It has been awhile since I looked at the railroads co. profiles, but I think I remember them as having high debt ratios and somewhat declining freight volume. I thought their stock prices a bit inflated too.
They seem to pay good dividends, and obviously, they're here to stay, so it isn't a bad investment.
As far as Warren Buffet is concerned, he made a lot of his recent money off of government mandated policies and bail-outs (insurance co., Goldman Sachs etc.), and he seems to have an "insiders" view, so my respect for him has waned a bit.
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