(GuruFocus, March 10, 2010) I meant to write about stock ideas shared by Warren Buffett and Bill Gates for quite some time and I always expected something good would come out of it.
There is no better day than today, for today Forbes just announced the new list of world’s richest people. There is no suspense: Gates and Buffett are both still very high up there, taking No.2 and No.3 spot respectively. Mexico tycoon Carlos Slim took the No.1 spot as the richest man in the world, beating Gates by ONLY $0.5 billion.
It is convenient and relevant to my topic for me to quote the profiles of Gates and Buffett in Forbes.com:
For Bill Gates:
I do not know how Forbes in its ranking treats the wealth donated by both men to Bill & Melinda Gates Foundation, a foundation initially set up by Bill and Melinda Gates, and to which Warren Buffett pledged to donate a lion share of his personal wealth in 2006. At the end of 2009, the Foundation’s endowment has $34.17 billion. I don’t think Gates and Buffett mind if their donations caused them to lose the No.1 and No.2 title.
The friendship between the two men and their attitudes towards money are truly beautiful things of our times. You may have heard of the story, but I still invite you to watch this video clip in which Buffett talked about his donation to the Gates Foundation:
Gates and Buffett have been seen together in public often in recent years. Buffett joined the two Gates as a trustee to the Foundation, and Bill Gates became a member of Board of Directors of Berkshire Hathaway. In November of 2009, the two men went to Columbia University and gave a Q&A with the students entitled “Keeping American Great”, bringing hope and aspiration to our nation that was in doubt and despair (Read the transcript here).
Introducing Michael Larson
I think I have spent enough time beating the bushes. Not those are not important, they just do not make us any richer. Here is the deal: the two richest men of the world share more than just the optimism to capitalism and to the country, they also share a few stock ideas.
Although at GuruFocus we track Bill Gates’s portfolio (that of Bill & Melinda Gates Foundation) under “Bill Gates”, the man managing the portfolio is really Michael Larson. According to this write-up on Larson in globeandmail.com entitled “Meet the man who runs Bill Gates’s Money”(emphasis mine):
We do not know how Larson works with Gates exactly. To fend off the questions of discerning readers, I assume that Larson actually does get some kind of concurrence from Mr. Gates on each of the investment ideas. As of December 31, 2009, the Gates Foundation has 36 stocks that worth $10.46 billion (about 1/3 of the total asset). It is a slow turn-over portfolio, so in practice Larson can talk to Gates about his investment ideas if they choose to work in this way.
If Larson does not talk to Gates at all in making investment decisions, change the name “Gates” in the title of this article to “Larson”.
Larson manages about $30 billion in Gates Foundation alone, making him a legitimate comparison to Buffett.
Stock Ideas Shared Between Buffett and Gates (Larson)
There are seven of them, as discovered by GuruFocus’s Aggregate Guru Portfolio tool. These are stocks owned by Buffett in Berkshire Hathaway portfolio and by Gates in the Gates Foundation portfolio:
The CocaCola Company (KO, Financial)
The Coca-Cola Company is the world's largest beverage company and is the producer and marketer of soft drinks. The Cocacola Company has a market cap of $124.94 billion; its shares were traded at around $54.2 with a P/E ratio of 17.8 and P/S ratio of 4.1. The dividend yield of The Cocacola Company stocks is 3%. The Cocacola Company had an annual average earning growth of 5.3% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 2.5-star.
Warren Buffett owns 200,000,000 shares and Bill Gates owns 6,682,000 shares as of 12/31/2009.
WalMart Stores Inc. (WMT, Financial)
Wal-Mart Stores, Inc. is the world's largest retailer. Walmart Stores Inc. has a market cap of $204.34 billion; its shares were traded at around $53.63 with a P/E ratio of 14.7 and P/S ratio of 0.5. The dividend yield of Walmart Stores Inc. stocks is 2%. Walmart Stores Inc. had an annual average earning growth of 13.3% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.
Warren Buffett owns 39,037,142 shares, Bill Gates owns 4,753,000 shares as of 12/31/2009
Costco Wholesale Corp. (COST, Financial)
Costco Wholesale Corp. operates membership warehouses. Costco Wholesale Corp. has a market cap of $26.29 billion; its shares were traded at around $59.84 with a P/E ratio of 22.6 and P/S ratio of 0.4. The dividend yield of Costco Wholesale Corp. stocks is 1.2%. Costco Wholesale Corp. had an annual average earning growth of 8.3% over the past 10 years. GuruFocus rated Costco Wholesale Corp.the business predictability rank of 5-star.
