Inside Look at Bill Gates’ Portfolio: Lessons from His Investments

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Jacob Wolinsky
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Bill Gates’ investment career started in the 70s by reinvesting in Microsoft’s growth. But, his first major investment move was made during the 80s when he acquired rights for the operating system DOS from Seattle Computer Products. Since then his investment has been dynamic. In 1995 he founded Cascade Investment and in 2000 Bill & Melinda Gates Foundation. Bill Gates’ investment portfolio is made from 74 holdings valued at $46 billion.

The biggest holding is Microsoft, despite reducing his stake due to the divorce agreement, and by selling portions of his position. In second position is Buffett’s holding company Berkshire Hathaway. Most of this position is made from stocks that Buffett donated to Gates. Other major holdings are Canadian National Railway and Waste Management Inc.

Bill Gates’ investment approach is based on a long-term horizon with a focus on companies with strong fundamentals. From there we can assume that he is a valuable investor. But, he is also aiming to align his investments with his philanthropic goals making him an impact investor. For more information about one of the most influential people in the world, and his investment career and strategy, stay with us.

Bill Gates Biography

Bill Gates was born in 1955 in Seattle. His mother was a schoolteacher while his father was a prominent lawyer. Gates’ parents wanted their son to pursue a career in law. But, already while in 8th grade he showed passion for programming in the BASIC programming language.

Gates wrote his first computer program on a General Electric computer for students. It was a game that resembled a tic-tac-toe, where the player could play against the computer. At the age of 17 Gates with a close friend Paul Allen created a venture called Traf-O-Data to count traffic with the help of the Intel 8008 processor.

Gates scored 1590 out of 1600 on his SATs and enrolled in Harvard College in 1973. He joined up with Paul Allen in 1974 at Honeywell. In 1975 a microcomputer MITS Altair 8800 was produced based on Intel 8080 CPU, and Allen and Gates saw an opportunity to form a software company in 1975. Gates left Harvard in the same year with a focus on his company.

Gates and Allen formed Microsoft in 1976 and their first task was a BASIC interpreter for the MITS platform. In the next 5 years, Microsoft grew, but Gates still oversaw most of the work, including checking every line of code. As the company continued to grow he moved up to a managerial and later executive role.

In July 1980, IBM came with an offer to Microsoft to design software for their personal IBM PC. That led to the development of MS-DOS, which transitioned Microsoft to a large player in the software industry.

Soon after stiff competition from Apple and Mac was putting a lot of pressure on Microsoft. To counter it, Gates started working on a new operating system which was released in late 1985.

Windows was thoroughly redesigned in the coming decade, slowly replacing MS-DOS. In Windows 95, MS-DOS was completely grown out of the Windows operating system. Bill Gates stepped down from the CEO position in January 2000.

In 1994, he formed the William H. Gates Foundation which was the spearhead for his philanthropic activities, especially after he stepped down from his CEO position. He saw David Rockefeller as the biggest influence and shared similar views about global problems that governments failed to identify.

Besides being an avid reader, he also authored four books:

  • “The Road Ahead” coauthored with Microsoft executive Nathan Myhrvold pointed to a future where the global informational highway will be a major factor in all activities.
  • “Business @ The Speed Of Light” co-authored with Collins Hemingway showed the importance of integration of business and technology and how it can offer a competitive advantage.
  • “How To Avoid A Climate Disaster” published in 2021 focuses on Gates’ view of this problem, and what are the ways to combat it.
  • In 2022 he published “How To Prevent The Next Pandemic” where he proposes a “General Epidemic Response and Mobilization Team” which will be under WHO supervision.

Bill & Melinda Gates Foundation Trust

Investment Strategy

Bill Gates combines the aspects of value investing with impact investing principles. He values businesses with strong fundamentals, like competitive advantages and positive cash flow. He is also looking for a possibility to find undervalued companies that have the potential for more.

Gates has been focusing on his philanthropic activities for decades. He advocates using green energy, and companies that follow ESG recommendations. These companies must have high scores on environmental, social, and governance factors. These factors also play a crucial role when choosing a potential investment target.

Gates prefers a long-term investment horizon, and his portfolio doesn’t frequently change. Some of his holdings have been in his portfolio for more than 10 years. He likes to diversify his holdings across different industries, with a focus on technology, finance, and consumer discretionary sectors.

Key Investments

The biggest holdings in the Bill & Melinda Gates Foundation are:

  • Microsoft (NASDAQ:MSFT) with 34.8% of the portfolio

This is his biggest holding since Gates’ is the owner and founder of Microsoft Corp. He currently owns 39.3 million shares valued at $16.1 billion. The last major trade happened in Q3 2022 when Gates bought 38.3 million shares. The share price has constantly increased during 2023 moving from $240 to the current $410.

  • Berkshire Hathaway Inc. Class B (NYSE:BRK.B) with 19% of the portfolio

Buffett donated the first stocks of his holding fund to Gates back in 2006. Currently, Gates owns 22.5 million shares valued at $8.63 billion. In Q3 2023 he trimmed this holding by 10.4% and sold 2.61 million shares.

  • Canadian National Railway Co. (NYSE:CNI) with 14.83 of the portfolio

This is a long-term holding that Gates started investing in Q3 2002. His total investment since has been $5.31 billion. Gates currently owns 54.8 million shares valued at $6.81 billion. This holding has up till now brought a gain of 28%.

