As one of the richest people in the world, it may pay to follow Bill Gates’ portfolio. The largest position currently in the Bill & Melinda Gates Foundation Trust is, unsurprisingly, Microsoftwhich represents a stake worth approximately $14 billion.
However, its second-largest position, worth about $7.1 billion, is a very different kind of company. It’s a diversified holding company, which most investors are probably familiar with.
Why Bill Gates likes this stock
The second largest position in Bill Gates’ trust portfolio is none other than Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), the holding company founded by Warren Buffett. This should come as no surprise to anyone who has followed their long-term friendship. The two have been friends for over thirty years. During that time they shared a lot of wisdom with each other.
For example, in 2023, Bill Gates was asked by ChatGPT for the best advice he ever received. Gates immediately appealed to Buffett. ‘What Buffett talked about [how]Ultimately, what matters is what friends really think about you and how strong those friendships are [that matters]’, he said. In another interview a few years earlier, Gates described how Buffett would regularly contact him to catch up and discuss what he found fascinating recently. “Even though he maintains a hectic schedule, Warren still finds time to cherish friendships like few other people I know,” Gates described. ‘He picks up the phone and calls to say hello. He regularly sends articles that he has read and that he thinks… I will find interesting.”
Buffett often urges investors to invest in things they know and people they trust. It should come as no surprise that one of his best friends follows this advice by investing in Berkshire Hathaway.
There’s one more thing to know about Gates’ position in Berkshire Hathaway: It’s not his only overlap with Buffett. In 2010, Berkshire bought railroad company Burlington Northern Santa Fe in a deal worth $26.4 billion. It was rare for Buffett to choose to issue additional Berkshire shares to finance an acquisition. In retrospect, the purchase was a great investment. Railroads operate pseudo-monopolies and provide enduring competitive advantages that have lasted for decades and should continue well into the future. It’s no wonder that Gates is the third largest holding after Microsoft and Berkshire Canadian National Railwaya stake worth approximately $6.9 billion.
Together, shares of Berkshire and Canadian National Railway make up a third of Gates’ entire trust portfolio. So whether Gates invests directly in Berkshire stock or replicates his investment strategy through stocks like Canadian National Railway, Gates is clearly in favor of following Buffett’s lead.
Should You Buy Berkshire Stock Now?
There’s a secret you need to know when it comes to Berkshire stock: There’s never a bad time to buy. Since 1995, shares have increased in value by more than 1,600%. But what if you bought at the height of the dot-com bubble? The shares are up almost 1,000% since 2000. And what if you bought just before the financial crisis? Since 2007, shares have risen almost 500%.
Of course, past results do not guarantee future returns. But because Berkshire’s shares trade at 1.5 times book value (right around their long-term average), the stock doesn’t seem overpriced. Buffett is still at the helm, accompanied by a group of trusted investors who share his vision and investment philosophy. The company is also more diversified than ever, with investments in technology, insurance, energy, transportation and more.
Berkshire is truly a one-stop shop for diversifying your portfolio. With a decades-long track record of beating the market, plus one of his best friends at the helm, Gates expects to keep his stake in Berkshire for years to come. Smart investors could do a lot worse than follow his lead and make Berkshire one of their top long-term holdings.
Should You Invest $1,000 in Berkshire Hathaway Right Now?
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool holds 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 to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
Billionaire Bill Gates Bets $7.1 Billion on This First Famous Stock, Originally Published by The Motley Fool
