Warren Buffett: Serious Investors Are Not Interested In Owning Gold
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- Опубликовано: 3 мар 2023
- Warren Buffett has spoken on a number of occasions about why investing in gold is a bad idea, and in this video, he compares investing in gold to investing in the stock market, and how each have performed over the long term.
This video was filmed in around 2004-2005. This video was created in 2022 -2023
Berkshire bought Barrick.
You can have all the gold in the world in one hand, or you can have in your other hand 7 Exxon Mobils, all the farmland in the continental US, and $1 trillion cash...which one would you rather have?
I’ll take the gold. 7 Exxon mobiles they are stocks the one thing you know about any stock for sure is sooner or later they become worthless. Eventually they will be run by incompetents or crooks & go bankrupt. The energy industry has special problems besides the usual. It is despised by the American communist party i.e the democrats who want to put them out of business they are already having their drilling rights which they paid dearly for being made worthless by drilling bans . The democrats are now the permanent ruling party. 93% of the federal bureaucracy are democrats they run the government. All the farmland? Nobody owns any land you rent it from the government. Try not paying the property tax on “your” house & you will find out who really owns it. Of course the government has never been shy about raising the rent. Depending on whose numbers you believe cash has lost about 95% of its value just since the fed was created in 1913. The average fiat currency last about 30 years the dollar has been UN backed by gold since 1971 it’s living on borrowed time since then
good luck buying an Exxon mobile or farmland
Only keep slivers and shards for chaotic emergencies I say.
Commodities, commodities, commodities.
When will BH's shareholders simply shut up? We have 6 minutes of Buffett and 22 minutes of BH shareholder public self aggrandizement.
It should me made clear that gold is a good mean of saving wealth rather than investment.
Except it isn't.
Its a terrible way to save wealth because there is no interest or dividend.
Is it though?
You need to be sure that somebody will buy it from you in the future. How can you know that will be the case?
If that can be guaranteed and at an appropriate rate then yes I agree Gold would be an excellent way of keeping your wealth in “stasis”
@@Living_Matrix1 the government says inflation is running at 10% the real rate is a good deal higher. The dividend yield on the S&P 500 is 1.53% on the 10 year treasury 4% that means in terms of purchasing power (which is the only thing that matters) you lose 8.5% & 6% respectively. Of course with rapidly rising interest rates you have huge capital loses on 10 year bonds. Ok what did gold do recently since 2000 gold went from around 250$ per Oz to about 1940$ now . A seven fold increase. The Dow went from about 10,000 to 34000 not bad but about half that of gold. Ok it’s never been a good idea to invest with a rear view mirror. Of course you should have a few gold & silver coins as a catastrophe hedge but most of your PM investments should be in mining shares which have better than average dividends. Maybe gold has seen its best days & it’s time to move on. Lawrence kotlikoff a noble prize winning economist from Boston university so I think it’s a safe bet he knows how to add puts the unfunded liabilities of the US at over 200 trillion $ in 2015 not now . They are far bigger now. They are unfundable at any level of taxation so how are we paying for it now. The treasury is issuing debt. Who is buying the debt nobody except the federal reserve board. Where do they get the “money” out of the thin air. Venezuela already tried that idea didn’t work out to well.
@maalikserebryakov if the world changes so much that refineries stop buying silver to sell to manufacturers then the gold will be the only thing used as currency. Until that day, gold and silver can be sold extremely easily online or in local stores. There are many industries that support gold and use it in manufacturing. It's not a Pokémon card 😂😅
I think gold is definitely better than holding paper money. But that’s a comparison between two idiotic investments.
No it is not. It is real simple. You should need to find a business that churns profitable dollars. And you need dollars to invest in those businesses. Like imagine you were investing in a local piza shop or car dealership. The business has cash flow year after year. Churning dollars. Doesn't matter if it is inflation or deflation, he is churning profitable dollars.
Like choosing between a handful of horseshit or a handful of cow shit. There’s other options
@@tomdallas3690yes but we’re talking long term wealth preservation.
No doubt stocks are better for increasing wealth.
But gold will always be better for keeping your wealth in stasis than currency whose value goes flying left and right at the whims of political realities
Warren actually traded silver not long ago and he sits on a large cash balance and bonds which gold is simply an alternative.
It’s hard for unproductive assets to beat productive assets over the long term 🎉
Stocks selling at 40 times earnings aren’t productive assets they are casino chips. You are buying them with the hope that some bigger idiot will pay even more.
but he did buy silver once;)
For the type investor that makes regular transactions in the millions, gold is difficult to use. There will never be a time when i own so much gold that i couldn't carry it in a backpack.
I guess im dumb...or maybe realistically i will never have to deal with his level of wealth. "Count your blessings"😅
Precious metals are a nice to have hedge for the little guy. Just in our times look at Turkey, Lebanon, Argentina, Sri Lanka etc what happened to their currencies.
I'm sure their citizens would have liked to have some gold stashed.
Any asset will do that. A barrell of oil will hold its value just as well. So will most stocks.