  • Waste Management Inc. (NYSE:WM) with 14.23% of the portfolio

Another Gates’ long-term investment that has been a part of his portfolio for more than 2 decades. He owns 35.2 million shares valued at $6.53 billion, and that is 8.8% of all company’s outstanding stocks. Gates total investment in this holding is $3.04 billion, resulting in a gain of 115%. The last trade was in Q3 2022 when he significantly increased his holding by buying 16.6 million shares.

  • Caterpillar Inc. (NYSE:CAT) with 4.86% of the portfolio

Gates started trading this equipment manufacturing giant in Q4 2005. His current total stake is 7.35 million shares valued at $2.23 billion. In the last three years, he has been decreasing the stake at this company and he sold a total of 3 million shares. Gates invested a total of $439 million resulting in a 408% gain.

  • Deere & Co. (NYSE:DE) with 3.40% of the portfolio

Manufacturer of agricultural equipment is a newer part of Gates’s portfolio. He started trading in Q3 2021 and his total investment was $1.36 billion. Now Gates owns 3.92 million shares valued at $1.56 billion netting a 15% gain.

Take A Look At Bill Gates Stock Portfolio – Breakdown of Bill & Melinda Gates Foundation Trust:

Most Recent Investments

During 2023 he invested in several new holdings, but they do not have a significant stake in his overall portfolio:

  • Meta Platforms Inc. Class A (NASDAQ:META). In Q3 2023 Gates’ bought 27 thousand Meta shares at $301.30. They are currently valued at $401.
  • Apple Inc. (NASDAQ:AAPL). Gates has been trading with Apple stocks in the past, but after three years he started anew. He bought 53 thousand shares in Q3 2023 at $183.38. Their current value is $188.
  • Broadcom Inc (NASDAQ:AVGO). Another small holding started in Q3 2023. Gates bought 6.5 thousand shares at $866.82, and their value skyrocketed to the current $$1,217.77.
  • Amazon.com Inc. (NASDAQ:AMZN). Gates restarted this holding in Q3 2023 with a small investment in 44 thousand shares that were valued at $134. Now their value has risen to $161.26.
  • Eaton Corporation Plc (NYSE:ETN). Another investment from a Q3 2023 batch of investments. Gates bought 26.1 thousand shares at $215.58, and since then the price has risen to $248.72.

Bill Gates Portfolio Performance Analysis

To analyze the recent performance of Bill Gates’ portfolio, we need to check the largest holdings and their returns.

  • Microsoft (MSFT) generated a gain of +29.67% since last filing
  • Berkshire Hathaway (BRK.B) generated a gain of +10.52% since last filing
  • Canadian National Railway (CNI) generated a gain of +15.98% since last filing
  • Waste Management (WM) generated a gain of +23.25% since last filing
  • Caterpillar (CAT) generated a gain of +12.73% since last filing
  • Deere (DE) generated a gain of +5.57% since the last filing.

For analyzing the historical performance of Gates’ portfolio we will take into account data back to Q1 2012. Since then Bill & Melinda Gates Foundation Trust generated a gain of 309.74%. In the same time frame, the S&P 500 outperformed them by generating a 317.78% gain. But, a much better benchmark is an analysis of the performance of hedge funds. They generated an average return in the same period of 123.40%.

FAQs

What Is Bill Gates Investment Company?

Bill Gates’ main investment company is Cascade Investments, but besides that, Bill Gates also conducts investments through the Bill & Melinda Gates Foundation Trust.

How Much Does Bill Gates Make in Dividends?

Bill Gates’s current dividends earnings are as follows:

  • Microsoft: 0.8% dividend yield
  • Berkshire Hathaway currently does not pay dividend
  • Canadian National Railway: 2.1% dividend yield
  • Waste Management: 1.6% dividend yield
  • Caterpillar: 2.1% dividend yield
  • Deere and Company: 1.5% dividend yield
  • Ecolab: 1.1% dividend yield
  • Coca-Cola: 3.9% dividend yield.

Does Bill Gates Own Fedex?

Bill Gates has had a stake in Fedex (NYSE: FDX) since Q2 2005. His total investment in this holding is $182 million. He currently owns 1.53 million shares valued at $374 million, netting him a gain of 106%.

Final Thoughts

Although most of us know Bill Gates as a software and technology revolutionary, he was keen on investing for decades. He took advice from Warren Buffett, and they share a great deal of admiration for each other.

When searching for investing targets, Gates is looking for ESG-responsible companies that align with his current philanthropic goals. His current portfolio is mostly made from Microsoft and Berkshire Hathaway stocks. But the rest of the bigger holdings are there for some time, pointing to his aim of looking at the long-term investment horizon.

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Jacob Wolinsky is the founder of HedgeFundAlpha (formerly ValueWalk Premium), a popular value investing and hedge fund focused intelligence service. Prior to founding the company, Jacob worked as an equity analyst focused on small caps. Jacob lives with his wife and five kids in Passaic NJ. - Email: jacob(at)hedgefundalpha.com FD: I do not purchase any equities to avoid conflict of interest and any insider information. I only purchase broad-based ETFs and mutual funds.