Take two leading candy companies, mix in $23 billion, and add in a pinch of investing guru Warren Buffett and what do you get?

How about one of the largest candy companies on the planet…

Closely held Mars Inc. – with a sweet $4.4 billion in debt financing from Buffett and Berkshire Hathaway Inc. (BRK.A, BRK.B) – will acquire U.S. chewing gum icon Wm. Wrigley Jr. Company (WWY), in a deal valued at $23 billion.

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"There’s really nothing that can go wrong with something like the Wrigley and Mars brands," Buffett, 77, said during an interview on the CNBC cable TV network yesterday (Monday). "People are eating more and more of their products every day."

Mars will pay $80 per share for Wrigley in an all-cash deal, which represents a 28% premium over Wrigley’s Friday closing price of $62.45. With the bid from Mars, Wrigley shares shot up 23%, gaining $14.46 each yesterday to close at $76.91.

Once the deal closes, Wrigley will become a separate Mars subsidiary.

"It’s a great price," Thomas Burnett, director of research at New York-based Wall Street Access, told Bloomberg News. "Nobody is going to pay more than that. Who is going to go up against Mars and Buffett?"

And there’s possibly a lot more to the deal, sources revealed late last night: By helping Mars buy Wrigley, Buffett may actually be helping himself: As one, big privately held entity, the merged Mars-Wrigley giant would be much easier for Berkshire to buy outright should the secretive family that runs the business ever decide to sell it, sources said.

Whither Hershey?

The Mars-Wrigley merger brings together two all-star confectioners. The Chicago-based Wrigley’s by itself has enough marquee brands to fully stock any candy counter, including the Juicy Fruit, Orbit and Eclipse gums, Life Savers hard candies and Altoids mints. The McLean, Va.-based Mars is vending-machine royalty in its own right, wielding such perennial winners as M&Ms, Twix and Snickers.

Despite their size, both are agile players. Wrigley, for example, is a globally focused innovator, even re-shaping its product portfolio to appeal to regional tastes and cultural customs as it moves into new markets all around the world. Last summer in China, for instance, Wrigley talked about how it combined its traditional products with concepts adapted from traditional Chinese medicine to create such new alternative "flavors" as "beauty" gum, "cooling" gum and "relaxation" gum. Wrigley ended up with a big hit: Despite a sluggish market here at home, such bold moves overseas allowed the company to deliver a 21% jump in profits for that quarter.

The deal could put pressure on Mars rival, The Hershey Co. (HSY), to resume talks about a possible merger with London-based Cadbury Schweppes PLC (CSG). The two candy-making firms have been in sporadic discussions for quite some time over a possible merger, but as yet have been unable to agree on terms.

Candy companies are facing higher raw ingredient costs as the prices of commodities continue to soar. Wrigley’s costs have remained more constant, as the majority of its products do not include dairy, cocoa, or wheat.

In addition to providing the debt financing, Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK.B) will make a minority investment in Wrigley valued at $2.1 billion. It’s believed that Buffett is getting a discount on the Wrigley stake.

A Look Inside Berkshire

Buffett favors companies that have a competitive advantage, offering products or services that can’t easily be replicated by rivals. Businesses like Mars and Wrigley, which have strong consumer brands, fit the bill, Jerome V. Bruni, president of J.V. Bruni and Co., a Colorado Springs, Col.-based investment banking firm, told the Dow Jones Newswires.

This move by Berkshire and Buffett is just the latest in a string of recent deals for the "Oracle of Omaha." Other recent investments include a stake in Kraft Foods Inc. (KFT) and GlaxoSmithKline PLC (GSK), Europe’s largest drugmaker.

Since taking over Berkshire Hathaway in 1965, Buffett has transformed the once-wheezing textile manufacturer into an investment vehicle that controls an amalgamation of more than 70 portfolio companies and that has a market value of $200 billion.

As of the end of last year, Berkshire owned 3.3% of Procter & Gamble Co. (PG), a consumer-products giant, along with big chunks of The Coca-Cola Co. (KO) and Anheuser-Busch Cos. Inc. (BUD).

