Berkshire Hathaway (NYSE:BRK-A) recently announced that it would buy Burlington Northern Sante Fe (NYSE:BNI) for $100 a share. The deal is a textbook example of Berkshire CEO Warren Buffett's investing prowess. Railcar loadings are one of his favorite economic indicators, and Buffett is buying a quality freight business at what data shows to be near the bottom of this deep contraction in economic activity. The "Oracle of Omaha" calls the pending purchase an "all-in wager on the economic future of the United States."
While I'm always impressed at Buffett's eye for value, I must admit that recently I have been taking my cues from a new rising star in the investment world. He's been using his influence to help usher in an economic revolution, all while net worth skyrockets.
Who is this savvy investor, the man who some (actually, just me) have dubbed the "Prognosticator of Nashville?"
Drumroll please ...
Depending on your political affiliation, the words "Al Gore" sound either pleasant or painful to your ears. But we would be wise to keep our eyes on what he is doing these days. After all, Mr. Gore was a major architect of the development of the Internet in the 1990's. His political opponents may snicker about claims of 'inventing' the Internet, but history shows that government policies directing Federal dollars toward technology research, as well as tax incentives for businesses, helped lay the groundwork for the tech revolution. Al Gore, like him or not, was an integral part of this effort.
Now, the former Vice President is one of the leading advocates of the Green Revolution -- a conscious government effort akin to the development of the Internet, aimed at making renewable energy and clean technologies a reality. Just last month, President Obama stood in Florida with executives from FPL Group (NYSE:FPL) and Florida Power and Light to commission the largest photovoltaic solar power plant in the country. On the occasion, Obama also announced $3.4 billion in Federal grants to help update the electric grid by funding more smart meters and better network management. This is another milestone in the shift to a green economy.
Put your money where?
As a private citizen, Al Gore can now put his money where his mouth is. According to a recent New York Times article, his venture capital partnership is invested in a small smart metering company that will benefit from the recently announced grants. In addition, Gore has stakes in companies making electric vehicles, solar power, and a carbon trading exchange. He stands to profit handsomely as the U.S. economy shifts to a less carbon-intensive platform. Some are even predicting that he will be the world's first "carbon billionaire."
But let's go back to Buffet, who is a billionaire, and who also has a green streak. His purchase of Burlington Northern is a vote of confidence in the Green Revolution. Railroads, as Burlington tells us, "move 40 percent of our nation's freight, but account for just 2.2 percent of all transportation-related greenhouse gas emissions." Buffett noted that in a fossil fuel-challenged world, rail has a competitive advantage over trucking because it is more fuel-efficient and greener. Even Norfolk Southern (NYSE:NSC) and CSX are already developing hybrid locomotive technologies. Coming legislation to reduce carbon pollution could accelerate that push.
Buffett is partially following the Gore investment thesis that carbon reduction will mean increased profits. A more unlikely pairing than the Oracle of Omaha and Mr. Inconvenient Truth is tough to imagine.
The revolution marches on!
Buffett and Gore are just two foot soldiers in this new green tech revolution. Big companies are also getting behind this massive shift in the economy. Conglomerates like General Electric (NYSE:GE) and Siemens are developing an array of green technologies in lighting, appliances, and battery technologies. Cisco Systems (NASDAQ:CSCO) and IBM (NYSE:IBM) are major players in managing smarter electricity infrastructure.
But these are big names that are widely followed, and their current size may limit their upside.
This is where the Rule Breakers team can help. By building a solid green portfolio, including some smaller and lesser-known green names, you will be on your way to profiting alongside Buffett and Gore. Currently, our team of analysts has identified three leading alternative-energy picks. If you'd like to read about those ideas and have full access to all of the team's recommendations free for 30 days, just click here.
Fool contributor Matt Hoffman owns no shares of any of the companies mentioned. Berkshire is both a Stock Advisor and an Inside Value selection, as well as a Fool holding. The Motley Fool has a disclosure policy.
