There’s a good, blustery ad up from Brian Hicks and the folks at Angel Publishing about Warren Buffett and his insider connections …
… connections that have not only helped him make big, profitable deals for his shareholders (including yours truly, so thanks for that), but that have enabled him to drive government policy to further his own aims.
Now, that bit is controversial and speculative — and while I know billionaires have a lot more access and input in the halls of government than I do, I have no idea whether or not there was any backroom dealing. But it doesn’t really matter — the hype about Buffett whispering in Obama’s ear gets your attention (that’s the point, after all), but the big picture trend that’s being teased is real, at least for now, and perhaps we can make some money from it if Hicks and his analyst, Jeff Siegel, are correct.
As you can imagine, Siegel and Hicks would like you to subscribe to the Power Portfolio newsletter to learn more — that’s the letter that used to be called Green Chip Stocks, back when alternative energy was a positive buzzword in the stock market (I assume it will be again before too long, these things go in waves) and he was touting microcap alt energy stocks like New Energy Technologies (NENE) and US Geothermal (HTM). Now, it’s all about oil.
So let’s see what the story is behind the hype this time, shall we?
First, a taste of the spiel:
“Warren Buffett’s $34 Billion Presidential BRIBE
“How the world’s greatest investor bought his own set of legal loopholes that could earn him — and YOU — 519% gains in the coming months
“In early July 2010, Warren Buffett made a controversial telephone call to the White House.
“The world’s most prolific investor needed a favor.
“At the time, Obama’s Press Secretary, Robert Gibbs, said, ‘He wanted to come in and see the president, and you don’t turn down the opportunity to talk to Warren Buffett.’
“And it’s true…
“Even the president of the United States doesn’t say ‘no’ to the second-richest American — especially when there’s a deal to be cut.”
And the “deal” that Hicks says was cut by Obama and Buffett was … to kill the permits for the extension of the Keystone XL Pipeline that is intended to help move oil from Canada and North Dakota South to Oklahoma and then to refineries (or maybe someday even export facilities) on the Gulf Coast. Hicks is not the first one to suggest this, plenty of folks have noticed that Burlington Northern Santa Fe, the railroad Berkshire Hathaway bought about three years ago, is the dominant rail provider connecting North Dakota to the world, and is poised to move a lot of that crude oil via tank car if more pipeline capacity isn’t added — and the spiel that railroads are going to profit from Bakken crude and Canadian production increases, partly because of limited pipeline capacity, has been in the mainstream investing press quite a bit as well.
There was an article in Bloomberg about a year ago … as well as an updated article just last week about how railroads have cut into the business of existing pipelines in the area (rail transport is more expensive than pipelines, but far more flexible — so they can ship to places where demand is greater and prices higher). There’s more coverage here about Berkshire’s plan to invest more in BNSF to increase capacity to handle this crude, which is helping to make up for the lower coal shipments that main railroads have seen over the last year or so — and that article also touches on something we wrote about a week or two ago, the huge demand for tank cars that has been building for a couple years, and that happens to benefit another arm of Berkshire’s octopus (they own Union Tank Car, one of the major tank car builders).
So yes, it’s a big