The Daily Scott Scheper

600 West Broadway, Suite 700
San Diego, CA 92101

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No. 99

A writing piece from Scott P. Scheper.



No. 99

From:
San Diego, CA 92101
Wednesday, 2:24 pm

Dear Reader,

In Omaha, Nebraska a sweet ol' secretary named, Gladys, does two things: First, she prevents any outside distractions from disturbing her boss. Second, she stocks the fridge with Cherry Coke.

Many of you know who this mysterious boss is: Warren Buffett.[1]

I share many of Buffett's philosophies about work and life; however, I find his working style most influential. Elon Musk's working style is 20 hours of chaos. Warren Buffet's working style is reading and sipping Cherry Coke.

Last evening I was outside on my balcony. I was overlooking the ruggedly beautiful city of Downtown San Diego. The beauty of the scene is subjective. But one thing is not subjective...

THE HELLISH DISTURBANCE THAT ERUPTS EVERY NIGHT AFTER NINE O'CLOCK!

I'm referring to the monstrous train painted orange that begins rumbling the town. Stopped cars wait and stack up, forming around corners.

Dressed all in orange this monster train inches along for thirty minutes. The train is very loud for the entire duration. If I'm with a person, we can't hear each other talk. We either wait or go inside.

I tell you about this not to bitch.[2] I tell you because last night I noticed something for the first time. Painted on the side of the train stood four large letters. They were painted in black: "BNSF".

This name sounded familiar from a book I've read.[3]

I recalled the analogy of the following investment principle: The best companies are like an unregulated toll bridge. You have relative freedom to increase rates whenever and however you want.[4]

I looked up "BNSF" and it turns out my memory was correct.[5] I had read about this company before. I was reminded that it's the largest railroad network in North America.

With 8,000 trains BNSF generates $20.1 billion in annual revenue.[6]

Here's what this means...

The orange monstrosity is not a train. It's a tollway bucket. It's filled with products from companies who drop coins into it every day.

There are 8,000 buckets (aka 8,000 trains). Each one collects $7,000 in tolls every day, totaling $56 million. All of the coins make their way to one toll booth. Guess where it's located?

In an office stocked with Cherry Coke in Omaha, Nebraska...

And the only attendant is busy reading.


Sincerely,
image Signature of Scott P. Scheper San Diego

Scott P. Scheper



Footnotes:
  1. https://en.wikipedia.org/wiki/Warren_Buffett ↩︎

  2. Although this nightly event is annoying, and more, even though trains are annoying, I wear earplugs most of the time. This helps me focus while reading. If I'm not wearing earplugs, I'm probably wearing Apple AirPods. ↩︎

  3. Schroeder, Alice. The Snowball: Warren Buffett and the Business of Life (p. 675). Random House Publishing Group. ↩︎

  4. “Warren likens owning a monopoly or market-dominant newspaper to owning an unregulated toll bridge. You have relative freedom to increase rates when and as much as you want.” Lowenstein, Roger. Buffett: The Making of an American Capitalist . Random House Publishing Group. ↩︎

  5. However, for the sake of maintaining my memory's humble regard, I remind it of the following: The human memory sucks. So much so that a special section is dedicated to it in the domain of cognitive fallacies: https://en.wikipedia.org/wiki/List_of_cognitive_biases. Oh, and to pile on... I'm probably not even recalling properly how or why I'm able to recall BNSF in the first place! ↩︎

  6. $20,180,000,000 in annual revenue, that effectively means every orange train monstrosity generates $2,522,500 annually. By slightly rounding up, that's $7,000, which has more sex appeal than $6,910.96 (or does it!?); Revenue Figures: https://www.bnsf.com/about-bnsf/financial-information/pdf/rail-financials-4q-2020.pdf; 8,000 locomotives: https://en.wikipedia.org/wiki/BNSF_Railway ↩︎


Sincerely,

Scott P. Scheper