Buffett already owns a high-quality confectioner – See’s Candies, a specialty West Coast chocolate-and-candy maker that was founded in 1921 and acquired by Buffett in 1972. Sales were $30 million and pretax profit was less than $5 million that year. In 2007, the San Francisco-based See’s earned $82 million on revenue of $383 million.

In his most recent letter to Berkshire shareholders, Buffett attributed such "extraordinary results" down to See’s "durable competitive advantage."

Indeed, See’s is representative of the kind of companies that Buffett likes to own – operations such as the Nebraska Furniture Mart, or Borsheim’s Fine Jewelry, which are highly profitable and display strong growth, yet somehow manage to maintain the "feel" of the old-time sole-proprietorship shops that used to occupy the downtown "Main Street" business district in every small town. See’s Candies is a really solid example of that kind of acquisition: Despite its growth, it still sells its confections from several shops it operates, but also does a huge mail-order business from its catalog, which – unlike most U.S. companies – it continues to offer for free.

Once the Mars buyout of Wrigley is concluded, Buffett will own a piece of the chewing-gum maker.

Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) will provide financing for the deal. The financing package consists of about $11 billion from Mars, a $5.7 billion senior debt commitment from Goldman, $4.4 billion in subordinated debt from Berkshire, and the $2.1 billion investment from Berkshire – payable at the time the deal closes, Dow Jones and others report.

When it comes to Berkshire, the one question that arises on an ever-more-frequent basis is that of succession – who will succeed the wildly successful Buffett? Berkshire claims to have such a plan in place.

[Editor's Note: Warren Buffett isn't the only guru whose advice has been consistently profitable over the long run. Retired financier and best-selling author Jim Rogers called the China boom more than a decade ago, and more recently predicted the global commodities boom. Read some of Rogers' most recent predictions, and then take a moment to see how you can get a free copy of his brand-new best seller, "A Bull in China." Also here - and free for you to download - is our most recent investment research report detailing Warren Buffett's most recent investment moves.]

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David Sokol, widely viewed as the leading candidate to eventually replace investing guru Warren Buffett as the chief executive officer of Berkshire Hathaway Inc. (BRK.A, BRK.B), is changing jobs.

Sokol announced that he plans to step down as CEO of the MidAmerican Energy Holdings Co., Berkshire’s utility unit. He will remain on as chairman.

Berkshire watchers are examining this move with great interest. Just ask Frank Betz, a principal with the Warren, N.J.-based Carret/Zane Capital Management LLP, who has played bridge with Buffett.

“I’ve been saying for three years that David Sokol is the obvious successor for Berkshire, and I may be dead wrong,” Betz told Reuters in an interview. “To me, it’s a clarion call [since Sokol] has very successfully run MidAmerican. It frees him from the day-to-day responsibilities of running MidAmerican to do whatever else might be on his menu.”

Berkshire Watchers – Watch Carefully

According to a recent study, buying what Buffett has bought – even a month after his purchases – is a pathway to superior returns. In fact, over the past three years, this strategy has delivered double the return of the Standard & Poor’s 500 Index, according to research by professors at both American University and the University of Nevada at Las Vegas.

Even with that one-month lag, an investor who mimicked the moves of this market master would eclipse the S&P 500 returns by 14.26%, the study concluded. [For more information, read the recent Money Morning investment research: “How Buying Like Warren Buffett Can Boost Your Portfolio Profits.” The report is free of charge].

When it comes to the game of “Who Will Succeed Buffett,” many investors right now have two specific candidates in mind – Sokol and Ajit Jain, a top Berkshire insurance executive.

Not that the 77-year-old Buffett has any plans to leave anytime soon – even though his net worth of $62 billion makes him the world’s richest person, according to Forbes magazine.

Even so, it’s key for any public company to have a succession plan in place, especially one with as remarkable a track record as Berkshire boasts. And Buffett himself has said that Berkshire has three internal candidates – including one who could step in immediately. Buffett says he would like any successor to be young enough to stay in the job for 15 years.

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Howard Buffett, Warren Buffett’s son, would likely become chairman. Four other candidates are in the running to become Berkshire’s chief investment officer, or CIO.

