Tangible and irreplaceable assets

Besides, when public ownership of assets results in a loss, that loss is borne by the tax payer. It is, in effect, a stupidity tax, or a tax you pay for allowing inept managers to run large enterprises. Who benefits from a loss-making enterprise protected by a government monopoly? We'll give you two guesses.

So far, the advertising campaign for the float has been pretty slick. It's turned a boring rail company into a symbol of Australia's future prosperity. Fraser has said in public that, "This is a once-in-a-lifetime opportunity. There is no other opportunity out there to leverage into the Asian region … and the resources boom. It is a unique proposition."

In that sense, the float of the company raises our contrarian hackles. Flogging new shares to the public as a way of participating in a "can't miss" boom is usually a sign of the top in a market. It's a basic case of supply and demand. The finance industry's job is to supply the public with dreams of riches. And when the public demands a way to ride the Asia/Commodities boom, the public will get what it wants.

But Bill's old "Law of Perverse Outcomes" comes to mind. The Law states that investors tend to get what they deserve, not what they expect. What you'd expect from Queensland Rail is a company leveraged to the Asia boom and a kind of proxy for Australia's future. This is an echo of the thinking that led Warren Buffet to buy Burlington Northern earlier this year in America.

But you probably shouldn't buy a company because you're bullish on a country. You should buy a company because it has a strong competitive position, makes lots of cash, is well run, and has a capital structure that makes it immune to the vagaries of the debt markets. You'd also want to own a business that wasn't going to be endlessly tinkered with for political considerations by a large minority shareholder like the government.