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Warren Buffett's Greatest Investments Of All Time

Burlington Northern Santa Fe

First Shares Purchased: 2009

Date Sold: Still Held

Amount Made: N/A

Percentage Gain: N/A

Burlington Northern Santa Fe was one of the greatest investments ever made by Berkshire Hathaway. Oddly enough, it does not seem that way on the surface. Buffett called this “an all-in bet on the future of America” but this was truly an all-in bet on Berkshire Hathaway. You have to recall that many had accused the Berkshire Hathaway empire of becoming a mutual fund rather than a conglomerate. This $34 billion cash and stock investment in the railroad company changed that perception forever. That is what made BNSF so valuable. When Berkshire Hathaway spilt its “B” class of shares so they became nominally affordable to more shareholders, it suddenly gained a larger shareholder base due to the BNSF holders sticking with the stock. Berkshire was added to the S&P 500 Index and to the Russell indexes. The new investors drawn to the stock because of these maneuvers drove gains on top of gains. You could argue that the post-merger impact gave BNSF to Mr. Buffett for almost free. As of December 31, 2009, Berkshire owned 22.5 percent of BNSF’s outstanding common stock. It said in its report at the time “our equity in net assets of BNSF was $2,884 million and the excess of our carrying value over our equity in net assets of BNSF was $3,702 million. Prior to February 12, 2010, we accounted for our investment in BNSF pursuant to the equity method.”

(AP Photo/Tony Gutierrez, file)

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