Thomas Russo, who helps invest $3 billion at Gardner, Russo & Gardner in Lancaster, PA, said it’s “too early” to draw any conclusions about what Sokol’s job change actually means.

“This is the first move affecting [someone on] the well-considered list of successors who is changing his day job,” Russo told Reuters.

Sokol told the Omaha World-Herald that ending his 17-year run as CEO of MidAmerican will free up time for him to work on acquisition deals. MidAmerican operates several utilities and natural gas pipeline companies, and runs HomeServices of America, the No. 2 independent U.S. real estate brokerage.

He said the change is unrelated to Berkshire’s succession plans.

“When somebody’s ready, they should get the opportunity,” Sokol, 51, told the World-Herald. “My 100% allegiance is to Berkshire and MidAmerican. I’m not going anywhere.”

Gregory Abel, who is MidAmerican’s president and runs its PacifiCorp utility, will replace Sokol as CEO sometime next month. Although MidAmerican is based in Des Moines, Iowa, Sokol works in Omaha, where Berkshire is headquartered. That gives him substantial “face time” with Buffett – no small consideration, management experts say.

A key reason that Sokol is considered a front-runner for Buffett’s seat is that many analysts regard MidAmerican as a “mini-Berkshire,” said Mohnish Pabrai, managing partner at Pabrai Investment Funds in Irvine, Calif. Pabrai models his portfolios on early Buffett partnerships.

Berkshire Hathaway operates as more like an “investment vehicle,” which buys investment securities and other companies – many of which are permitted to maintain much of their independence.

Since taking over Berkshire Hathaway in 1965, Buffett has transformed the once-wheezing textile manufacturer into an investment vehicle that controls an amalgamation of more than 70 portfolio companies. Berkshire has a market value of nearly $220 billion.

A recent Money Morning story detailed how Berkshire has recently taken an 8.6% stake in Kraft Foods Inc. (KFT), making it the foodmaker’s biggest shareholder. It also acquired a $76.1 million stake in GlaxoSmithKline PLC (GSK), Europe’s largest drugmaker.

But a company like Berkshire – with that many moving parts – can be difficult to run. So if MidAmerican already operates as a “mini-Berkshire” – and Sokol has demonstrated a talent for operating such a complex company – he might well be viewed as the leading successor candidate.

That perception probably boosts “the odds that [Sokol] is one of the three guys. He’s the perfect age and has the diverse experience. Jain is probably right there, if it happens soon,” Pabrai said.

Another Front-Runner

That’s because Jain was born in 1951, putting him close to the outer edge of an age range that would make him a viable candidate. On the other hand, Jain joined Berkshire in 1986, and both he and Buffett have said they talk to each other every single day.

Jerome Heppelmann, a portfolio manager with Liberty Ridge Capital in Berwyn, Pa., said Jain “has the expertise in Berkshire’s core business, insurance, and his stewardship has been superb.”

Jain handles coverage for “mega-catastrophes” such as Hurricane Katrina. He also runs Berkshire Hathaway Reinsurance, which provides insurance for other insurers.

That’s put him in the catbird’s seat to oversee a major Berkshire corporate project. In the past three months, Jain has spearheaded Berkshire’s drive to build a bond insurer from scratch as existing rivals such as MBIA Inc. (MBI) and Ambac Financial Group Inc. (ABK) have stumbled badly.

It was viewed as one of the shrewdest deals that Buffett and Berkshire have cut in some time. Buffett offered to assume responsibility for $800 billion of municipal bonds guaranteed by MBIA and Ambac. However, Buffett only sought out the most-profitable – and safest – portions of the companies’ municipal guaranty business. The offer excludes subprime-related securities, and collateralized debt obligations (CDOs).

And some analysts were honest enough to say that Buffett had negotiated a great deal for his company.

“I really don’t think this does much for anyone but Warren Buffett, as the thought of an insurer ‘giving away’ its best business and only means of surviving this mess in return for the rest of its ‘junk in the trunk’ should leave them cold,” Kevin Giddis, a fixed-income analyst at Morgan Keegan & Co., told CNNMoney.com.

