UNP: Buffetted Out Of Our Bearish Position on Union Pacific
Warren Buffett’s Berkshire Hathaway (BRK.B) has disclosed a greater than 10% stake in Burlington Northern Santa Fe (BNI). Through three insurance subsidiaries (Columbia, National Indemnity, and National Fire & Marine) Berkshire beneficially owns 39,027,430 shares of Burlington Northern common stock according to an SEC filing made on Friday, April 6, 2007….
This is the biggest single common stock investment made by Berkshire in a long time.It’s big news – and it seems to have caught most Buffett watchers off guard.
The news sent shares of all the railroads higher, and made our put options on Union Pacific – with a $90 strike price – look a bit foolish. So we sold them. You may recall that the original position was taken because we felt that the railroads were losing some of the strong pricing power they have enjoyed recently.
You win some, you lose some. And we lost that one.
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