If you follow financial news, or any news for that matter, you know what happened this morning. Warren Buffett's Berkshire Hathaway a href="http://finance.yahoo.com/news/Berkshire-buying-Burlington-apf-3016566039.html?x=0amp;.v=18"agreed to buy Burlington Northern/a. He already had a large stake (I believe around 20%), but this is a massive bet on the US economy. It really is classic Buffett. If you've read my blog at all, you know I'm bullish on railroads, and have felt BNI is the best out there. I don't own any shares, so I missed out on this one. Buffett isn't stealing it, but it will likely look like a good purchase five years from now. br /br /In other news, a href="http://finance.yahoo.com/news/Berkshire-Hathaway-OKs-50for1-apf-323762915.html?x=0amp;.v=5"Berkshire agreed to split /atheir "B" shares 50 to 1, which is a big departure for them. br /br /Buffett is clearly trying to make a statement here, and likely wanted another "signature purchase" (like ...

In my opinion, the market action seems to have a downward bias to it now. In the past few months, anytime negative news would come out, the market would dip, only to see bulls push through and move the market higher. Right now, it feels like the opposite. Earnings haven't been making big headlines and economic data is carrying more weight, as is the apprehension of investors and fear that stocks are overextended. br /br /Small caps are getting hit hard. They are the most volatile and have moved the a lot to the upside during this rally, so their sell off comes as little surprise. I have a few names on my radar that I may pick at if prices continue to improve. I know I've been saying that for sometime, but I'm a very patient investor.br /br /I do think that things ...

I always keep track of the railroad earnings as I still think they are a pretty good primer for the rest of the economy. I know there are others, but this is just one that I follow. So, Union Pacific reported this morning. More of the same...Revenues still down double digits, profits helped by cost cutting (a href="http://finance.yahoo.com/news/Weak-economy-sends-UPs-3Q-apf-1278070157.html?x=0amp;.v=6"release/a). I've highlighted a couple key areas. br /br /blockquoteUnion Pacific Corp. said Thursday its third-quarter profit fell 26 percentbr /as shipping demand remained weak and the overall economy stabilized.br /br /The nation's largest railroad couldn't offset lower shipping volumes,br /though it benefited from significantly lower fuel costs, improved productivitybr /and other cost-cutting measures. Union Pacific operates 32,400 miles of track inbr /23 states from the Midwest to the West and Gulf coasts.br /br /The Omaha company said Thursday it earned $517 million, or $1.02 per share,br /down from ...

Quick, name me a few companies that have grown revenue and net income year over year. Having trouble? Me too. Here's one. Diamond Offshore Drilling. I've written about them occasionally over the past few quarters. They operate in a very profitable industry, and to me are about the best in that industry. Here's a brief snippet from the a href="http://finance.yahoo.com/news/Diamond-Offshore-3Q-profit-up-apf-905257113.html?x=0amp;.v=1"release/a:br /br /blockquoteContract driller Diamond Offshore Drilling Inc. on Thursday said third-quarter earnings rose 17 percent as rising crude prices drove up demand from oil companies for more drilling services. As the economy showed signs of recovery in the third quarter, crude oil prices stabilized, trading as high as $76 per barrel, well above a 2009 low of $46.73 per barrel in February. Diamond Offshore's quarterly earnings climbed to $364.1 million, or $2.62 per share, from $310.5 million, or $2.23 per share, during ...

Now that I own some Pfizer stock (due to the acquisition of Wyeth), I feel obligated to at least post on Pfizer's earnings. (a href="http://www.marketwatch.com/story/pfizer-reports-26-higher-profit-but-lower-sales-2009-10-20"marketwatch/a) br /br /-The world's largest drug maker posted net income of $2.88 billion, or 43 cents a share, compared with $2.28 billion, or 34 cents a share, for the same quarter in 2008.br /br /-Excluding various items, Pfizer would have reported adjusted earnings of 51 cents a share, versus 62 cents. This year's quarter was also impacted by a higher tax rate, due largely to its merger with Wyeth.br /br /-Revenue in the period fell 3% to $11.62 billion, from $11.97 billion.br /br /-Pfizer was expected to report lower year-over-year sales, with the loss of patent protection for such former blockbusters as Norvasc and Zyrtec weighing heavily on its top line.br /br /-Still, Pfizer's sales results managed to top Wall Street's expectations. According to a ...