So it’s no surprise that Buffett thinks highly of Jain. Indeed, in his shareholder letter this year, Buffett said Jain “has built a truly great specialty reinsurance operation from scratch.” Last year, he called that business “amazing.” In 2006, he called Jain an “extraordinary manager,” and the year before he wrote: “Ajit’s value to Berkshire is enormous.”

In each of his last three letters Buffett referred to Sokol and Abel as “terrific” managers, and in the previous two called both “brilliant” managers.

The Rest of the Pack

Investors have suggested top chief executive candidates for Berkshire also include:

• Joseph P. “Joe” Brandon of reinsurer General Re Corp.
• Tony Nicely of auto insurer Geico Corp.
• And Richard Santulli, of private airplane operator NetJets Inc.

But when it comes to their being considered as Buffett successors, all three of these executives face real drawbacks. Nicely and Santulli are in their mid-60s, which would seem to rule them out.

And Reuters reported that investors have also mentioned Brandon’s name less following a controversial reinsurance transaction that led last month to a federal jury convicting four former General Re executives on fraud and conspiracy charges. Brandon was not charged.

[For Money Morning’s latest investment research report on Buffett’s investment outlook, read: Now That Warren Buffett is Crazy About the Loonie, Here are Seven Ways to Profit From a Strong Canadian Dollar. The report is free of charge].

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For the 27th year in a row, Berkshire Hathaway Inc. (BRK.A, BRK.B) Chairman Warren Buffett received an annual salary of $100,000.

In addition, Buffett received no bonus or stock options for heading up one of the most successful investment vehicles in the world, as Berkshire Hathaway profit increased 20% in 2007 and had approximately $44 billion in cash and cash equivalents at year-end.

“This guy doesn’t care about putting the money into his own pocket, the money is his way of keeping score,” Guy Spier, who has about 15% of his Aquamarine LLC hedge fund in Berkshire shares, told Bloomberg News. “Of course, we don’t know what Warren’s private fortune is. He’s always run a separate pool of money, which could well be a billion itself, totally separate from Berkshire.”

Despite his low annual salary, for the 12 months ended Feb. 11, Buffett surpassed Microsoft Corp. (MSFT) founder Bill Gates as the world’s richest man with an estimated net value of $62 billion, according to Forbes annual list of the richest people.

Not only did Buffett only draw $100k for his duties as chairman, but the filing also disclosed that he paid Berkshire $50,000 as a reimbursement for any personal use of Berkshire postage, phones and personnel, Bloomberg reported.

And Buffett is not the only Berkshire executive to forgo a lavish compensation package.

“Neither the profitability of Berkshire Hathaway nor the market value of its stock are to be considered in the compensation of any executive officer,” the proxy said. “Berkshire does not grant stock options to executive officers.”

Vice Chairman Charles Munger also earned a $100,000 salary, while Chief Financial Officer Marc Hamburg took home $712,500, a 7.5% increase over his 2006 pay.

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Berkshire Hathaway Inc. (BRK.A, BRK.B) Chairman Warren Buffett yesterday (Thursday) paid his first visit to South Korea, where the billionaire U.S. investor has invested in 20 companies, including a 4% stake in the country’s Number One steelmaker, POSCO Ltd. (PKX), South Korea’s Yonhap news agency said.

In an email interview with Seoul-based Maeil Business Newspaper Sunday, the billionaire said South Korean stocks are still attractive, despite some analysts’ concerns that they may be overvalued.

"The Korean stock market a few years ago was by far the most undervalued market in the world," Buffett told the newspaper. "Since then, there has been a huge advance in the Korean market and the [Korean] won has appreciated against the dollar. Nevertheless, many Korean stocks still sell at more attractive prices than stocks in other major countries."

Buffett is the world’s second-richest man, with assets of $52 billion, according to Forbes magazine. His last major investment foray involved U.S. railroad companies.

