Buffett and Gates Pouring Billions into Trash
Bill Gates and Warren Buffett are more than just close friends and bridge buddies. With a combined net worth of $100 billion, they're arguably the two most powerful men in business.
Case in point -- In 2009 a small Chinese clothing stock skyrocketed +108.3% in a single month after the press discovered that both Gates and Buffett regularly wear the firm's suits.
If these two men can move the stock market by altering their dress code, just imagine what they can do when they team up and start pouring billions of dollars into one or two individual stocks.
That's exactly what's happening right now. In fact, Buffett and Gates now appear to be eyeing a takeover of one of the world's most vital industries: trash.
Bill Gates Makes The Biggest Insider Trade of 2009
Gates already owned 29 million shares of Republic Services (NYSE: RSG) going into 2008. Then, he bought the stock 23 different times in 2008... and bought it another 39 times in 2009. He now owns 55 million shares.
Warren Buffett is just starting toup on the same stock. He first bought 3.6 million shares of RSG between July 1, 2009 and September 30, 2009... he bought another 4.7 million shares between October 1, 2009 and December 31, 2009... and he just bought ANOTHER 2.5 million shares between January 1, 2010 and March 31, 2010. He now owns a total of 10.8 million shares.
All told, based on recent share prices of $30, Buffett and Gates have well over $1.9 billion in this stock.
What's interesting is that Gates also owns $540 million worth of Republic Service's closest competitor, Waste Management Inc. (NYSE: WM).
What makes these companies so attractive?
- They control an essential service every American uses every day.
- Competition is virtually nonexistent -- these two stocks together control half of the U.S. market, giving them a virtual monopoly on this essential service.
- These growing monopolies deliver big profits for investors. Period. Republic Services has consistently outperformed the S&P 500 and has skyrocketed +76.2% over the past year.
Bottom line -- Buffett and Gates could be trying to corner the market in this vital industry. If you want to profit alongside them, then you may want to act soon. If history is any guide, then Buffett might eventually buy one (or both) of these companies outright. The last time he did that, the shares of his target firm -- Burlington Northern -- jumped +29% on the day of the announcement.
Investors who were smart enough to buy Burlington Northern a few months earlier, when word first surfaced that Buffett bought $271 million of the stock, were treated to gains of +60.6% in less than a year.
History could be repeating itself here, and you can profit right alongside both Buffett and Gates as they pile into this booming market.