Bill Gates was once the richest person in the world by an absolutely stunning margin. The Microsoft (NASDAQ: MSFT) The founder became the world’s first centillionaire, reaching a net worth of $100 billion in 1999 in the midst of the dot-com bubble. It would be another 18 years until another person crossed that threshold.

While Microsoft’s value has far surpassed its peak at the turn of the century, Gates’ net worth still hovers around $100 billion. That’s because he has consistently given his wealth to his non-profit organization, the Gates Foundation. Over the years, he has stepped back from his responsibilities at Microsoft to focus on his philanthropic goals, and plans to give away virtually all of his remaining wealth over the next two decades.

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Although one technology company made Gates rich, his foundation’s portfolio is heavily concentrated in a handful of shares of valuewhich reflects Gates’ investment strategy and the influence of a key mentor, Warren Buffett. In fact, approximately 59% of the entire tradable stock portfolio is held in just three outstanding stocks.

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) Chairman Warren Buffett donates a significant number of his company’s shares to the Gates Foundation each year as part of his annual donation. Last year’s grant totaled 9.4 million Class B shares of the stock.

Although the Gates Foundation is mandated to use the entire value of Buffett’s donation each year, plus 5% of his other assets at the time of the donation, the trust’s managers have retained a good portion of Berkshire’s stock. At the end of the third quarter, the trust held 21.8 million shares, worth $11 billion at the time of writing.

Buffett handed over the reins of Berkshire Hathaway to Greg Abel earlier this year, but that is unlikely to change the Gates Foundation’s position on the stock. While Berkshire Hathaway will undoubtedly undergo some changes under Abel’s leadership, Buffett left him with a portfolio of excellent businesses and minority stakes.

At the core of Berkshire is its insurance business, which has delivered excellent results over the past few years. Despite a setback in early 2025 due to the California wildfires, the insurance business delivered a 3% increase in underwriting revenue in the first nine months of 2025. Investors can expect the operational excellence of the insurance business to remain consistent under Abel.

Shares of the stock are currently trading at around 1.55 times book value, which has been seen as a fair price to pay for the stock in recent years. However, almost a third of that book value comes from its tradable equity portfolio, which Buffett could argue that it contains several large holdings in overpriced stocks. As such, the valuation may be a fair price, but it is not a bargain price for the stock. However, the foundation is likely to hold most of its shares at that price, and will receive even more later this year from Buffett’s annual donation.

Wm (NYSE: WM)formerly Waste Management, is a long-standing holding company of the Gates Foundation trust. Despite selling some shares in the third quarter, he still had 28.9 million shares in the most recent update. That stake is worth about $6.6 billion at the time of writing.

WM benefits from its dominant landfill portfolio of over 260 locations. Regulatory hurdles make it virtually impossible for smaller competitors to encroach on WM’s position. Instead, many choose to pay WM to use its landfills and other facilities. As a result, the waste disposal company has a massive competitive advantage in the slow-growth industry, allowing it to produce consistent profit growth and use excess cash to make sticky acquisitions.

WM’s legacy waste hauling business posted an adjusted operating margin of 31.5% in 2025, benefiting from price increases and automation. This represents a 30% increase from 2024, and management expects further margin expansion in 2026.

Meanwhile, the company successfully integrated its acquisition of Stericycle, renaming it WM Healthcare Solutions. The business still represents a small percentage of global operations and its margin profile is narrower, producing an adjusted operating margin of 16.9% in 2025. But there is plenty of room to improve both the top and bottom lines going forward.

Management disappointed investors with its outlook for 2026, which calls for revenue growth of 5.2% at the midpoint. It could make up for that disappointing top line with further operational improvements. With its forward P/E around 27.5, it may be a bit expensive. But investors should look for opportunities to buy shares of the company amid any pullback.

Canadian National Railway (NYSE: CNI) is another long-standing involvement for the Gates Foundation. The foundation received an infusion of 44.6 million shares in 2022 from Gates’ personal portfolio. He now owns 51.8 million shares worth about $5.1 billion.

The rail business is a slow-growing industry with increasing consolidation among major competitors. This puts the Canadian National in an excellent position, thanks to its size and its set of tracks that run from coast to coast in Canada and across the middle of the United States to New Orleans. Revenue rose 2% year-on-year in 2025 despite pressure on import volume due to President Trump’s tariffs. The company was able to offset the impact with record grain transport volumes in the last four months of the year.

Management’s outlook for 2026 calls for flat revenue, with earnings improvements driven by operational improvements. It also authorized a share buyback program of up to 24 million shares (about 3.9% of shares outstanding), which should boost earnings per share.

And the company should have the cash to support that buyback. Management is reducing its capital expenditure budget for 2026 to $2.8 billion, down 15% from 2025. Combined with operating margin improvements, this should produce a solid amount of additional free cash flow for its capital return program.

With an enterprise value to EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of less than 12, the stock trades at a lower valuation than its peers. It might be worth adding to your portfolio as it is capable of producing consistent earnings per share growth over time.

While most investors can’t mirror the Gates Foundation’s portfolio dollar for dollar, the lesson is clear: owning a small number of truly outstanding companies can matter far more than owning many average companies. If you’re a patient investor willing to think long-term, backing companies with durable competitive advantages, resilient cash flows and the ability to generate value for years are the drivers of long-lasting wealth.

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Adam Levy holds positions at Microsoft. The Motley Fool has positions and recommends Berkshire Hathaway and Microsoft. The Motley Fool recommends Canadian National Railway and WM. The Motley Fool has one disclosure policy.

Billionaire Bill Gates has 59% of his foundation’s $38 billion portfolio invested in 3 outstanding stocks was originally published by The Motley Fool