[Editor's Note: Warren Buffett may well have just wised up on South Korea's potential, but we detailed that promise months ago. If you'd like to read our 6,000-word research report, “The Three Best Investments in Asia Today,” which includes detailed insights on Korea and other key markets, please click here. The report is free of charge.]
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"At present Bear is not holding talks about the sale of a stake to anyone," CNBC reporter David Faber said.
Bear Stearns shares fell as much as 3.4 percent immediately after the CNBC report before closing at $121.15, down 1.5%, or $1.85 per share, on the New York Stock Exchange.

Battered by the collapse of two hedge funds and a disruption in its fixed-income trading, Bear Stearns is seen as relatively weak when compared to other U.S. investment banks, Reuters reported. An outside investor is seen as way to bolster the company.

Bear Stearns shares jumped almost 7.5% Wednesday after the New York Times reported that the investment bank is in talks to sell a minority stake to investors, including Warren Buffett.

The firm is in "serious" talks with several outside investors and could sell as much as 20% of itself, the newspaper said, citing unidentified people briefed on the discussions. Other investors who have expressed an interest in investing in Bear Stearns include Bank of America Corp. (BAC), Wachovia Corp. (WB), and two China-based institutions, the Citic Group and China Construction Bank, the Times reported.

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  Warren Buffett’s Berkshire Hathaway is Riding the Rails Again.

By William Patalon III
And Jason Simpkins

Warren Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK.B) – on a railroad kick since early this spring – has purchased 6,000 more shares of Burlington Northern Santa Fe Corp. (BNI), the latest in a series of significant railroad-share purchases made by the Omaha investment firm.

Berkshire Hathaway purchased the shares of the No. 2 U.S. railroad on Thursday, bringing total ownership to nearly 53 million shares – equal to about 15% of the company, according to a new Securities and Exchange Commission filing. In that Form 4 SEC filing, the Buffett-led Berkshire reported that it bought the shares for $79.97 apiece on Thursday. Burlington Northern shares closed yesterday at $81.56, up 67 cents each.

In that same SEC filing last week, Berkshire reported that it has options to acquire another 7.85 million shares of Burlington. If all those options are exercised, Berkshire’s total ownership stake in Burlington would climb to 17.2%, according to a CNNMoney.com report.

Berkshire reported in an SEC filing last week that it has options to buy 7.85 million shares of Burlington Northern. If the company exercises all the options, it would increase its stake in Burlington Northern to 17.2%. The 15% stake Berkshire already owns is worth more than $4.3 billion.

Berkshire paid $39.10 for each option with an exercise price of $40 per share, CNNMoney.com reported. That means the company could acquire the Burlington Northern shares at a cost of $79.10 each, well below yesterday’s closing price of $81.56 a share. The options give Berkshire until Oct. 3 to decide whether to exercise them. But the company can also extend that deadline by a month to Nov. 2 by paying an additional premium.

The options reported last week are apparently in addition to 7.46 million more that were reported by Berkshire in a Sept. 4 filing with the SEC. Those options, also, expire on Oct. 3.

Warren’s Been Working on the Railroad(s)

The so-called "Oracle of Omaha" has been on a major railroad-buying binge since April, when Berkshire Hathaway made its first move on Burlington Northern. In a series of highly publicized moves, Buffett & Co. acquired nearly 40 million shares, or close to 11% of the railroad. Berkshire also snapped up 10.5 million shares of Union Pacific Corp. (UNP), and 6.4 million shares of Norfolk Southern Corp. (NSC).

At the very end of August, investors learned that Berkshire boosted its holdings in Burlington Northern by 2.5 million shares. SEC filings said he also bought a block of 6.8 million shares on Aug. 23 and Aug. 24.And we now know from filings with the U.S. Securities and Exchange Commission (SEC) that Berkshire bought a total of 6.8 million more shares on Aug. 23 and Aug. 24.

On Aug. 27, Berkshire went shopping again, loading on an additional 3.3 million shares at $80 each. Its total stake in Burlington now stands at nearly 53 million shares.

While there’s no telling just what, specifically, prompted Berkshire to move so aggressively into the railway sector, Buffett has been one of the shrewdest U.S. investors over the past five decades, so there are a few things to consider …

Buffett Basics

When it comes to successful investing strategies, mimicking the moves of a professional investor with a long-term record of success can be a shrewd move of your own.

