Canadian National Railway is Bill’s largest investment of nearly $1.4 billion, representing 37.7% of Cascade Investments portfolio and 5.8% of CNI. Railroads have been a hot area for superinvestors, and with good reason. Rail transportation is more cost effective than truck transportation. Warren Buffett, Bill's good friend, owns Norfolk Southern (NSC), Union Pacific (UNP), and Burlington Northern Santa Fe (BNI). CNI is putting up good numbers. In the first quarter of 2007, it returned 20% on equity, far better than the industry average of 14.7%. CNI is a keeper. As of March 31, 2007, CNI represented 37.71% of Cascade Investments' portfolio (31.5 million shares worth $1.4 billion), or 6% of CNI. This is his largest position. Cramer and Altucher Discuss Gates, Buffett, and Icahn bets on railroads Listen to Cramer and Altucher Video on big investments in railroad stocks

RSG’s largest competitors are Allied Waste (AW), Waste Industries (WWIN), and Waste Management (WMI). Of the four, AW appears to be the best value, with a PEG of 1.54 and a P/S ratio of 0.84, compared with 1.85 and 1.95 for RSG. I’d substitute AW for RSG to improve on Bill’s portfolio. RSG is a Florida based waste disposal company. As of March 31, 2007, RSG represented 20.56% of Cascade Investments portfolio (27.1 million shares worth $756 million), or 14% of RSG. Top competitors are WWIN, WMI and AW. Waste Disposal Stocks Have Outpaced the Broader Market - Yahoo Finance, June 25, 2007 Market cap: $6.14 billion Gross Margin: 37% P/E: 23 PEG: 1.88 Based on PEG and P/S ratio comparison, AW appears to be the winner. I'd swap AW for RSG.

This is an example of Peter Lynch’s philosophy of looking for trends in your neighborhood. TV not only is gigantic in and of itself, it also had an investment in Univision, which was sold in 2006. But Televisa is having problems. That sale was dilutive to earnings – not a good thing. Some affiliates suffered losses. Televisa reported weaker earnings in the first quarter of 2007. Sometimes portfolio positions stay around too long. I don’t care what Cascade holds – I’ll pass on this one. Dominant TV broadcaster and producer in Mexico, with 70% of Mexican prime time audience. Zacks analyst thinks 2007 will be difficult year because of new government regulations. The sale of TV's stake in Univision was dilutive to earnings. There were losses in some affiliates, and Mexican taxes increased. As of March 31, 2007, TV represented 15.75% of Cascade Investments portfolio (19.5 million shares worth $579 million), or 4% of TV. Telvisa reported weaker results for 1Q 2007. Major competitors in Mexico are all private. They are: Cisneros Telemundo TV Azteca Mexican antitrust officials question Televisa's acquisition of cable TV operator Cablemas.

PNM, an energy and gas transmission company based in Albuquerque, New Mexico, represented 5.72% of Cascade Investments portfolio (6.5 million shares worth $210 million), or 8.5% of PNM, as of March 30, 2007. PNM is a regional utility play, paying a 3.3% dividend. Its competitors include American Electric Power (AEP), El Paso Electric (EE), and Excel Energy (XEL). PNM’s 15.65 PE and 1.38 PEG are lower than its competitors, as well as lower than the industry average. With a payout ratio of 51%, the dividend looks safe. PNM has traded between the mid 20s and the mid 30s for the past 2 years. If you’re looking for a utility stock with a safe dividend and the potential for modest price appreciation, PNM is a good choice. I’d keep it. PNM Resources, Inc. and its subsidiaries operate in energy and energy-related businesses. It primarily engages in the generation, transmission, and distribution of electricity, as well as in the transmission, distribution, and sale of natural gas in New Mexico; and focuses on the sale and marketing of electricity in the western United States. The company also provides regulated transmission and distribution services in Texas. In addition, it provides energy and technology related services, as well as sells energy to wholesale markets. As of December 31, 2006, PNM Resources had a generation capacity of approximately 2,638 megawatts. It provides electricity primarily to residential, commercial, and industrial customers. The company was founded in 1917 and is based in Albuquerque, New Mexico.