Warren Buffett owns 5,254,000 shares and Bill Gates owns 6,128,000 shares as of 12/31/2009.
Exxon Mobil Corp. (XOM, Financial)
Exxon Mobil Corporation's principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacturing of petroleum products and transportation and sale of crudeoil, natural gas and petroleum products. Exxon Mobil Corp. has a market cap of $317.36 billion; its shares were traded at around $67.22 with a P/E ratio of 16.8 and P/S ratio of 1. The dividend yield of Exxon Mobil Corp. stocks is 2.5%. Exxon Mobil Corp. had an annual average earning growth of 16.8% over the past 10 years. GuruFocus rated Exxon Mobil Corp. the business predictability rank of 4-star.
Warren Buffett owns 421,800 shares as of 12/31/2009, a decrease of 66.95% of from the previous quarter. Bill Gates owns 4,285,000 shares as of 12/31/2009
M&T Bank Corp. (MTB, Financial)
M&T Bank Corp is a bank holding company. They have two primary bank subsidiaries: Manufacturers and Traders Trust Company and M&T Bank, National Association. M&t Bank Corp. has a market cap of $9.44 billion; its shares were traded at around $79.56 with a P/E ratio of 25.7 and P/S ratio of 2.5. The dividend yield of M&t Bank Corp. stocks is 3.6%. M&t Bank Corp. had an annual average earning growth of 10.2% over the past 10 years. GuruFocus rated M&t Bank Corp. the business predictability rank of 3.5-star.
Warren Buffett owns 6,715,060 shares and Bill Gates owns 999,998 shares as of 12/31/2009.
Republic Services Inc. (RSG, Financial)
Republic Services, Inc., is a provider of services in the domestic non-hazardous solid waste industry. Republic Services Inc. has a market cap of $10.94 billion; its shares were traded at around $28.72 with a P/E ratio of 19.5 and P/S ratio of 1.4. The dividend yield of Republic Services Inc. stocks is 2.6%. Republic Services Inc. had an annual average earning growth of 11.6% over the past 10 years. GuruFocus rated Republic Services Inc. the business predictability rank of 5-star.
Warren Buffett owns 8,290,500 shares as of 12/31/2009, an increase of 128.7% from the previous quarter. Bill Gates owns 1,350,000 shares as of 12/31/2009.
The Home Depot Inc. (HD, Financial)
Home Depot is the one of world's largest home improvement retailer. The Home Depot Inc. has a market cap of $53.92 billion; its shares were traded at around $31.71 with a P/E ratio of 18.9 and P/S ratio of 0.8. The dividend yield of The Home Depot Inc. stocks is 2.8%. The Home Depot Inc. had an annual average earning growth of 19.5% over the past 10 years. GuruFocus rated The Home Depot Inc. the business predictability rank of 3.5-star.
Warren Buffett owns 2,757,898 shares and Bill Gates owns 1,402,000 shares as of 12/31/2009.
Conclusion
So these are the seven stocks owned by two of the richest men in the world. One striking thing about these stocks are all of high predictability. So what is predictability? We invite you to find out by click here.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Bill Gates for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
There is no better day than today, for today Forbes just announced the new list of world’s richest people. There is no suspense: Gates and Buffett are both still very high up there, taking No.2 and No.3 spot respectively. Mexico tycoon Carlos Slim took the No.1 spot as the richest man in the world, beating Gates by ONLY $0.5 billion.
It is convenient and relevant to my topic for me to quote the profiles of Gates and Buffett in Forbes.com:
For Bill Gates:
Software visionary is now the world's second-richest man. Net worth still up $13 billion in a year as Microsoft shares rose 50% in 12 months, value of investment vehicle Cascade swelled. More than 60% of fortune held outside Microsoft; investments include Four Seasons hotels, Televisa, Auto Nation. Stepped down from day-to-day duties at Microsoft in 2008 to focus on philanthropy. Bill & Melinda Gates Foundation dedicated to fighting hunger, improving education in America's high schools, developing vaccines against malaria, tuberculosis and AIDS.For Warren Buffett:
America's favorite investor up $10 billion in past 12 months on surging Berkshire Hathaway shares; says U.S. has survived economic "Pearl Harbor," but warns recovery will be slow. Shrewdly invested $5 billion in Goldman Sachs and $3 billion in General Electric amid 2008 market collapse. Recently acquired railroad giant Burlington Northern Santa Fe for $26 billion. "We've put a lot of money to work during the chaos of the last two years. When it's raining gold, reach for a bucket, not a thimble." Berkshire Hathaway book value was up 19.8% to $21.8 billion in 2009. Son of Nebraska stockbroker met value investor Benjamin Graham while studying economics at Columbia. Took over textile firm Berkshire Hathaway in 1965, used company as a vehicle to invest in insurance (Geico), food (Dairy Queen), utilities (MidAmerican Energy) and recently green tech (electric-car maker BYD).
