To invest effectively, it is better to avoid following the media mainstream. On the other hand, whether you like them or not, some investors present very good examples of strategies that work.
If the Bill Gates of the Microsoft era did not interest me much, that of the “Bill and Melinda Gates” foundation attracts all my attention. The latter will transfer 95% of his fortune to his foundation.
If his “better world” is perhaps not necessarily that of everyone, this approach is no less exemplary. But that is not the subject here. What challenges us is that Bill Gates seeks to make his action as effective as possible (we can speak of effective altruism) with:
– good management of the assets of his foundation;
– and good use of funds.
Whether you like Bill Gates or not, it’s interesting to read what he says, to find out where he invests and why. Not only because he is brilliant in these investments, but also because he has access to information that you and I will never get.
In the stock market, there are three categories of investors:
- The precursors
3. The crowd (and, in general, those who arrive too late)
Bill Gates undoubtedly belongs to the first group. In his book Climate: how to avoid a disaster – which I advise you to read (rather depressing but very instructive to understand what will happen to us) –, Bill Gates validates the scenario of massive electrification when possible, to then decarbonize electricity production and arrive at zero carbon emission.
This idea validates the model of the electric car. The global fleet of electric cars in the world is thus expected to increase from 5 million to 2 billion by 2050. Knowing that it takes three to four times more copper in an electric car than in a gasoline car, this should have considerable consequences on the demand for the red metal. In addition, copper demand is expected to structurally increase with:
– the growth of the world population (we will be 10 billion inhabitants on Earth in 2050, according to the United Nations);
– the adoption of the western way of life;
– the growth of urbanization (the urban population should double by 2050 according to the UN, which is equivalent to the creation of a city like New York each month);
– the decarbonisation of electricity production (this is not an option).
If we compare his vision for decarbonizing the economy and the analyzes of major mining groups (they have the best analysts when it comes to raw materials), this agrees and validates, for example, investment in copper in the long term ( this is good, since it has been falling since April).
The other metal that is in the same dynamic is nickel, which is used in electric batteries. It also benefits from the growth of the world population, from urbanization, from the adoption of the western way of life.
It also validates nuclear for the decarbonization of electricity production. For him, renewable energies will not be enough to meet all the demand. He considers that capturing carbon on site or in the air makes sense, and will be an integral part of the solution.
Did you also know that Bill Gates ranks among the first private owners of agricultural land in the USA, with a total of 108,455 hectares? Considering that land is the most valuable asset (especially in times of inflation), you will believe me more easily if I tell you that in the first place of the ranking of landowners in the USA is the tycoon media John Malone with 809,308 hectares, then that in n°3 is Ted Turner (in particular founder of CNN) with 809,371 hectares (and 50,000 bison). In n°7, we find the co-founder of Subway, Peter Buck (Subway) with 500,000 hectares, and, in n°25, a certain Jeff Bezos, with nearly 170,000 hectares…
Bill Gates owns his land via his investment company “Cascades investments”, which manages $75 billion in assets (60% of his fortune).
Cascades’ first asset is Berkshire Hathaway (Warren Buffet’s company, $9.4 billion, or 53%), then, in order, we find Waste Management (waste treatment, $2.8 billion , 16%), Caterpillar (manufacturer of construction, mining and energy machinery, $1.3 billion, 7%), Canadian National Railway (railway company, $1.1 billion, 6% ) and Ecolab (product and water treatment, $671 million, 3%).
To sum up, the investments of this company are for half of the economy old school (Berkshire Hathaway), waste treatment, bulldozers, a railway line in Canada, water treatment and agricultural land… Here is a panorama of very interesting investments, closer to Warren Buffet than to the Silicon Valley. But note that Cascades’ average rate of return on investment has been 11% per year since its creation in 1995…
For me, Bill Gates and all the other “precursors” are an inexhaustible source of information and much more useful than any media mainstream for an investor.
To support my point, here is an excerpt from Stan Weinstein’s book Secret to winning on the stock market:
“You can never consistently beat the market by reading today’s fundamental news in the newspapers and acting on that information. It’s a passport to failure, a small dose of deadly poison. »