If you are a stock investor, you should know a thing or two about the Securities Exchange Commission (SEC) and because of the SEC, we, as investors, have a golden opportunity every three months to know what great investors and businessmen like Ray Dalio, Warren Buffet, and Bill Gates are doing with their money in the stock market. To be a good investor, you have to learn some things from those who have indeed succeeded in the stock market, so even if it is not any of these three, there has to be someone who inspires you to become a better investor. Legally, these big investors and their companies would have to disclose their financial activities to the public so what we get is accurate and authentic. In this blog, we will be looking at the investments of one of the richest men in the world today, Bill Gates. Many investors know who Bill Gates is. As long as you use a Microsoft product in your home or office, you should know Bill Gates. Follow me as we analyze some of his activities shortly.
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Straight to the business of the day – what has Bill Gates been up to in the year 2021? In the first quarter of 2021, Bill Gates sold out of fourteen stock positions he held. About five of these stocks, he sold at a hundred per cent, and others he sold significantly lower. While he sold many stocks, he didn’t do so much buying. In fact, in the first quarter of 2021, he only bought one stock, Coupang Inc (CPNG). So let’s see what is the motive behind selling fourteen stocks and only buying one stock? Stick with me to find out.
One of the stocks he sold at 100% were Liberty LILAC Group, a telecoms company based on mobile, telephone, and broadband services. Then, he sold all his stock positions at Twitter, probably to Jack Dorsey Twitter’s CEO dismay. He also sold all his positions at Amazon, which is interesting because Amazon stocks are doing pretty well at the moment. Apple Inc. was probably the most hit when he sold all his stocks held there, amounting to over one million shares. He also sold positions at other companies like FedEx Corp, United Parcel Service, Walmart Inc., Canadian National Railway Co., Caterpillar Inc., Crown Castle International Corp., Liberty Global Inc., and even Berkshire Hathaway, the company owned by one of his billionaire buddies and close friend, Warren Buffet. Even though he reduced his stocks thereby by almost twelve per cent, which amounted to five million shares, it is still top of his portfolio list. Most investors of Berkshire Hathaway do not like to sell because of the Oracle of investment, so it is a little surprising. He still has over nine billion dollars invested in the company in his portfolio, though more than four times more than his next biggest investment.
After all the selling, he decided to invest probably some of the money into a South Korean E-commerce company named Coupang Inc. This company only went public in March 2021. Some already see it as the Amazon of South Korea. However, with a 295 million dollar net loss, we can say they are still in their early growth phase. This means that they may still be expanding their company.
Going back to the last quarter of 2020, Bill Gates made a similar move by selling some or all of his stocks in eleven companies while investing in just one company named SCHRODINGER. So, why all these?
First, we need to remember that we are recovering from a pandemic, and most companies took severe hits on their finances. The automobile, food, hospitality, and manufacturing industries suffered serious hits during the pandemic. However, disruptive innovative companies like Amazon seemed to thrive and other businesses that were done solely on the internet. E-commerce growth sales went up more than forty per cent. Social media companies like Twitter as well as forwarding companies like FedEx, UPS, and some others also thrived during this period. However, Bill Gates still sold out of these companies.
My guess is Bill Gates might feel like these companies have had their time, and this is the right time to sell out and make the most returns before the stock prices begin to drop. But what is he doing with his cash? First, he is now the biggest private farm owner in the world, with 269,000 acres of farmland. But he is not a farmer but a tech geek, so why did he sell stocks in tech-related companies and buy farmlands worth the size of a small country?
Bill Gates is one of the richest men in the world, but we cannot attribute it to luck. It took some hard work in starting up Microsoft and then some pretty smart investments with Michael Larson. He may be seeing something similar to what he saw in 1999 when he sold out of his Microsoft stocks just before the “Great Internet Bubble Pop”. Now, he is doing some selling of his positions in the big tech companies and trying to diversify his portfolio AGAIN. Now, he is buying up farmlands. But why? It is because farmlands are a finite asset since you cannot create more farmlands. Farmlands are always in short and will be valuable till the end of time. In fact, as long as man has to eat, farmlands are essential.
In conclusion, if there is a recession in the near future, people will still need to eat, so this is basically the smartest investment. Cash and tech companies may lose value over the years, bucrt farmlands are always going to do the opposite. Bill Gates hasn’t spoken of any particular reason for selling, but one thing we can say is that the market is changing. Bill Gates is doing the opposite of other investors, and there is wisdom in what he is doing. Please like and share this blog if you found it informative, and let me hear your views and comments.
Recommended books for further reading:
- The Little Book of Common Sense Investing
- Stock Market Investing For Beginners: The Investment Guide
- The Five Rules Successful Stock Investing
- Rich Dad’s Guide to Investing
- How to Make Money in Stocks: A Winning System In Good Times And Bad
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