Burlington Northern (BNSF) / Buffett Interview Transcript

Matthew Rose, CEO of Burlington Northern Santa Fe Corporation, which is about to be bought by Berkshire Hathaway, conducted an in-house interview with Warren Buffett about the pending acquisition.  BNSF filed the transcript of the interview as a 425.  This excerpt in particular planted a little seed in my head:

MKR:  Okay, next question.  In 10 years, how will you evaluate the acquisition of BNSF, whether or not it's been successful?

WB:  Well, I -- I'll measure it against my own standard, which is that I have made a bet on the country doing well.  And if I'm wrong on that, that's my fault and not anybody at BNSF's fault.  But i will look at how it does compared to other railroads.  I'll look at how railroads are doing versus trucking and all of that.  But in the end, I don't really worry about that very much.  I, I've seen what's been done here.  I think I know how the country is going to develop.  I think the west is going to do well.  I'd rather be in the west than in the east.  So I really don't have much of a worry about that.

That last little part caught my attention as I stared out my window towards the east side of Manhattan.  Why does he think the west will do better than the east?  It's a multi-decade grand thematic kind of question, not the business-specific kind Buffett usually addresses.  And I'm not sure how easy it is to predict these kinds of things.  I doubt many in 1979 were predicting that New York, then near-bankrupt, would soon re-emerge as the capital of the universe.  On the other hand, as early as the late 1960s political scientists were forecasting a population shift towards the Sun Belt, and that turned out to be true.  Maybe Buffett's prediction is a continuation of that prediction.  Maybe it's a prediction about the continued rise of China, or it has something to do with being long commodities.  I don't know.

I come from a people who like to wander.  Sometimes we've chosen to wander and sometimes others have chosen for us, if you know what I mean.  I was born in a different country (Australia) than my sister (South Africa), and we were both born in different countries than our parents (Israel and France), who were themselves born in different countries than their own parents (Lithuania, Translyvania, South Africa and South Africa again).  But we arrived in the Unites States when I was about three and except for thousands of trips across the Hudson River and back, we've more or less stayed put ever since.  Until recently it never occurred to me to live anywhere else.

But if you come from a family like mine, and you're interested in how to preserve and grow wealth over long periods of time, then you know that neither money nor people can count on staying put forever. 

Disclosure: Long Berkshire Hathaway

Comments

[nick gogerty]

OK, I take one serious exception with this otherwise great article. "New York as the center of the universe". New York burned brightest in 1953-60 when the US GDP dominated the GWP.
NYC has a little shine, but resembles more the center of the galaxy which is supposed to have a black hole at its center. even during the net bubble NYC played the role of 2nd rate paper pimp. In the noughties with AIG, Bear, lehman, GM Building and Mackelow etc. NYC as a power center is interesting, but so was liverpool in insurance. NYC is more a tired windbag letting outs a last gasp before hopefully re-inventing itself as Tokyo or detroiting itself.

New York is ranked 50th on the unhappy states in the US. The consiligiere knows that all things are transient and changing and even this generation of bright young things while in awe of itself is really just replaying the past the past tunes with new instruments. There is no center of the universe but many who percieve themselves to be so.

Ehtnocentric biases about one's home are beneath the consigliere. New York is interesting and entertaining but far from the center of the universe. One of NYC biggest sins is it overindulged self belief in it position on the world stage. It is a world city in size and stature, but lacks in transportation, cleanliness, education, safety and other things which many other cities have in spades. A few platinum institutions and citizens do not make a place the center of the universe.