Warren Buffett Acquires Major Railroad

Berkshire Hathaway acquired the remaining 77% of Burlington Northern stock at a price of $100 per share and has now, according to Warren Buffett, made an "all-in wager on the economic future of the United States". That has come as a positive sign to many monitoring the markets and the economy in general. The thought is that Buffett is making a long-term investment in Burlington Northern because railroads are one of the driving forces in the American economy. A great percentage of the goods and products that are sold around the country are transported via the rail systems.

Buffett's general temperament when it comes to buying stocks is that he's going to do it regardless of the overall economic climate. It doesn't matter to him or his company if the country is in a recession or a boom. They will always buy where they believe to be value and they will sell when they are satisfied with the return.

To that end, it's unlikely that Buffett's acquisition of Burlington Northern is signaling that the economy is about to gain a foothold and pick up steam. Quite the contrary. All the acquisition means is that Buffett thinks Burlington Northern is "worth" more than $100 per share and that it's value will increase over time to net his company a handsome profit as a result of the transaction.

For now, though, experts can point to the purchase and say that Buffett may be indicating a bottom to the economic troubles. And he may be, but that's not the point.