Caterpillar reported quarterly results this morning. I like to keep an eye on companies like Cat due to their cyclical nature and I feel they can give us a tell on if the economy is improving. They beat estimates, which were laughable. Sales and profits are still substantially down, and they are selling the hope, just like many others. Here are some quotes from the a href="http://www.bloomberg.com/apps/news?pid=20601087amp;sid=aUXMwIFXBil8"Bloomberg article/a.br /br /blockquote“We believe the third quarter marked the low point for Caterpillar sales and revenues in what has been the toughest recession since the 1930s,” Owens said in the statement. “We are seeing encouraging signs that indicate a recovery may be under way.”br /br /The company narrowed its 2009 forecast range to $1.85 to $2.05 a share, from $1.15 to $2.25. The average estimate was $1.48 a share and the highest prediction was $1.75. The revenue forecast is now $32 billion to ...

David Einhorn of Greenlight Capital is someone I'm always eagerly listening to. He is very intelligent and manages money for a living. As I've said many times, the people that are intelligent and have their own money on the line are the only ones I truly listen to. Believe me, there are very few of them. But Einhorn is one of them.br /br /a href="http://blogs.reuters.com/rolfe-winkler/files/2009/10/einhorn-vic-2009-speech.pdf"Here's the text of his speech today/a at the Value Investing Congress. I got this via a href="http://blogs.reuters.com/rolfe-winkler/"Rolfe Winkler's blog at Reuters/a. There's a lot of great stuff in here.br /br /br /Here's just one good quote, about gold:br /br /blockquoteI have seen many people debate whether gold is a bet on inflation or deflation. As I see it, it is neither. Gold does well when monetary and fiscal policies are poor and does poorly when they appear sensible. Gold ...

I made a small purchase at the end of the day Friday. Its a small company called TII Network Technologies (a href="http://finance.yahoo.com/q?s=TIII"TIII/a). They supply products in the DSL, surge protection, and VOIP arenas, amongst other things. a href="http://finance.yahoo.com/q/pr?s=TIII"Click here for a full profile/a.br /br /I'm just looking strictly at value on this one. It trades at less than half of its current book value. They have nearly 11M in cash, and for a company with only 16M market cap, that is a pretty good safety net if the economy doesn't recover as quickly as some predict. Like most companies, revenues are down year over year, but operations are improving.br /br /Now is the time to scoop up values in companies like these. I'm finding more opportunities in small cap names right now. The large cap stocks are followed so closely and bought by so many funds. I just can't find ...

Well, earnings season has officially kicked off. Google and IBM reported after the close yesterday. Last quarter, these two were really the drivers that kicked the summer rally into high gear. They both reported solid numbers again, but its a little different story today. Google is trading higher, but it wasn't enough to lift stocks today. We also got results from lumbering giants Bank of America and GE, both of which weren't taken as great. br /br /It will be interesting to see if investors continue to buy every dip, which has been the case lately. The next catalyst appears it will be economic data or just more investors gaining faith in this market as we climb the "wall of worry." br /br /I have stocks out there I'd like to buy, but again feel many portions of this market have come too far, ...

Pfizer completed its $68 billion dollar acquisition of Wyeth today. It amounts to $33/share in cash and 0.985 shares of PFE per share of WYE. As a holder of WYE for a couple of years, I have some mixed emotions about the deal. Wyeth is a good company and could continue to provide solid returns for years to come, so in that respect, I'm disappointed. So now I have to find another stock to provide those returns on the capital I had invested. Can Pfizer provide that? That is what I need to figure out at this point. I'm typically not a fan of companies that grow through massive acquisitions. I'd prefer companies to buy smaller companies that you may not have to pay full value for. br /br /Wyeth shares cease trading at the bell today. I'll probably follow up on ...