Berkshire Hathaway, once a New England textile mill, became the holding company and financing vehicle for all of Buffett’s other investments: GEICO Insurance, newspapers, furniture, jewelry and chocolate-candy companies; and major holdings in such firms as Wells Fargo & Co. (WFC), and Coca-Cola Co. (KO). [Indeed, for a book review of the very best Warren Buffett biography out of the many published, please click here].

As a stock, over long periods, Berkshire has been a perennial top performer. Over the past year alone, Berkshire Hathaway’s "A" shares are up 25%, compared to about 14% for the Standard & Poor’s 500 Index. And over the long haul, the difference is even greater.

As a long-term investor who often views himself as a "partner" of the firms that he buys into, Buffett has long favored very basic businesses that are easy to analyze and understand. Some of his favorite sectors include basic industrials, financial-services, and consumer-goods firms. For the most part, he’s steered clear of high-tech companies.

There are as few things as simple, sturdy and time-tested as railroads. A six-year old with an MTH, Lionel or HO-scale train set could tell you just what a railroad does. And for an investor such as Buffett, an asset-intensive business like a railroad is likely a joy to analyze financially.

Buffett on ‘Value’

That last point is particularly important because Buffett also looks for "value," although his definition of the term is much more liberal than his mentor, the late Benjamin Graham, in determining just what constitutes a "value," or bargain, stock. Graham used a rigid, math-based methodology to ferret out stocks that were trading at a steep discount to their true net worth – thus providing a "margin of safety."

Buffett uses those techniques, but has proven masterful at valuing such intangibles as a product line, a specialized customer base, the value of a franchise or brand name, or a dominant market position, which he likens to having a "toll" booth in place on thoroughfare that travelers have to use.

Railroads are definitely not fast growing – and largely unknown – small-cap companies trading at steep discounts to their actual net worth. They’re not even trading at super-favorable Price/Earnings (P/E) ratio. But railroads do meet several of Buffett’s investing criteria:

• With their massive capital investments in rights-of-way, railways, rolling stock and locomotives, the railroad industry has the high "barriers of entry" that Buffett favors. Let’s face it: John Henry, The Steel-Driving Man, isn’t going to help hammer down any new railway lines anytime soon.
• The majority of railroad technology has remained unchanged for the last 50 years to 100 years, so there’s little chance of some new discovery that could come along and "leapfrog" the existing know-how, rendering the current railways obsolete and bankrupt. [The chance of being "leapfrogged" is one of several reasons that Buffett has traditionally avoided technology-oriented companies].
• The odds are excellent that the current industry giants will remain industry giants. If anything, with the current trend toward consolidation in virtually every major global industry, the roster of large railroad companies may get even smaller.

Railroads Benefit from Global Shipping Boom

Buffett clearly sees that there is also a strong business case for railroad stocks, right now. For one thing, these giants are seeing a growing number of imports coming into the West Coast from Asia. There is a considerable need for the products in question to be dispersed throughout the country, and long-haul trucking, which has been the traditional solution, may be losing favor.

Industry labor shortages, tightening regulatory restrictions, and rising gas prices will likely give railroad companies an advantage over trucking. Ray Kuntz, president of the American Trucker Association, recently said in an interview with the Independent Record that demand for drivers keeps increasing, and finding and keeping good people is a perpetual challenge. "One problem," Kuntz said, "is that people can’t legally drive [tractor trailer trucks] until they’re 21, and many potential candidates have chosen other work by then."

Another problem is America’s weakening infrastructure. The recent bridge collapse in Minnesota was a very tragic illustration of the disintegration of the U.S. highway system, bridges, water-and-sewer systems and other key components of the nation’s infrastructure. Indeed, the Minneapolis bridge was just one of 73,518 "structurally deficient" bridges across the country that state and federal inspectors have deemed to be in need of significant repairs. The nation’s highways are decaying faster-than-planned, too, due in no small part to heavy traffic that overburdens the roadways.

