Now, it’s a well-known fact that if Bill Gates didn’t diversify his portfolio, and chose instead to keep his wealth entirely in Microsoft stock, he’d have been much better off over the years. But diversification is generally considered to be a good thing over the very long-term, so we can’t blame him for trying to identify other world-class companies to put his capital to work in over time.

Here are three of his top picks he’s held for a long time, and why I think they have the potential to continue outperforming over the long-term.

Bill Gates is one of the most notable investors and businessmen of all time, and he’s continued to invest heavily in the market following his departure from Microsoft.

Here are three of his long-term holdings I think investors may want to consider as core portfolio positions for a long-term hold over time.If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.Canadian National Railway (NYSE:CNI) is among the top railroad operators in North America, with more than 22,000 route miles of track laid from Canada to the Gulf of Mexico. One of the true beneficiaries of the economic boom we’ve seen in recent decades, CN Rail remains a top highly-cyclical pick for investors like Bill Gates that want to place a bet on the future health of the North American economy.

Impressively, as of Q1 2024, 40 investors held $13.53 billion in CNI stock, with the Gates Foundation Trust owning more than half of this amount ($7.22 billion). That speaks to the level of conviction Mr. Gates has in the company and its long-term prospects, relative to its peers in the railroad sector.

CN Rail has maintained a healthy dividend over time, with CNI stock currently yielding 2.1%. However, it’s the stock’s long-term capital appreciation profile that many investors (Bill Gates included) clearly like to see. Over the past 20 years, CN Rail’s stock price has appreciated more than 10-fold excluding dividends. That’s the kind of return investors want to see over a long-term portfolio holding.

The company’s recent results have been strong, and despite industry volatility, there’s a lot to like about the company’s leverage to overall freight growth. The company expects 11.2% growth this year, and more than 25% growth in fiscal 2025. Thus, with a double-digit annual dividend growth profile, this is a stock that could continue delivering meaningful returns for decades to come.

Renowned for its yellow machinery, Caterpillar (NYSE:CAT) has become the manufacturer of choice for heavy duty construction and mining equipment. Another highly-cyclical pick of Mr. Gates, Caterpillar benefits from long-term spending trends in industrial activity. With a number of on-shoring trends picking up steam in recent years, this company could have a nice growth profile that’s being undervalued by the market. And at a price-earnings ratio of just 15-times, I certainly think that’s the case.