Episode summary
Why Gates Bets on Landfills While Everyone Else Chases Tech
Summary
Dylan Grice argues that Bill Gates’s largest personal position outside Microsoft, roughly $25 billion in Republic Services, is a lesson in how to protect wealth in an inflationary world. He frames long bonds as dangerous because fixed coupons lose real value when inflation rises, and says investors need cash-generating assets that can keep ahead of inflation instead.
He presents Republic Services as exactly that kind of business: a stable waste-management company with about 9.9% top-line growth and 12.5% earnings growth, scarce landfill assets, regulated local moats, and reliable cash flow. In his view, the fact that earnings are growing faster than revenue suggests management is squeezing operational efficiencies. He also says the business is resilient because garbage collection and recycling are essential regardless of technology cycles.
The broader point is portfolio construction. Dylan Grice says investors with heavy exposure to tech and the Mag 7 should look for old-line businesses, real estate, or other assets that can raise prices faster than inflation. He argues the economy is entering an era of fiscal dominance and higher real inflation, making inflation protection more important than chasing growth alone.
Key takeaways
- Dylan Grice says Gates’s roughly $25 billion stake in Republic Services is a model for inflation protection and diversification away from tech.
- He argues long bonds are risky because fixed coupons get eroded when inflation rises.
- Republic Services is presented as attractive because revenue is growing about 9.9% while earnings are growing 12.5%.
- Grice says scarce landfills and regulated waste routes create a deep moat and stable cash flow.
- He recommends owning assets that can raise prices above the inflation rate, including specific stocks and real estate.
Notable quotes
“Bill Gates parks most of his personal money. And the lessons that we can get from that as investors”
“he owns $25 billion worth of that stock. It's the single largest position, personal position, outside of Microsoft”
“Basically, a million dollars over 25 years would be worth about a half a million dollars”
“this is a stable, inflation-resistant, cash-generating business”
“you want to make sure that you own companies that can raise their prices ahead of the inflation rate”
How the episode opens
Good morning. This is Dylan Jovane with Behind the Market. Happy Tuesday.
Today is Tuesday, September 1st, first day of September. Today I'd like to talk about the very surprising place that Bill Gates parks most of his personal money. And the lessons that we can get from that as investors.
Really, cuz they're very, very profound lessons, fundamental lessons, very important lessons for us to learn that I want to share with you. First of all, the place is, I'm not going to keep you waiting any longer. It's Republic Services, the old Republic Industries, the waste management company.
And he owns $25 billion worth of that stock. It's the single largest position, personal position, outside of Microsoft. And you know, there's a lot of very, very important lessons here.
And what made me want to talk about them was I've been trying to warn you all about inflation. You know, basically inflation and why long bonds are so dangerous. Really, because then you get basically a fixed coupon with variable inflation.
So, it eats away at the value of that coupon. Basically, a million dollars over 25 years would be worth about a half a million dollars. So, how do you protect yourself against that?
Very, very important thing. Well, Republic Services is how Bill Gates protects himself against it. Also, how he diversifies a large amount of his tech.
A lot of us own a lot of tech. We own a lot of Mag 7. Bill Gates owns Microsoft, obviously.
But, how do you diversify against it? And this offers some very good clues that could benefit you. And it's clues that folks have used for many, many, many years.
So, why Republic Services? Well, this is a stable, inflation-resistant, cash-generating business. Remember, we're talking about protecting ourselves against inflation.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- bill gates investments
- inflation hedging
- long bond risk
- waste management value
- fiscal dominance vs fed dominance
Companies and tickers mentioned
- MSFT
- RSG
- DE
- ECL
- AN
- SDGR
- Microsoft
- Republic Services
- Deere
- Ecolab
- AutoNation
- Schrodinger
Watch the episode
Watch “Why Gates Bets on Landfills While Everyone Else Chases Tech” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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