Some characteristics stand out immediately. For one, there's no
(MSFT - Get Report)
. Why should there be? For us, Microsoft is an investment. For Gates, the software company's chairman and co-founder, it's his piggy bank.
Another salient characteristic of the portfolio is that it contains no tech stocks. This, too, makes sense. Why should Gates invest in the competition? Since Microsoft is not in his portfolio, I chose not to include it in my
Better Than Bill Gates portfolio
I started with
Canadian National Railway
(CNI - Get Report)
, Gates' largest investment, worth nearly $1.4 billion and representing 37.7% of Cascade Investments' portfolio and 5.8% of CNI.
Railroads have been a hot area for super investors, and with good reason. As I discussed with Jim Cramer in a
for TheStreet.com TV about railroads, rail transportation is more cost effective than truck transportation.
, who is a good friend of Gates, owns
Burlington Northern Santa Fe
Canadian National is putting up good numbers. In the first quarter of 2007, it returned 20% on equity, far better than the industry average of 14.7%. For that reason, I believe Canadian National is a keeper.
(RSG - Get Report)
, a Florida-based waste disposal company, in which Cascade invested $756 million, representing 20.6% of Cascade's portfolio and 14% of the company.
Waste disposal is a booming business. The Dow Jones waste and disposal services index has been outperforming the
since the spring. That said, is Republic Services the best choice in the sector?