The FT summarizes Warren Buffet latest deal: Burlington Northern (BNSF) very well.
Bankers said the BNSF take-over was typical of Mr Buffett: a deal at a low point in the economic cycle for a group with few rivals in a sector set to benefit from long-term trends such as rising oil prices and stricter environmental standards.
This is his biggest bet ever but also a classic display of operating within his circle of competence.
Everyone should try to develop his/her circle of competence and update that circle continuously to stay relevant. Most of us will do this outside of investing and perversely will maintain a circle of ignorance. Some will pass it to financial advisers, who sadly live in a circle of ignorance too.