I doubt anyone wished they had gold. You can't buy anything with it and it's difficult to transfer. People in those countries typically want US dollars. It's stable and can be easily traded.
Did you watch the video? Someone asked exactly that and Buffett explained exactly why that's stupid.
Nobody in Turkey wishes they had gold to buy food. That whole "hedge" concept of gold fails the test on so many levels, including todays current inflation situation.
Everyone of those places you mention would have fared much better had they held US currency when their native currencies were more solid. But in the end, a failing local currency you can't replace with another... you still earn and pay in the failing currency. What little you may have to exchange will not go that far. Only the wealthiest would have hoards of foreign cash to use.
@@JayandSarah What happens is that people begin to use dollars to pay wages and buy goods. This happens all over the world and has happened in a few of the countries mentioned.
I hope the guy at 8:00 didn't sell his shares - his observatoin has not aged well about gold outperforming BRK.A/B
The guy at 8:00 or so got completely owned lol. Thought he was being edgy.
Yeah he has a bad case of short-term thinking.
When you are buying something you speak bad on it, its when you are selling you speak good on it
Hell, this is from 2005 if you listen closely. Warren said 1940 gold was $35 per ounce and 65 years later it's $ 400. I see gold at $1938 as of 9/5/23.
yup wonder what he thinks now
Take into account inflation over the same time period. Compare golds growth rate minus the inflation rate to the sp500 and the djia
Am I missing something, or is gold now being 2K/oz not a great ROI for $35/oz?
not over decades. The same 35 dollars put into an SNP index fund would be worth 10s of thousands, not 2k
Over 90 years?! That's 4.6% per year. If you consider 4.6% a "great" ROI, I'd love to hear what adjective you'd use for Berkshire's 20% per year average since 1965!
You are definitely missing something alright, lol. Wow.
The stock market still blew gold away.
And dow moved how much?
"it's very hard for an unproductive investment to be productive investment over any long period of time"
lol its got an avg yearly yield of 12% within the last 20 years.
@@truthseeker6975 7:55
Yes, owning a farmland you can still eat
Even funnier coming from buffet in a way because he's old enough to have saved in gold back dollars
Gold = Unproductive investment.
And, oh yeah, it's no fun hanging out with the gold bugs...🤣🤣🤣
Yes, buy shares in a company that does something useful and in 10 years it will hopefully be bigger and more profitable, so more valuable and will give dividends along the way. Buy gold and in 10 years it will be worth whatever anyone feels about it, and no dividends.
@@Ken-er9cq Civilization has a long running track record for being illogical and unfair. Every now and then some wise long-term investors are able to identify 'large' disparities between first principles and fundamentals and gross govt and institution stoopidity - and maybe have the balls to go against the herd and back up the truck. For myself taking on bold positions in these environments has been uncomfortable because no matter how much information I think I have on my side I know the predictions are never perfect, and at worst could be incorrect for numerous reasons.
POV: He's been stacking his whole life, he just wants you to think it's worthless so he has more for himself.
If you think Buffett has been stacking gold you don't know anything about anything.
lol fr these people are suckers
gold has a 12% average yield, this video when it was made gold has tripled 3 times over in price. haha who's laughing now.
@@truthseeker6975Buffet still is the one laughing because Gold still isn’t shit compared to Berkshire Hathaway shares.
A compulsive spender can spend on precious metals and still have value left afterward. It's a good gamble for some people and situations. It's not going to pay a percentage, but it can be converted into a good investment or cash.
"A compulsive spender can spend on precious metals and still have value left afterward." Since this would also be true of other investments, this reasoning doesn't differentiate precious metals as being a "good gamble."
@J T it's all always a gamble. But it's always a simple equation as well. The bank can freeze your account for a variety of legitimate reasons, or someone can empty it from overseas. You are correct, there's a lot of nonsense to avoid.
productive assets will do better
according to portofolio visualazier from 1972 gold made 9.2% yearly
yup the stats speak alone
What was the inflation rate for the same period
@@truthseeker6975he didnt factor in inflation
Spx has returned 10.7% cagr not counting the dividends.
If you own gold, it is a store of value for you. If you don't own gold, it is not a store of value for you. Ownership bias prevails.
Gold has returned 7.71% since it was freed up for investment in 1971, beating out everything else except for US equities which have returned around 10% on average. It's not the 1930's anymore Mr. Buffett.
The inflation rate for the same period is 7.7%. It didn't "return" anything, gold doesn't distribute dividends.
@@dfha797 So gold kept up with inflation while US stocks would've yielded you another 2.25% over the same period and with greater risk. Woop-dee-doo. And dividends don't matter. Everytime you get paid a dividend the price of the stock/fund drops accordingly. It is wise to own both gold and stocks as gold has been proven to reduce the volatility of your asset portfolio over time.
It’s not an investment, it’s a hedge against inflation.
His point was stocks are a hedge against inflation too. Doesnt matter what currency you use, dollars or seashells. Owning anything physical (oil, land, gold, or a company) are all hedges against inflation. Stocks are particularly better because not only are they a hedge against inflation, but they are also an investment.
