Deere Stumbles...No Sweat To Bill Gates

Deere & Company manufactures and distributes various equipment worldwide agriculture equipment such as utility tractors; tractor loaders; combines, cotton pickers, cotton strippers, and sugarcane harvesters; harvesting front-end equipment; sugarcane loaders and pull-behind scrapers; and tillage, seeding, and application equipment.

Deere reported their fourth quarter earnings on Thurs. Deere reported a net profit of $722 million or $2.27 / share and sales that rose 5% to $9.896 billion beating expectations of $8.467 billion. Despite beating expectations, the stock fell 5% due to dismal forward guidance.

Deere & Co. delivered a more cautious outlook than expected for the year ahead as simmering U.S.-China trade tensions and difficult growing conditions keep North American farmers from replacing large equipment, the company’s top moneymaker. The shares tumbled to a six-week low.

Demand for machinery has taken a back seat as trade concerns have farmers worrying about who will buy their products, while financial-services results have come under pressure due to operating-lease losses. Construction equipment purchases are also set to decline.

Global sales of agriculture and turf equipment are forecast to fall 5% to 10% for fiscal 2020, driven by lower demand for large equipment in North America. Construction and forestry equipment sales are anticipated to slide 10% to 15%.

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Bill Gates through his Cascade Investments co. owns 10% of Deere’s outstanding shares. He’s been buying Deere shares for years. Like Buffett, Bill doesn’t get boggled down by the day to day noise of price action because Cascade Investments has been buying land all around the US as well. So what gives, what’s Bill’s interests in land and Deere?
Bill and Melinda Gates have given away more than $45 billion through the Bill and Melinda Gates Foundation, which primarily works to combat global poverty.

Bill and Melinda Gates are also working to end Ebola and polio; they donated more than $50 million in 2014 to help fight the Ebola virus outbreak in West Africa, and they pledged $38 million to a Japanese pharmaceutical company that is working on creating a low-cost polio vaccine.

Even before Bill and Melinda Gates got married, they had conversations about spending a lot of their time on philanthropy as they felt it was their responsibility as wealth people to contribute in a meaningful way to the betterment of society.

Regarding Deere, Bill thinks the world needs replay of the “Green Revolution” of the 1960s and 1970s, when new farming technologies, including new seed varieties of rice, wheat, and corn, increased the amount of food available and decreased its price. His case is quite simple, a small investment and interest will allow poor farmers to feed their families, but if ignored almost 10% of the world’s population won’t know where their next meal will come from.

How could you not be a fan of Bill and Melinda or anyone trying to better society. Although I'm not wealthy, my goal at this point in my life is to try and better at least one life and I encourage you to do the same with the goal that the next generation lives a better life then us.