Buffett's caboose

Buffett: Warren Buffett's annual missive to Berkshire Hathaway's shareholders is out. Among the usual folksy nuggets, the Sage of Omaha notes that he funded Goldman Sachs , General Electric and others at the height of the crisis.

The $21 billion invested is now worth a quarter more and yields 10 percent annually. Short term at least, that's more than Buffett's bet on railroad Burlington Northern Santa Fe is likely to deliver.

Berkshire has deployed a similar amount of cash to buy BNSF - some $22 billion. It has also issued stock. That's why Buffett's latest letter is partly a primer for the 65,000 new shareholders the deal added to the half million or so that Berkshire already had.

Even Buffett, though, admits that the decision to buy BNSF in November was a "close one". The generous $34 billion price tag for the rail company's equity looked even higher from

Buffett's point of view because he paid partly in stock. He and his investing partner Charlie Munger like issuing shares "about as much as we relish prepping for a colonoscopy", the 79-year-old Buffett writes.

It's an expensive, long-term punt on a capital-intensive industry: Buffett at the time described it as "an all-in wager on the economic future of the United States."

Meantime the $21.1 billion invested in the past 18 months in Dow Chemical , GE, Goldman, Swiss Re and Wrigley - a combination of confidence-building injections and pre-agreed investments - has delivered more instant gratification. Those holdings are now on the books at $26 billion, and they throw off $2.1 billion of interest and dividends annually.

Of course, as Buffett notes in his letter, crisis opportunities don't come up that often. And Buffett made some of those deals knowing their success depended on the U.S. government bailing out the financial sector - which happened. That makes his comments about Berkshire not depending on "the kindness of strangers" a little disingenuous, especially given the firm's big holdings in financial firms like Wells Fargo .

On the other hand, Buffett is justified in claiming that Berkshire's financial conservatism - only marginally compromised by the BNSF deal - did make him one of the few suppliers of liquidity during the crisis. He took advantage, and for now those investments are shinier for his shareholders than his trains.