As one of the richest people in the world, it can pay to track Bill Gates’ portfolio. The biggest position currently in the Bill & Melinda Gates Foundation Trust is, unsurprisingly, Microsoft, representing a stake worth roughly $14 billion.
His second-largest position, however, worth around $7.1 billion, is a much different kind of business. It’s a diversified holding company, one most investors are likely familiar with.
Why Bill Gates loves this stock
The second-largest position in Bill Gates’s trust portfolio is none other than Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), the holding company founded by Warren Buffett. This shouldn’t be surprising to anyone who has followed their long-term friendship. The two have been friends for over three decades. Over that time, they’ve shared a lot of wisdom with each other.
In 2023, for example, Bill Gates was asked by ChatGPT for the best advice he has ever received. Gates immediately invoked Buffett. “Warren Buffett talked about [how], in the end, it’s how friends really think of you and how strong those friendships are [that matters],” he said. In another interview a few years prior, Gates described how Buffett would reach out to him regularly to catch up and discuss what he had recently found captivating. “Even though he keeps up a hectic schedule, Warren still finds time to nurture friendships like few other people I know,” Gates described. “He picks up the phone and calls to say hello. He regularly sends articles he’s read that he thinks … I will find interesting.”
Buffett is often urging investors to invest in things that they know and in people that they trust. It shouldn’t be surprising to see one of his closest friends following this advice by investing in Berkshire Hathaway.
There’s another thing to know about Gates’ position in Berkshire Hathaway: It’s not his only overlap with Buffett. In 2010, Berkshire famously purchased railroad company Burlington Northern Santa Fe in a deal worth $26.4 billion. It was a rare instance in which Buffett opted to issue additional Berkshire stock in order to fund an acquisition. In hindsight, the purchase was a terrific investment. Railroads operate pseudo monopolies, providing durable competitive advantages that have lasted for decades and should last far into future decades. It’s no wonder, then, that Gates’ third-largest position after Microsoft and Berkshire is Canadian National Railway, a stake worth roughly $6.9 billion.
Put together, the Berkshire and Canadian National Railway stakes comprise one-third of Gates’s entire trust portfolio. So whether its investing directly into Berkshire stock or by replicating its investing strategy through stocks like Canadian National Railway, Gates is clearly all in on following Buffett’s lead.
Should you buy Berkshire stock right now?
There’s a secret that you should know about when it comes to Berkshire stock: It has never been a bad time to buy. Since 1995, shares have risen in value by more than 1,600%. But what if you bought at the peak of the dot-com bubble? Shares are up by nearly 1,000% since 2000. And what if you bought right before the financial crisis? Since 2007, shares have risen by nearly 500%.
Of course, previous results don’t guarantee future returns. But with Berkshire shares trading at 1.5 times book value — right around their long-term average — the stock doesn’t appear overpriced. Buffett is still at the helm, accompanied by a group of trusted investors that share his vision and investing philosophy. The company is also more diversified than ever, with investments in tech, insurance, energy, transportation, and much more.
Berkshire really is a one-stop shop for diversifying your portfolio. With a multidecade track record of beating the market, plus one of his closest friends at the helm, expect Gates to retain his Berkshire holding for years to come. Savvy investors could do far worse than following his lead and making Berkshire one of their top long-term positions.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Microsoft. The Motley Fool recommends Canadian National Railway and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Billionaire Bill Gates Is Betting $7.1 Billion on This 1 Famous Stock was originally published by The Motley Fool
Source: finance.yahoo.com