Since 2006, Microsoft co-founder Bill Gates has been buying shares of Canadian National Railway, which was privatized in 1995. This week, the Financial Post reported that Gates has upped his combined holdings in Canada’s largest railroad to 12 percent, worth about $4.7 billion.
Gates holds most of the stake through his Cascade Investment LLC of Kirkland. Another 1.89 percent is owned by the Bill & Melinda Gates Foundation Trust. Friend Warren Buffett purchased the Burlington Northern Santa Fe in 2010. If you and I have a railroad jones, we set up an HO-scale layout in the garage (no cheap hobby). The rich are different. They just buy the real thing.
Seriously, Canadian National is a good investment, having pushed its network into the United States with the acquisition of American railroads, especially the 1998 deal for the Illinois Central. It has among the most impressive numbers for major North American railroads, far better than struggling Canadian Pacific, which lost a proxy battle with activist investor William A. Ackman.
Canadian National also serves the port of Prince Rupert, a major competitor for Seattle and Tacoma, with the shortest sailing time from much of Asia’s export hubs. In addition to container traffic — and thanks to the IC acquisition, a straight shot to the U.S. heartland — CN carries export coal to terminals at Prince Rupert as well as Vancouver.
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Today’s Econ Haiku:
The proud green Northwest
Wants its slice of coal exports
Help toast the planet