"Gold gets dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Yes, the stock tracks the prices of gold, but the stock beat gold by 45% so far this year.
It sounds like buffet is investing in a mining business not actual gold (albeit they are linked somewhat).
It reminds me of the story of how Steve Jobs got John Sculley, then CEO of Pepsi, to join Apple: “Do you want to sell sugar water for the rest of your life or come with me and change the world?”
He will also sell if he thinks it no longer makes investment sense.
Aside from Buffett, Todd Combs and Ted Weschler each have about $10bn to invest - it is entirely possible that they made this investment without consulting Buffett (they don't have to ask for permission). In the past they've also bought Amazon - another non-Buffett pick.
I find the title to be a bit disingenous.
But once we can mine the lower gravity of Mars, then someone might dig up a gold mine.
And Venus I would suspect has a lot of gold. If we can slow it’s runaway global warming, then we might be able to establish a colony there, and mine gold.
The same concept goes for Mercury.
I’m surprised that the Moon hasn’t revealed trace elements of gold yet. I suspect that it might be buried deep inside the core, where it sunk, while the moon was still molten and forming. If someone can find a gold mine deposit there, then they can build a mass driver to launch it on a return trip back to earth. Or just use it to build new spacecraft in outer space.
With zero-interest rates and quantitative easing, there is no need for countries to borrow money because they can start printing it. At the same time, China controls more and more business processes which leaves less to companies that operate within Goldman Sachs' merger and acquisition world.
Taken even further, market economies could come to an end because they cannot exist in a world where China can be a loss-leader in every strategically important market. If China is poaching TSMC's engineers [1], what does stop them from doing that to all relevant production processes? Either TSMC and all the other companies need artificial profits to pay more to their engineers or there need to be other barriers. Either way, the importance of markets could decline and so could Goldman Sachs.
This.
Already happened with rare earth processing and pharma.
Even if it's not a big deal considering the overall Berkshire investment pool, this is a considerable divergence from their strategy so far. Very telling.
