Warren Buffett has pointed to rail carloads as the single indicator he'd take to a desert island, and for good reason. As the most efficient way to transport many kinds of freight between cities, ports, factories, mines, oil and gas fields, and other focal points of the economy, railroads allow investors to gauge how well the tangible economy is doing.
So when North America's Class I railroads put in resoundingly strong results in the third quarter, savvy investors should take that as a sign of confidence on the part of both producers and consumers. In the following video, Motley Fool analyst Daniel Ferry breaks down the railroads' excellent quarter, and how investors can play it.