Otter Tail Corporation is an electric utility company in Fergus Falls, Minnesota, represented 2.38% of Cascade Investments portfolio (2.5 million shares worth $87 million), or 8.6% of OTTR. Full disclosure: I owned OTTR since the early 1990s in a Dividend Reinvestment Plan. Ending up with close to a 400% gain, OTTR more than fulfilled my goal as a steady dividend provider with modest upside potential. That’s right – I bought it for the dividend but got all that capital gain in return. I sold OTTR as part of my plan to liquidate all my DRIPs. Would it still fulfill my goal? OTTR pays nearly a 4% dividend. With a PE of 21 and a PEG north of 4, it’s more than fully valued, especially compared with the 17 PE and 2 PEG average for electric utilities. I’ll stick by my decision to sell OTTR and avoid it in my Better Than Bill Gates Portfolio.

SIX is a theme park operator, including Magic Mountain in New Jersey. Jim Cramer interviewed Six Flags CEO, Mark Shapiro, on May 11. The first quarter results for 2007 were impressive, with a 7% increase in attendance. Per capita guest spending increased 7% as well, another good sign. SIX is spending $10 million on modernizing their theme parks, training and recruiting their staff, and trimming unnecessary expenses. But don’t claim victory yet on this one, because the first quarter only represents 5% of yearly revenues. The real action is between Memorial Day and Labor Day. SIX was trading at $6.10 on May 11, virtually unchanged in mid July. The results won’t really be known until mid September, when the summer season is factored in. The video convinced me that management is doing the right things. I see SIX as a good speculative play, especially compared with Cedar Fair (FUN), a troubled theme park rumored to be a buyout candidate. As of March 31, 2007, SIX represented 1.67% of Cascade Investments portfolio (10.2 million shares worth $61 million), or 10.8% of SIX. Woman Sues Kentucky Six Flags Over Daughter's Severed Feet - July 13, 2007 Six Flags Guest Approval Rating Hits All Time High - Thestreet.com, July 12, 2007 Cedar Fair (FUN) Might Be A Substitute for SIX Six Flags, Inc., through its subsidiaries, operates as a regional theme park company. It owns and operates regional theme, amusement, and water parks in North America. The company's theme parks offer thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. As of December 31, 2006, it operated 27 parks. The company was founded in 1961 and is headquartered in New York, New York.

In the first quarter of 2007, FSCI returned 2.7% on common equity, compared with the industry average 8.3%. FSCI has been trading in a narrow range, between the low 40s and low 50s, for the past 4 years. FSCI pays a 0.5% dividend, just enough so that they can say that they pay one. FSCI appears to be neither a growth nor an income story. With nothing in the horizon to drive either, I pass on FSCI. As of March 31, 2007, FSCI represented 0.6% of Cascade Investments portfolio (455,000 shares worth $22 million), or 5.2% of FSCI. FSCI owns TV and radio stations in Washington state (including KOMO TV in Seattle), Oregon, Idaho, and Montana. Healthy quarterly revenue growth of 10.2%. Gross margin (65%) better than BLC (60.6%) or TRB (50.1%). Relatively small ($450 million market cap, compared with $7 billion for TRB and $2.17 billion for BLC. Trading near its 52 week high of 51. Competitors: Equity Broadcasting - Private BLC - Belo Corporation TRB - Tribune Corporation

Even though Cascade owns a ton of it, I'm not going to analyze BRKA vs Cascade because it would require doing the homework on each position in BRKA. Some day I'll do a "Better than Warren Buffett" portfolio similar to this one. As of March 31, 2007, BRKA represented 12% of Cascade Investments portfolio (4050 shares worth $441 million), or .26% of BRKA Some links, if you want to do your own Better Than Warren Buffet Portfolio: Warren Buffett's portfolio Mock Buffett Portfolio, tracks performance. Berkshire Hathaway Directors Portfolio Buffett Railroad Plays Who Will Berkshire Buy Next? Next Berkshire Portfolio Berkshire Investors Group (BIG) Portfolio