Then there are high fuel costs. Even if trucks are stuck in traffic they’re still on the road and burning fuel. "Congestion costs the industry $8 billion a year, and it’s growing at 8% to 10% per year," Kuntz said.
The situation has forced the trucking industry into a serious dilemma. It has been forced to lobby for higher fuel costs. Yes, you heard that correctly.

As Kuntz put it, "Our industry is ready for a fuel-tax increase, [the proceeds of which will be used to finance infrastructure upkeep and repair]. We believe it has to happen before our infrastructure gets in worse and worse shape and congestion costs get higher and higher. It’s pretty evident that if we don’t do something, we’re headed for big problems."

U.S. diesel prices have more than doubled in the past five years, according to the energy department, and with mounting concern about global climate change, more efficient trains should end up pulling more weight.

With an abundance of West Coast rail terminals – and railroad tracks covering two-thirds of the country – Burlington Northern enjoys a big advantage in shipping imported Asian wares to markets all across the United States. In fact, many of the big shipping containers coming into U.S. ports are delivered to shore and then placed directly onto Burlington Northern flatbed railcars. Over the past four quarters, the company’s cash flow has totaled nearly $900 million.

In an Aug. 31 filing, Berkshire told the railroad of its plans to increase raise its stake in the company to 25%. That would require the purchase of another 35.4 million shares, currently valued at $2.9 billion. That kind of purchase would depend on "market conditions," according to the notice provided to Burlington Northern.

Another Way to Play "Buffett Stocks"

Companies that Berkshire takes such a liking to normally experience a rush of popularity among the investing masses, whether it’s sustained or not. In this case, it might not be a bad idea tag along for the ride, even if you want to ditch the rest of the bandwagon jumpers for a quick profit.

There’s another way to follow Buffett’s lead and profit – without purchasing the exact same companies, since they’ve already run up in price on the news of Berkshire’s involvement. The strategy: Invest in companies that will benefit from the same trends fueling "Buffett stocks."

In this case, for instance, the "Big Idea" is shipping, and the gains that shipping-related firms have made thanks to the flood of imports from Asia.

In our sister publication, the monthly Money Map Report, we’ve uncovered just such a bargain stock. But it won’t remain a bargain for long. And, if you sign up now, we’ll also give you, free of charge, a copy of another of our investment research reports, "The Coming Big Money Bang" which chronicles a confluence of capital that will see $867 billion flowing through the capital markets in the months to come.

Our global research analysts have identified four companies, in particular, that are poised to benefit from this global trend, which is being fueled in a big way by all the growth we’re seeing in China, but which is creating profit opportunities throughout the world – including here in the U.S. market.

Forget about the subprime mortgage mess, and the resultant global credit crunch, because here are four companies we’ve identified that will benefit from "The Coming Big Money Bang."

Those companies include:

• A financial institution so tied into Asia’s booming development that we’ve nicknamed it "The One Stock You Can Retire On."
• A commodities-related company with ties to both agriculture and biotechnology whose product is provided by so few firms that it’s actually "more precious than oil."
• A power-provider involved in a $40 billion energy venture that’s central to China’s continued ability to grow.
• And a telecommunications company whose technology has the potential to revolutionize both Internet Video and VoIP telephony. Unlike other tech wannabes, however, this company also has the managerial talent to pull it off.

To access our free research report, and to find out how you can get all the information you’ll need to learn about these four investments our analysts have highlighted – as well all you’ll need to know about The Money Map Report and the up-and-coming shipping global shipping company we just mentioned as the perfect "Buffett-type stock," please click here. You’ll be glad that you did.

Related News and Story Links:

• Forbes.com News Report:
  
  Berkshire Hathaway Buys More RR Shares.

• CNNMoney.com:
  Berkshire Buys More Options for Burlington Shares.

• High-End Model Railroading Wares:
  MTH/RailKing Railway.

• Massive Railroad Histories Index and Articles Index:
  
  Railroad Histories Up to 1935.

• Money Morning Free Investment Research Report:
  The Coming Big Money Bang.

• High-End Model Railroading Wares:
  
  Lionel 2007