BNSF Railway - Investment Thesis

Strategic Importance

"BNSF is a vital artery of commerce in America."

Buffett identified railroads as having significant competitive advantages:

• High barriers to entry — It's nearly impossible to build a competing railroad
• Pricing power — Railroads effectively set their own prices
• Economic moat — The extensive network creates a durable competitive advantage

The "Elephant" Acquisition

In early 2009, during the financial crisis, Buffett saw an opportunity:

• BNSF's

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