WorldCom scandal

Yeah.

Let's look at the WorldCom scandal from the early 2000s.

I mean, they were a massive telecom company, right? Handling like half of all global Internet traffic at one point.

But they were secretly hemorrhaging cash.

Right.

The tax code allows you to spread that cost out over a long period.

So what WorldCom as CFO Scott Sullivan did was take ordinary operating costs specifically, the routine leasing fees they paid to other telecom networks, which they just called blind costs.

And he simply reclassified them on the books as capital expenditures.

Yes.

Look at Sears, Enron, WorldCom.

Those were all considered great companies.

Enron was the one that was in the front of business magazines and that was held up as the great example.

You just put your money away to the extent you could.

And then it became, oh, I bought Qualcomm, oh, I bought WorldCom, oh, I bought, right? So it became, and I realized that if you have the gambling gene in you, you will find it.

And so an acquaintance of mine at Harvard was a day trader, right? Day trading is for fools and experts, and they're one and the same often.

And he was day trading and then clearing really very little money at the end of the year.

Ben Thompson of Stratechery was on Invest Like the Best a few days ago with Patrick O'Shaughnessy, and I loved how he closed.

He said something like, Google built its business by buying up a lot of the dark fiber lines that were sold for scraps after WorldCom failed.

And he talked about Google deploying massive amounts of capital into the AI build out, some of which is capital from Berkshire Hathaway, who owns the BNSF Railroad, which of course, owns the Northern Pacific Railway that we're going to talk about today.

It's all market history.

It's way overblown.

I want to, you know, who's doing your books here? Is it the people that did Enron and WorldCom? Like, this is way too over bloated here.

And they'll say, no, that's accurate.

That's accurate.

Now, I began my career as a lawyer many years ago at the Securities and Exchange Commission.

This was right after the Enron and WorldCom accounting scandals.

I turned down lucrative Wall Street jobs because I believe it's really important that we uphold the integrity of capitalism.

And the people that make the rules have to be above reproach.