2007: The Year in Warren (The Final Countdown)
"Don't count out Warren Buffett."
That's how I began my post one week ago as I launched our '2007: The Year in Warren' countdown, going from #10 to #6 of the top 10 trends and events of the year, as covered here on Warren Buffett Watch.
That was before Buffett showed us again why you can't count him out, as he turned what should have been an uneventful holiday week into a whirlwind of activity.
So, slightly delayed, but fortified with new material, here comes the 'final countdown' from #5 all the way to #1.
#5 RIDING THE RAILS
Warren Buffett placed a big bet on a railroad this year, picking up shares of Burlington Northern in a series of purchases that has Berkshire owning almost a fifth of the freight carrier's outstanding stock, with the possibility of going to 25 percent or more.
It's not a sector-wide bet, in keeping with Buffett's preference to buy with laser-like precision rather than broad sweeps. Even as he was buying Burlington, we learned he was selling shares of two other railroads: Norfolk Southern and Union Pacific.
Burlington fits the classic Buffett model: a well-run, simple-to-understand industrial company that will benefit from the better economic times Buffett knows are coming back sooner or later. The railroad's protection from competitors, who would have to spend a lot of time and money building new tracks, is also a key factor, as it is in many Berkshire investment decisions.
#4 - LEAVING MONEY ON THE TABLE
#4 BUFFETT DUMPS PETROCHINA
Warren Buffett has said that his favorite holding period is "forever." So, it isn't surprising that there were a lot of questions about why he was slashing Berkshire's stake in PetroChina over the summer and early fall. One obvious explanation: a profit of $3.5 billion on an investment of $500 million made four years before.
But some human-rights groups, who had been urging Buffett and others to divest as a Darfur protest against Chinese business ties with Sudan, thought he might have been listening to them. Even the Wall Street Journal appeared to be leaning toward that explanation.
But when he was asked by FBN's Liz Claman, Buffett said it was "100 percent a decision based on valuation."
Score one for Mark Mobius, who kept buying as PetroChina kept rising, and as Buffett kept selling. The final victory, however, is yet to be declared. PetroChina shares are down from their highs for the year in late-October, although still above where they were as Buffett was getting out.
#3 - "I'M NOT TAXED ENOUGH!"
#3 BUFFETT'S CAMPAIGN TO TAX THE SUPER RICH