://blog.sterniag.com/2009/11/04/first-initiative-blog-post/comment-page-1/#comment-7 avi Thu, 05 Nov 2009 14:53:47 +0000 http://blog.sterniag.com/?p=28#comment-7 Ken I think you need to add 1 big topic to your analysis. COAL. Buffet realizes that coal is a major energy source in the United States and will become more widely used in the years to come not only in the United States but also abroad. Consider the fact that power plants are trying to utilize clean coal technology to fire up its turbines. In addition I know for a fact that India is currently constructing at minimum 50 new coal power plants. Burlington Northern has direct access to the largest coal mine in the United States. Furthermore as you said since it is well connected to the ports in the west. What this means is that Burlington Northern is positioned to benefit from the huge coal trade that is undoubtedly coming and is currently developing. I believe Buffet bought Burlington Northern because it gives him great exposure to commodities especially coal. Ken I think you need to add 1 big topic to your analysis. COAL. Buffet realizes that coal is a major energy source in the United States and will become more widely used in the years to come not only in the United States but also abroad. Consider the fact that power plants are trying to utilize clean coal technology to fire up its turbines. In addition I know for a fact that India is currently constructing at minimum 50 new coal power plants. Burlington Northern has direct access to the largest coal mine in the United States. Furthermore as you said since it is well connected to the ports in the west. What this means is that Burlington Northern is positioned to benefit from the huge coal trade that is undoubtedly coming and is currently developing. I believe Buffet bought Burlington Northern because it gives him great exposure to commodities especially coal.

]]> By: Ken Barkett http://blog.sterniag.com/2009/11/04/first-initiative-blog-post/comment-page-1/#comment-6 Ken Barkett Thu, 05 Nov 2009 07:27:07 +0000 http://blog.sterniag.com/?p=28#comment-6 I'm sure Buffett realizes that trade with China and Asia in general is going to continue to increase over the next 20-50 years. This is very important for BNI because UNP and them are the only two railroads with rail access to the Port of LA, and it is highly unlikely that enough capital would ever be available to build another railway into LA. I’m sure Buffett realizes that trade with China and Asia in general is going to continue to increase over the next 20-50 years. This is very important for BNI because UNP and them are the only two railroads with rail access to the Port of LA, and it is highly unlikely that enough capital would ever be available to build another railway into LA.

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