The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. NEW YORK ( ETF Expert) -- In March of 2008, I talked about Warren Buffett's increasing financial interest in transportation companies like Burlington Northern Santa Fe ( BNI). It served as a "lead-in" to the notion that the iShares DJ Transportation Index Fund ( IYT) could tell you when the U.S. economy might heal. Similarly, the folks at Morningstar recently mentioned that Buffett acquired the second largest railroad corporation outright in Feb. 2010; they also used the Oracle of Omaha's financial interest as a segue for a discussion on diversifying with Transportation ETFs. I agree with Morningstar that it is better to utilize an exchange-traded fund that represents a key sector, rather than make a bet on an individual company. Even Buffett can shoot the wrong elephant. However, the valuation-oriented Morningstar seemed to ignore the possibility that Transportation ETFs are expensive. For example, IYT tracks the Dow Jones Transportation Index -- a benchmark that currently trades at an estimated 19x forward earnings. The Dow Industrials? Its Forward P/E is more attractively priced at 12.3. Granted, FedEx ( FDX) shares bounded higher March 18, 2011, after its CEO expressed confidence that it would beat current expectations for 2011. Yet it's also true that the company had earned 3% less than it had in its previous third quarter. And yes, rail firms like CSX Corporation ( CSX) and Union Pacific ( UNP) should both benefit from the worldwide demand for coal in power generation. Yet both of these companies may have ongoing liabilities vis-a-vis asbestos or hazardous spills. So how do you decide? In truth, if this market had been banking on valuations, large-caps would be kicking the "beetlejuice" out of small-caps. But they're not. In spite of an enormous premium paid for owning small company stocks over large company stocks, the "risk-on" investor community is still betting on small. Similarly, "transports" have had momentum over the last six months... much the same way that small-caps have enjoyed. That said, transports have been struggling a bit lately. Here are the year-to-date performance numbers for several Transportation ETFs: In truth, as long as an exchange-traded vehicle like IYT remains above its 200-day moving average, you can probably board the train. If IYT falls below this trendline due to additional "aftershocks" to the global economy, consider a speedy departure.