CNBC News Associate
Billionaire investor Warren Buffett has been adding to his position in waste-management firm Republic Services this past quarter. Should investors follow Buffett and bank on the trash-disposal stocks? James Altucher, managing director at Formula Capital, shared his insights.
“Buffett is not a value investor—he has been a demographics investor,” Altucher told CNBC.
“So if he thinks everyone in the world is going to shave with disposable razors, he buys Gillette; if he thinks everyone is going to use their credit cards, he buys American Express.”
Altucher said both Warren Buffett and fellow billionaire Bill Gates are the largest shareholders of Republic Services [RSG 27.70 
0.07 (+0.25%) 
].
“We’re going to [create] hundreds of millions of [pounds of] trash a year this year,” he explained.
“Knowing that, Gates owns Waste Management [WM 32.90 — UNCH (0) ] as well. These guys have been buying up all the garbage stocks.”
Altucher said he favors the smaller waste management companies such as Stericycle [SRCL 53.65 0.15 (+0.28%) ] and American Ecology [ECOL 14.87 
-0.12 (-0.8%) ].
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