Gold is money not an investment
And so are seashells... whats your point?
If you want to invest in gold you should invest in a gold mine.
NEVER invest in gold mining stocks, the margin is safety does not exist and you are putting your principal at risk
Gold isn't productive but it also has no risk of going bankrupt, along with reduced risk of a govt seizing it.
It's a commodity the same as oil or wheat but can be stored more easily than the others.
A sensible investor should be aware of different risks in the environment and if you need to store money when shares are over inflated by excess money supply, in a negative interest rate environment then particular asset classes come to the fore.
I would love to buy a hundred acres of farmland in Nebraska but I'm not able to farm nor organise someone else to, and there are no FTSE 100 stocks that do this.
All respect to Warren who is giving advice that works for him but his resources are magnitudes beyond what many ordinary people can draw upon when making their investment decisions.
You can buy farms. Berkshire has.
@@andrewmayo9400 buying Berkshire Hathaway is not buying a farm
@@theavantgardener5199 you can just buy farms. Berkshire has. Almost any commodity will outperform gold. If you want to bet on gold, buy stock in a gold mine at least that's productive, at the end of it you still have all that PPE
Maybe not "bankrupt", but it can certainly go down in value, especially relative to other investments. An index fund won't go "bankrupt" either, and has much greater upside potential. On the whole it's probably less risky long-term than gold, albeit more volatile in the short term.
Lol
I generally agree with them about gold but I see the appeal of metals. For anyone wanting physical metal I suggest silver for a few reasons:
- more silver is used in industry
- recycling silver is often not possible or just doesn't make any sense, even at high prices (unlike gold, which can always be salvaged)
- central banks have huge gold reserves and they're happy to lend it to short sellers, so there will never be a short squeeze. But IIRC only 1 or 2 central banks in the world have any silver at all, and not much of it, so there could be a short squeeze (on the other hand, if the rumors about JPM and market manipulation etc. are true, what's to stop them from continuing that forever?)
- if you're ever bartering with metal, or selling it, you don't want to have to figure out how to get change for a $2000 oz of gold (without getting robbed). Silver's value density is low enough that it's practical, but still high enough that you could store $1 million worth at home
The questions are so laughably stupid I couldn't believe it... scrolled down to find equally stupid comments! Am I really this much smarter than the average investor? I should start investing more seriously then...
The average “investor” is little more than a thoughtless lump of meat driven completely by the instinctive greed to “get rich”.
If you are smart, but remain thoughtful and thorough in your analysis of companies you are going to make a lot of money
Silver and gold are incredibly important in electronics. Anything headed to space will have plenty of gold and silver in its electronics. This is dangerously bad advice. Our supply of gold is currently fixed and it’s utility keeps going up.
So why isn't the compounding happening?
Supply is not at all fixed! In fact, the amount mined every year is about 10x the amount used in the electronics industry. And the gold in electronics mostly isn't even being recycled right now, so that's another possible source for gold if people run out of mines.
Wrong. Gold is good as say 5% of a diversified portfolio. All governments hold gold.
Gold is gay
@@giffy7962u can't afford it 😂
Gold is an absolute worthless investment, no upside at all. May as well hold cash
‘Gold is money everything else is just credit “ JP Morgan . The one thing you no for sure about any stock hold it long enough & it will be worthless. Eventually every company is run by the inept or worse crooks or eventually its product becomes obsolete. That may be true even of farm land . Warren’s friend Bill Gates is working on cell cultures that may even render farmland obsolete. Down through thousands of years of history gold has been valuable. Even gold could be rendered next to worthless if breeder reactors for instance make it abundant. People can’t be rational about gold they either love it or hate it to me it’s just another asset that can be good a certain times. I understand why Buffett hates gold if you had history’s longest running & most successful counterfeiting conspiracy bailing out your gambling losses would you want it to ever end?
The question was, "Is gold a viable alternative to paper currencies?" The answer? "We would much prefer some asset that is going to be useful..." Talk about dodging the question.
Then you have to pay for the security of housing said gold. Then you pay the premiums to enter/exit your gold position. As well as finding someone to buy it. So yeah, it makes sense to favor currency instead of gold. Warren has been very clear how he feels about gold.
It's not dodging. He's stating his preference of what he'd rather hold. He'd rather hold a stock certificate of Geico than gold or paper currency.
It's an idiotic question since they're both stupid investments and neither has anything to do with Berkshire, which is a better investment than either one and also the subject of the meeting.
People confuse investing with owning or savings. You wanna invest on hot product or service that has essential value and use on many businesses as well as consumers. Because you wanna make big money out of those investments. However when sh1t hit's the fan and economy drops like a depression or societal collapse you wanna trade in that worthless paper with something that has value and lasts forever and can be concealed easily from unsavory characters. That's when precious materials like gold, silver and gemstones come in. Investing in gold is not a smart idea because the value of gold is not that high and fluctuates often which will make you lose money rather than gain.
He talked about that. He said hed rather own land than gold and hed rather own sees candies over both. The reason is that sees candies continues to produce income regardless of whether the means of exchange is gold, dollars, or seashells