Warren Buffett, 79 years old and the world's biggest and smartest investor, today Nov 3, 2009, announced in a big way that his Berkshire Hathaway is acquiring Burlington Northern Santa Fe for $26 Billion. The detail of the transaction can be found here on CNBC. Berkshire will acquire the 77 percent stake in Burlington Northern Santa Fe that it doesn't already own for $100 a share in cash and stock. CNBC interviewed Warren Buffett on his reasonings on his latest and biggest deal as well as his take on the economy:

Our view:

• The acquisition will propel Berkshire Hathaway to be an even bigger conglomerate by owning the second largest railroad business in the US. To certain extend, the deal is a classic Warren Buffett's bet that the increasingly better and more efficient US rail road transportation business will likely outperform the US economic growth as businesses nowadays are continuously seeking more efficient and effective ways to deal with ever increasing transportation costs (think of expensive oil price per mile per day, if you use trucks instead of trains) during difficult economic climate.
• At the same time, with this deal, Mr. Buffet at his current age and success (he is still no.2 richest man in the US and the world) has shown to wall street and main street globally both his unwavering nationalism and unsurpassed prowess to do great deals even during difficult economic climate that likely will eventually make tons of money during slow-growth economic environment going forward. Mr. Buffett is likely focusing on his legacy and what he can do for his country (US) while still making decent long-term profits at the same time. 
• This does not mean prudent investors and traders should think that all the macro and micro problems and challenges the US economy and companies are facing now are things of the past. The economy is likely to grow very slowly on average over the long-term if not stagnant as companies and people are in the process of multi-years deleveraging. The road ahead for US and global economies will likely be uneven and full of potholes. Investors and traders should be extremely well-prepared for various sudden shocks and unpredictable volatility going forward. Remember Warren Buffett timeless advice: "Rule No.1: Don't lose money. Rule No. 2: Don't forget rule no.1."