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By Jeremy Glaser | 11-03-2009 10:57 AM

Buffett's All-In Bet

Buffett's bet on the long-term strength of the American economy led him to finally deploy Berkshire's cash hoard.

Jeremy Glaser: I'm Jeremy Glaser with Morningstar.com. This morning Warren Buffett took an all-in bet on the U.S. economy by making a $100 per share offer for BNSF, a company that he already owned a substantial stake in. Here to discuss it with me is Berkshire analyst Bill Bergman and BNI analyst Keith Schoonmaker. Thanks for joining me, guys.

Keith Schoonmaker: Our pleasure.

Bill Bergman: Nice to be here, Jeremy.

Glaser: Why do you think that Buffett decided to go ahead and make this purchase today?

Bergman: Well, as you said, Jeremy, and as he said, it's an all-in bet on the economic future of the United States. Berkshire had built up a great deal of cash prior to the crisis, and has been employing the cash in a variety of different investments as the crisis developed, in the financial crisis and the economy, and the slowdown in the economy in recent years.

He's looking forward and he's putting his chips where his mouth has been. He's betting on the future of the United States. This is the biggest deal in Berkshire's history. It's bigger than GenRe, and it's a bet on the fundamental infrastructure of the economy in the United States, and a company that we like as well.

Glaser: So, Keith, do you think he paid a fair price?

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