Ben Berkowitz is the business news editor at AOL. His weekly column highlights business stories with significant implications that were overlooked at first glance.
The story you didn't read this week but should have is that Bill Gates is heading for the exit on housing and energy stocks. When the world's richest man, who certainly has money to burn, says "nah, no thanks" to an entire sector, pay heed.
Gates sold out of a laundry list of stocks: KB Home (NYSE:KBH), Centex Crop. (NYSE:CTX), Pulte Homes, Inc. (NYSE:PHM), Lennar Corp. (NYSE:LEN), Beazer Homes USA, Inc. (NYSE:BZH), Ryland Group Inc. (NYSE:RYL) and WCI Communities, Inc. (NYSE:WCI) in the housing space; and AES Corp. (NYSE:AES), Chevron Corp. (NYSE:CVX), Consolidated Edison, Inc. (NYSE:ED), Dominion Resources, Inc. (NYSE:D), Duke Energy Corp. (NYSE:DUK), FPL Group, Inc. (NYSE:FPL) and Ameren Corp. (NYSE:AEE) in energy and utilities.
His move in housing was particularly striking - a November filing by his foundation showed new positions in a number of home builders, only to then sell the shares by Dec. 31.
Could it be that the housing market is just so lousy that Gates does not feel compelled to bother? This is a man who is so rich that, if he sold off everything he owned, he could give every man, woman and child in the United States something like $160 and still have plenty of money left over for the Egg McMuffins he was once known to favor.
Fed chairman Ben Bernanke took some heat from Congress this week over his assessment that inflation was a bigger risk than slow growth or the slumping housing market. In fact, he seemed to think that housing was settling out nicely and things were turning around.
Maybe Gates does not believe him. All of the data still looks pretty bad - sales are perking up but prices are sinking like lead weights in a lot of places. Permit activity is unspectacular as well.
The less puzzling move is Gates dumping out of utilities. AES has problems in Venezuela, Dominion is going through a split right now, FPL just had a mega-merger fall apart, Ameren has regulatory issues in Illinois, ConEd has its problems in New York, and Duke and Chevron appear to have gotten caught up in the fallout.
Perhaps it's an effort to look more environmentally responsible; the Gates Foundation has been criticized of late for some of its holdings and the ways they might conflict with some of its socially-responsible programs. So, okay, you can see why getting out of utilities that burn lots of gas and operate nuke plants and such might make you look a little more shiny and socially conscious.
But home builders? That's more puzzling. And for anyone who has recently bought real estate (cough, cough), not a little bit disconcerting.
Retailers can't wait for Black Friday, open Thursday
Tiffany's serves up solid quarterly earnings
Cramer on BloggingStocks: This bullish retail story looks like a good fit 
Reader Comments (Page 1 of 1)
2-18-2007 @ 7:41PM
lindapetruzziello said...
now that we know what Gates has sold, what is he buying?