This is the tenth in a series of twelve posts. The introduction to the series is here. By way of review, these are my notes of Warren Buffett’s responses to questions from Notre Dame and Stanford MBAs on October 9. 2007.

Which railroads do you like and why?

Rails had a bad century—just like the Cubs.  Rails used to have 1.5 million employees.  They are getting more done now with only 200k employees.  Competition ruined the business.  Excess capacity is a terrible thing.  Rising oil prices hurts truckers 3-4x more than rails.

RR business just eats up capital (not good).  Coke vs the bottlers.  I’m in the right one.  RRs use too much capital to ever be great.

There is a slight advantage for the West Coast in terms of future growth prospects.  I like them because they are bigger and easier to put more money in.

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