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Warren Buffet doesn’t like crypto and streetcars

I have a great deal of respect for Warren Buffet. Much of what I know (or think I know) about investing has come from listening to and watching him and his partner Charlie Munger. Surely they have got to be the most successful investors living today.

But there are some things that I don’t always agree with them on. The first and most obvious one is crypto. Warren thinks it is speculative rat poison and I think it is the future of the internet. I understand where he is coming from in that it does not produce cash in the same way as say a farm or an apartment building. But that doesn’t mean it won’t have value.

The second one, as I have learned today, is maybe streetcars. As a rule, Warren doesn’t typically engage in local politics. But he recently decided to break that rule through a letter he wrote to the editor of the Omaha World-Herald, lobbying against a new $306 million project that I believe is going ahead regardless.

Here’s an excerpt from the letter:

“Residents can be far better served by extended or more intensive service by the bus system,” Buffett wrote. “As population, commerce and desired destinations shift, a bus system can be re-engineered. Streetcars keep mindlessly rolling on, fuelled by large public subsidies. Mistakes are literally cast in cement.”

I should, however, be clear that (1) I know nothing about Omaha and this streetcar project, and (2) “streetcars” can be nuanced. There are streetcars that compete with car traffic and have short station spacing, and there is light rail transit on its own dedicated tracks and with farther station spacing. One size does not fit all.

Here in Toronto, we have lots of the former and they generally move you around at the slowest possible speeds. Sometimes it is faster to just walk. But we are also getting a new light rail line next year and that should move much faster. I can also tell you that when I worked in Dublin many years ago, I took their Luas to the office every day and loved it.

Again, I don’t know the specifics of Omaha’s streetcar project. Maybe Warren is right or maybe he is wrong. And that’s why I was careful to say “maybe” above. But I do know that in the right urban contexts and when done well, I am a fan of light rail transit.


  1. Myron Nebozuk

    I adore the streetcars of San Francisco and Budapest. I hate the LRTs of Edmonton and Calgary. The reason for the hate-on was best expressed by a former mayor of Edmonton: if you are travelling on a LRT train, it is a “bridge” to your destination. However, if you are travelling in a car perpendicular to the tracks, it is an “insurmountable moat”. I have experienced that moat, specifically in the form of wait times that can be 10 to 15 minutes long.


  2. AM

    I’m with Buffet on that one. Streetcars are 19th century technology that doesn’t belong in the modern city. He’s right in saying that a well designed bus system would be more efficient and flexible, think the many bus systems that exist in Latin America and function like at grade subways (Metrobus in CDMX for example).

    Light and heavy rail transit is really about image and broadcasting to the world what the city is about.

    But if one think about the future of mobility, it really is about facilitating all modes of transportations (from the electric scooter to the subway) and allow them to coexist as peacefully as possible, not building white elephants that no one will use for decades.


    • I hear what you are saying completely. LRT tends to have higher capacities than BRT and I think that there are customer experience differences too. I much prefer getting on a train than a bus.


      • AM

        It’s been a while since I was in CDMX, but the Metrobus experience was pretty awesome in my book. It really felt like a train running on rubber tires.

        We really have to ask ourselves if we are more interested in posturing about transit (e.g. building very visible and capital intensive projects), or moving people as effectively as possible. Given the nosedive that public transit has taken during the pandemic, it’s a very important question to answer.


  3. A BRT is faster and cheaper to build, although the operational subsidies tend to be higher due to having more operators. So you save on the front end and pay on the long end. Trams also bring economic development along their corridors, provide smoother rides, and are generally better at getting people to leave their vehicles at home. I don’t know much about this individual project, but Buffet seems to be a bit off on this one.


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