Bill Gates: How To Achieve A 16.5% Return Per Year

Bill Gates, a savvy investor to say the least has managed to beat the market throughout his investing career. Here's some tips that Gates has used in order to do so...

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The very first thing that you probably think of when it comes to Bill Gates is nerdy businessman. You don’t necessarily think, extremely smart investor. Yet he is actually both. He amassed a big fortune by creating Microsoft, but he turned this big fortune into a massive fortune through extremely smart investing. Obviously alongside his lead investor Michael Larson. So in this video we’re going to go over the tips and tricks that Bill Gates used to amass this fortune. If we look back over the past 7 years he achieved an annual average return of 16.5%, here’s how…

Tip 1: Ignore The Noise Focus On Buying Great Companies

Tip 2: Pick Good Managers!

Tip 3: "To win big, you sometimes need to take big risks."

“To win big, you sometimes need to take big risks”. This is a direct quote from Bill Gates. And what he’s trying to say is that sometimes if you’re overly conservative with you investing style you’re going to miss out on those high returns. Best example that I can give to you with this is ok what are the companies that have done the best over the past decade. They’ve been those highly innovative technology companies. The likes of Netflix which has gone up over 6,500% over the past 10 years. The likes of Amazon, that’s gone up over 2000%. Or Apple over 1,100%. A lot of people if you invested in these stocks would say ohhh, you’re taking a major risk. And yes that’s true, you are taking a major risk. But you know what else you’re taking on. A massive opportunity. An opportunity to make extremely high profits, in the thousands of percentage points. This is what Bill Gates is getting at when he’s saying “to win big, you sometimes need to take big risks.".
If you apply this to investing, don’t be too afraid to invest early in the likes of Tesla, Amazon, Netflix etc, if you see tremendous upside in your stock…

Tip 4: Patience Is Key When Investing

The thing you need to realise about a lot of investments, is that inevitably you’re going to see a lot of up’s and downs. You know for all those Tesla investors, you know exactly what I’m talking about. There’s been many a times when everyone thought this stock was going to hell in a handbasket. When Elon Musk started tweeting about Tesla been taken private at $420. Or when he went on the Joe Rogan podcast and did some subjectively naughty things. People were saying Tesla, this electric car company they’ve got no chance of making it. But those who stayed patient, and saw the value of the company, well they made a great amount of profit.
It doesn’t matter what type of investor you are, if you can’t handle the ups and downs of the stock market, the vicissitudes, you should not be playing the game at all…

But you know it’s the age old story, if you can handle those ups and downs over time you will make a lot of money. Warren Buffett he made 99.7% of his wealth after the age of 52. This was all due to patience and compound interest. With time and smart investing, his portfolio just grew on itself. Like a snowball, but once it’s rolling there’s no stopping it getting bigger. However you do need the patience to build that snowball in the first place and that’s what Gates is getting at with this rule!

Tip 5: Diversify
One of the smartest investing decisions Bill Gates ever made was choosing to diversify and not have all his wealth in Microsoft. You see before the huge technology bubble crash in the year 2000, to sell a deep amount of his Microsoft shares and use that money to invest in other companies. The likes of Warren Buffett’s Berkshire Hathaway, Canadian National Railway, Waste Management and a bunch more stocks. This ensured that when the crash did occur, he was not entirely reliant on one technology stock for his entire net worth. He was diversified and did not get hit as badly.

You see right now Bill Gates only has about 15% of his portfolio in Microsoft. Then he’s got 47% in Berkshire Hathaway. Which in itself is extremely well diversified. Because what that’s an investing company, that buys a whole range of different stocks.

Because of his diversification Gates knows that even if one of his stocks fails and goes bust, his net worth is safe…

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DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.

Видео Bill Gates: How To Achieve A 16.5% Return Per Year канала Cooper Academy - Investing