Billionaire investor Warren Buffet appears to have changed his sentiment on the railroad industry after cutting down his holdings in Union Pacific (NYSE:UNP) and Norfolk (NYSE:NSC). There is no mention of his Santa Fe Corporation (NYSE:BNI), however, which means he may be holding onto that one for now.

Buffet's Berkshire Hathaway (NYSE:BRK) sold 10.5 million shares of Union Pacific bringing his holdings down to 7.41 million shares. Meanwhile, he sold off around 2.6 million shares of Norfolk bringing his stake down to right around 3.75 million shares. These are significant reductions in his exposure to the sector.

Many are speculating that higher energy prices may hit railroads more dramatically than initially expected. The transportation sector is typically the first to be hit and railroads are particularly vulnerable these days considering the plethora of other problems that they are facing.

In the end, Warren Buffet typically knows what he is doing when investing. His moves are definitely worth watching via Berkshire's 13F filings with the SEC. In this case, it may be a time to reduce exposure to railroads and other transportation companies as energy prices continue to rise.