I really liked this piece by Matt DiLallo on why gold is so hated by Warren Buffett. He provides the juicy details, but I’ll give you the quick and dirty rundown:
Gold is an unproductive asset.
Gold is valuable largely because people believe it’s valuable.
It’s not that Buffett is an ideologue or just on some anti gold rampage. I think there are some logical and great lessons to be learned here:
We build wealth by increasing our own production. That is, we become more valuable to others within society when we do things that they find valuable. This is why society rewards great innovators and people who tend to work hard.
Betting on commodities like gold is often a bearish bet against human productivity and innovation. When you buy a block of gold you are essentially buying an insurance asset whose value will increase if the value of dollars collapses or falls. In other words, you are betting directly against the ability of US workers to produce and maintain the value of the dollar.
Betting on gold is largely a bet on faith. That is, you are betting on the idea that someone else will believe gold is more valuable in the future. Although gold is valuable to some degree as a commodity there is also a substantial portion of the population who wants to own gold because it is viewed as money or protection against paper money. I’ve referred to this in the past as a “faith put”, a premium in the price that inflates its value due to sheer faith.
Founded by Mr Buffett in the 1960s, Berkshire has amassed more than 70 businesses since as the well-known investor uses the cash generated by his insurance businesses to buy other companies as well as invest in equities.
Despite the company’s acquisitive nature, Standard & Poor’s lifted its outlook on Berkshire earlier this summer to ‘stable’ from ‘negative’ as it affirmed the company’s ‘AA’ rating.
The company’s A shares, which carry the vast majority of Berkshire’s voting rights, have advanced 12 per cent this year, outpacing the broader S&P 500.
Berkshire’s B shares, which were launched in 1996, also reached a record high on Thursday, rising 0.7 per cent to $133.98.
Last week I stumbled across this excellent video about Graham which includes old clips from his investment classes as well as some of his former students (including Warren Buffett, Rob Brandes and Irving Kahn) giving interviews about the effect the legendary investor had on them:
There’s no doubt that Warren Buffett is ridiculously rich but if you made a few pips on the USD/JPY dip today and you’re feeling flush, then take a quick look at this tool that shows how much of a drop in the bucket your salary is compared to the $13.5 billion Uncle Warren made last year.
And if you’re admiring Messi’s magnificence today note that it took Buffett less than two days to earn Messi’s $64m paycheck last year.
“Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.” Warren Buffett
What Happened Yesterday to PETRONET LNG -Yes our Target of 185-190 is intact
What Happened to ARVIND Mills ?Our Subscribers holding and added more…Big Big move on card.
We Love Godrej Industries—Target told u 370+ very soon.
We Love Jain Irrigation–Big News on card !
Grab :June Future for Short Term Quick Gains ,But We Like July Future !
Sell this Stock on Budget Day & Remember us (Don’t ask anything )
Today ,Just Watch 381.75 level.
Yes ,Once crosses with volumes…………….Grab it and Just RELAX upto 2:30 pm
Intraday sharp Rally upto 395————–398 on card.
Yes ,Rising Wedge +Big Boys had Met Mr.AJ at Delhi
Today or Tomorrow ???????We Don’t know it may kiss 410-415+ level.
Who is Coming out with this Report ?
LAND BANK 7000cr (delhi plot)+2000cr (Mumbai Chennai properties)+neotel 4000cr =13000cr
At rs 380 mcap 11000cr !!! core business fy14 of20000cr free !!!
Our Short Term Target is 415 to 445+ level (Yes ,Buy 400 ,410 June Call .Buy 450 July Call if u get !
Many More things will be out ,But TRADERS can see Rocket like move in next few hrs
If you invest in the stock market you’re almost 100% certain to have heard of Warren Buffett. Indeed, you’ve probably read books about him, or you might have read his annual shareholder letter, or even been to the spectacle that is the Berkshire Hathaway annual shareholders meeting.
Now’s your chance to watch an interesting documentary that offers an intimate look at the life of Warren Buffett. The documentary offers an eye opening view of how he runs the company (complete with a tour of his office), the annual shareholders meeting of Berkshire Hathaway, and a peak at his many eccentricities.
Of course the film also reviews how he made his money, how he operates, how he came to operate in the way he does, and how he thinks about his wealth which is in the tens of billions of dollars.