Monday, March 03, 2008

A Bargain Purchase

From the 2007 BRK Annual Report...

For fun, lets do a fair "replacement cost" estimate on the 94,000 railcars alone.
94,000 x what.?

Made out of steel, the boxcar cost about $45000 a copy in 1980. A buddy of mine, says that $90,000 would be a fair price to pay for a mid-use rail car which can be depreciated over about 50 years.

94,000 x $90,000 = 8.46 Billion.... just in railcars alone. Furthermore, consider that the Marmon Group is composed of 125 different companies.

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