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The Thesis
Buffett called it 'an all-in wager on the economic future of the United States,' buying America's largest railroad at the depth of the Great Recession.
The Story
In November 2009, in the aftermath of the worst financial crisis since the Great Depression, Warren Buffett made his largest-ever acquisition: Berkshire Hathaway purchased Burlington Northern Santa Fe railroad for $44 billion. It was a massive, concentrated bet on the American economy at a time when many were questioning whether the country's best days were behind it. Buffett described it simply as "an all-in wager on the economic future of the United States."
The railroad proved to be a phenomenal business. BNSF generates billions in annual earnings, benefits from nearly impossible-to-replicate infrastructure (try getting permits to lay 32,000 miles of track today), and serves as an essential artery of American commerce. By the 2020s, BNSF's annual earnings alone exceeded the original purchase price. The acquisition exemplified Buffett's evolution toward buying entire businesses with durable competitive advantages, and his unshakeable optimism about America's long-term economic trajectory. It also demonstrated that the biggest fortunes are made by those willing to bet big on their country during its darkest hours.
Key Insight
Bet on your country during its darkest hour — irreplaceable infrastructure assets are the ultimate expression of long-term optimism.
“In the 20th century, the United States endured two world wars, a dozen or so recessions and financial panics. Yet the Dow rose from 66 to 11,497.”
Warren Buffett
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See how Glen Bradford applies these principles to his own investing. Long Fannie Mae & Freddie Mac junior preferred — conviction meets patience.