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Why Warren Buffett is buying Burlington Northern (BNI)
By: John Mugarian   Thursday, September 13, 2007 1:38 PM

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Let us examine a few reasons why the world's greatest investor is buying Burlington Northern (BNI). Does Mr. Buffett know something we don't? You can bet he does! Since Burlington Northern doesn't qualify under the normal investment parameters that Mr. Buffet uses, why is he so interested in accumulating 25% the stock? Here are some of Buffett's parameters before buying a company; 1) Buffett identified the average rate of return on equity of American companies at 11%, and basically said he would not consider buying a company with an ROE of under 14%. Burlington Northern ROE 2010- 11% as projected by Value line*** 2006- 13% 2005-13.5% 2004- 11.6% 2003- 9.1% 2002- 9.6% On the other hand, Coca-Cola's (KO) ROE looks like this; 2010- 32% as projected by Value line*** 2006- 31% 2005- 31% 2004- 31.5% 2003- 34% 2002- 34.7% This being said, what does Buffett know that you don't? Globalism & The North American Union 1) Burlington Northern is a Ft. Worth, Texas based railroad that strategically lies in the middle of the NAFTA super highway. It even goes thru his home-town of Omaha!
Burlington Northern will be a big beneficiary of shipping goods from Mexico to the United States and Canada. Last week, I reported that President Bush, Canadian Prime Minister Stephen Harper and President Felipe Calderon of Mexico to put the finishing touches on the “Security and Prosperity Partnership” (SPP) agreement, which essentially merges the United States, Canada and Mexico into one entity.
Have you been wondering why? 1) Our borders to Mexico are still wide open? 2) NAFTA has resulted in millions of lost US jobs? 3) The Senate passed the amnesty bill S. 2611 which will add 100 million people to America in the next ten years (Dr. Robert Rector of the Heritage Institute). 4) CAFTA (Central America Free Trade Agreement) was passed? Now you know why Warren Buffett is so interested in Burlington Northern (BNI). He knows a lot more about the push towards open borders and globalism than the average investor. Buffett also bought stock in Norfolk Southern (NSC-6,362,800 shares), and Union Pacific (UNP-10,513,100 shares).

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The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.
  
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