Berkshire Hathaway's recent investments in the rail sector are creating what some argue are rare mini-bubble dynamics. Is Warren Buffett, Mr. Buy and Hold himself, creating unintended short-term consequences for railroad stocks?
NEW YORK ( TheStreet) -- The Warren Buffett bubble in railroads has burst twice already; is it going to be punctured again before year-end?
That is the question being posed by UBS Investment Research, and which led to a downgrade on Union Pacific ( UNP), judged by UBS the most expensive stock in the rail sector. The rail industry has outperformed the S&P 500 by 10% since Berkshire Hathaway ( BRK.A) announced its acquisition of Burlington Northern ( BNI) on Nov. 3. The two previous Buffet investments triggered a spike in rail shares , which in turn was shortly thereafter followed by the rail sector giving back half of those gains.