Over on Spend Matters affiliate site MetalMiner, my better half, Lisa Reisman, recently speculated about some of the reasons why Warren Buffet may have bought out the rest of Burlington Northern. For all you Berkshire groupies, the deal is particularly interesting, given it's the largest single investment the Sage of Omaha has ever made. But I digress. The crux of Lisa's argument is that the bet suggests an interesting hedge of sorts involving a long-view on commodities.
Specifically, Lisa opines that, "Buffett is signaling where he thinks dollars will get spent (e.g. on commodities)". To wit, "Instead of turning to gold, Buffett sees Burlington Northern as a growth vehicle to earn more on the billions in cash Berkshire has on its books carrying coal, wheat and other resources across the nation." Lisa also suggests that Buffet might be looking at rail as a lucrative long-term holding because of its fundamental underlying economics and also, perhaps, because rail transport fits in with the current interest in green.
In a similar vein, I'd also toss into the equation that if Cap and Trade legislation ends up passing, perhaps rail will look like an even more attractive option to companies looking to reduce their overall supply chain carbon footprint (and taxes) by cutting back on full truckload and LTL shipments. Over on Supply Chains Matter, Bob Ferrari shares another opinion summing up Buffet's argument that "In the case of railroads, it is the reality that the compelling forces leading to the eventual return of high fossil-fuel prices, coupled with alternative energy realities, will make rail the most efficient alternative for moving goods across the country". Which is perhaps an even greater reason to go back and examine your own domestic logistics, transportation and warehousing footprint given where new Federal Cap and Trade taxes and energy costs could potentially take us.