I do not know how Forbes in its ranking treats the wealth donated by both men to Bill & Melinda Gates Foundation, a foundation initially set up by Bill and Melinda Gates, and to which Warren Buffett pledged to donate a lion share of his personal wealth in 2006. At the end of 2009, the Foundation’s endowment has $34.17 billion. I don’t think Gates and Buffett mind if their donations caused them to lose the No.1 and No.2 title.
The friendship between the two men and their attitudes towards money are truly beautiful things of our times. You may have heard of the story, but I still invite you to watch this video clip in which Buffett talked about his donation to the Gates Foundation:
Gates and Buffett have been seen together in public often in recent years. Buffett joined the two Gates as a trustee to the Foundation, and Bill Gates became a member of Board of Directors of Berkshire Hathaway. In November of 2009, the two men went to Columbia University and gave a Q&A with the students entitled “Keeping American Great”, bringing hope and aspiration to our nation that was in doubt and despair (Read the transcript here).
Introducing Michael Larson
I think I have spent enough time beating the bushes. Not those are not important, they just do not make us any richer. Here is the deal: the two richest men of the world share more than just the optimism to capitalism and to the country, they also share a few stock ideas.
Although at GuruFocus we track Bill Gates’s portfolio (that of Bill & Melinda Gates Foundation) under “Bill Gates”, the man managing the portfolio is really Michael Larson. According to this write-up on Larson in globeandmail.com entitled “Meet the man who runs Bill Gates’s Money”(emphasis mine):
Mr. Larson was born in North Dakota. He earned a degree in economics from Claremont McKenna College in California and an MBA from the University of Chicago, all by age 21. After graduating, he moved into the investment world and landed a job with Putnam Investments in Boston, according to the profile in Fortune. Mr. Larson left Putnam after two years to form his own firm. But before he could get properly started, he received a phone call from a headhunter searching for an investment professional on behalf of Mr. Gates. Mr. Larson and Mr. Gates hit it off and before long Mr. Larson flew to Seattle to take the reins of BGI. The two keep in constant touch, but Mr. Larson is left to manage the portfolios largely as he sees fit.BGI stands for “Bill Gates Investments”. Through it, Larson manages Bill Gates’s personal wealth in Cascade Investment LLC and oversees investments for the Bill and Melinda Gates Foundation. Although Cascade and Gates Foundation are different identity, the globeandmail.com article states “Many of the Gates Foundation's holdings match those of Cascade.”
We do not know how Larson works with Gates exactly. To fend off the questions of discerning readers, I assume that Larson actually does get some kind of concurrence from Mr. Gates on each of the investment ideas. As of December 31, 2009, the Gates Foundation has 36 stocks that worth $10.46 billion (about 1/3 of the total asset). It is a slow turn-over portfolio, so in practice Larson can talk to Gates about his investment ideas if they choose to work in this way.
If Larson does not talk to Gates at all in making investment decisions, change the name “Gates” in the title of this article to “Larson”.
Larson manages about $30 billion in Gates Foundation alone, making him a legitimate comparison to Buffett.
Stock Ideas Shared Between Buffett and Gates (Larson)
There are seven of them, as discovered by GuruFocus’s Aggregate Guru Portfolio tool. These are stocks owned by Buffett in Berkshire Hathaway portfolio and by Gates in the Gates Foundation portfolio:
| Symbol | Company | P/E | Yield (%) |
| KO | The CocaCola Company | 17.8 | 3 |
| WMT | WalMart Stores Inc. | 14.7 | 2 |
| COST | Costco Wholesale Corp. | 22.6 | 1.2 |
| XOM | Exxon Mobil Corp. | 16.8 | 2.5 |
| MTB | M&T Bank Corp. | 25.7 | 3.6 |
| RSG | Republic Services Inc. | 19.5 | 2.6 |
| HD | The Home Depot Inc. | 18.9 | 2.8 |
The CocaCola Company (KO, Financial)
The Coca-Cola Company is the world's largest beverage company and is the producer and marketer of soft drinks. The Cocacola Company has a market cap of $124.94 billion; its shares were traded at around $54.2 with a P/E ratio of 17.8 and P/S ratio of 4.1. The dividend yield of The Cocacola Company stocks is 3%. The Cocacola Company had an annual average earning growth of 5.3% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 2.5-star.
