Mexican billionaire Carlos Slim topped Bill Gates and Warren Buffett in the money game for the second straight year. The value of Slim's publicly disclosed holdings, in industries ranging from mining to telecommunications, surged about 37 percent, to $70 billion, in 2010, according to data compiled by Bloomberg. The 22 percent jump in Berkshire Hathaway (BRK.A) shares wasn't enough for Buffett to catch up, and Gates's Microsoft (MSFT) stock fell 8.4 percent, hurting his returns even as he spread his investments to other companies.
Slim's best-performing asset last year was holding company Grupo Carso, which almost doubled in value as it prepared for this year's spinoff of its mining operations amid soaring gold and silver prices. Grupo Carso also owns retail, manufacturing, and construction companies. Slim's biggest loss came from a stake in New York Times, which fell 21 percent. Teléfonos de México, the state-owned monopoly he acquired in 1990, was his second-worst investment in 2010, falling 8.7 percent. The carrier's 2001 spinoff, América Móvil, gained 15 percent. Slim's stake in the wireless company was worth $48.9 billion on Dec. 31. Slim, 71, and Gates, 55, both became wealthy through bets on new technologies and were helped by their dominant market positions, says Thomas Russo, who manages about $4 billion at Gardner Russo & Gardner in Lancaster, Pa.: "They basically had the privilege of owning a monopoly with enormous pricing power in markets that grew."
Buffett's returns were calculated from his shares of Berkshire Hathaway, his investment company that holds stakes in Wells Fargo (WFC) and Coca-Cola (KO). Berkshire's A shares gained 21 percent last year and its B shares rose 22 percent. At yearend, Buffett, 80, held a total of $46.2 billion in Berkshire stock. He gave $1.6 billion in shares to the Bill & Melinda Gates Foundation in July as part of his plan to donate 99 percent of his wealth. The data compiled by Bloomberg didn't include money given to charities.
Gates's publicly disclosed holdings amounted to about $26 billion at the end of 2010, down more than 8 percent from 2009. Microsoft stock represented $16.7 billion of the total, after Gates reduced his stake in the company by 80 million shares to diversify his investments. Neither Buffett nor Michael Larson, who runs Cascade Investment, which manages Gates's money, responded to requests for comment. In a news conference on Jan. 31, Slim said he would spend $3.66 billion on Mexican telecommunications, mining, and infrastructure projects. He did not comment on his 2010 returns.
Mexico will be "the emerging market of 2011," says Walter Molano, head of research at BCP Securities in Greenwich, Conn. Growth will come from an economic expansion in the U.S., Mexico's top trading partner, and from investors looking for opportunities outside of Brazil, Russia, India, and China. "Slim is in for a very good year," says Molano.
The bottom line: Strong gains in his mining interests helped Slim top Buffett and Gates last year—and he's well-positioned for another good year in 2011.