Warren Buffett owns 200,000,000 shares and Bill Gates owns 6,682,000 shares as of 12/31/2009.
WalMart Stores Inc. (WMT, Financial)
Wal-Mart Stores, Inc. is the world's largest retailer. Walmart Stores Inc. has a market cap of $204.34 billion; its shares were traded at around $53.63 with a P/E ratio of 14.7 and P/S ratio of 0.5. The dividend yield of Walmart Stores Inc. stocks is 2%. Walmart Stores Inc. had an annual average earning growth of 13.3% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.
Warren Buffett owns 39,037,142 shares, Bill Gates owns 4,753,000 shares as of 12/31/2009
Costco Wholesale Corp. (COST, Financial)
Costco Wholesale Corp. operates membership warehouses. Costco Wholesale Corp. has a market cap of $26.29 billion; its shares were traded at around $59.84 with a P/E ratio of 22.6 and P/S ratio of 0.4. The dividend yield of Costco Wholesale Corp. stocks is 1.2%. Costco Wholesale Corp. had an annual average earning growth of 8.3% over the past 10 years. GuruFocus rated Costco Wholesale Corp.the business predictability rank of 5-star.
Warren Buffett owns 5,254,000 shares and Bill Gates owns 6,128,000 shares as of 12/31/2009.
Exxon Mobil Corp. (XOM, Financial)
Exxon Mobil Corporation's principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacturing of petroleum products and transportation and sale of crudeoil, natural gas and petroleum products. Exxon Mobil Corp. has a market cap of $317.36 billion; its shares were traded at around $67.22 with a P/E ratio of 16.8 and P/S ratio of 1. The dividend yield of Exxon Mobil Corp. stocks is 2.5%. Exxon Mobil Corp. had an annual average earning growth of 16.8% over the past 10 years. GuruFocus rated Exxon Mobil Corp. the business predictability rank of 4-star.
Warren Buffett owns 421,800 shares as of 12/31/2009, a decrease of 66.95% of from the previous quarter. Bill Gates owns 4,285,000 shares as of 12/31/2009
M&T Bank Corp. (MTB, Financial)
M&T Bank Corp is a bank holding company. They have two primary bank subsidiaries: Manufacturers and Traders Trust Company and M&T Bank, National Association. M&t Bank Corp. has a market cap of $9.44 billion; its shares were traded at around $79.56 with a P/E ratio of 25.7 and P/S ratio of 2.5. The dividend yield of M&t Bank Corp. stocks is 3.6%. M&t Bank Corp. had an annual average earning growth of 10.2% over the past 10 years. GuruFocus rated M&t Bank Corp. the business predictability rank of 3.5-star.
Warren Buffett owns 6,715,060 shares and Bill Gates owns 999,998 shares as of 12/31/2009.
Republic Services Inc. (RSG, Financial)
Republic Services, Inc., is a provider of services in the domestic non-hazardous solid waste industry. Republic Services Inc. has a market cap of $10.94 billion; its shares were traded at around $28.72 with a P/E ratio of 19.5 and P/S ratio of 1.4. The dividend yield of Republic Services Inc. stocks is 2.6%. Republic Services Inc. had an annual average earning growth of 11.6% over the past 10 years. GuruFocus rated Republic Services Inc. the business predictability rank of 5-star.
Warren Buffett owns 8,290,500 shares as of 12/31/2009, an increase of 128.7% from the previous quarter. Bill Gates owns 1,350,000 shares as of 12/31/2009.
The Home Depot Inc. (HD, Financial)
Home Depot is the one of world's largest home improvement retailer. The Home Depot Inc. has a market cap of $53.92 billion; its shares were traded at around $31.71 with a P/E ratio of 18.9 and P/S ratio of 0.8. The dividend yield of The Home Depot Inc. stocks is 2.8%. The Home Depot Inc. had an annual average earning growth of 19.5% over the past 10 years. GuruFocus rated The Home Depot Inc. the business predictability rank of 3.5-star.
Warren Buffett owns 2,757,898 shares and Bill Gates owns 1,402,000 shares as of 12/31/2009.
Conclusion
So these are the seven stocks owned by two of the richest men in the world. One striking thing about these stocks are all of high predictability. So what is predictability? We invite you to find out by click here.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Bill Gates for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
