It was reported this week that famed investor Warren Buffet sold a large portion of his bank stocks and bought a big position in Barrick Gold.
Warren Buffett’s Berkshire Hathaway Inc. unloaded more than a quarter of its stake in Wells Fargo & Co. and about 61% of its position in JPMorgan Chase, while acquiring a new position in Barrick Gold Corp.
This is significant to my mind as Buffet in the past has poo-poo gold pretty significantly. He has said the following over the years.
(Gold) gets dug out of the ground in Africa, or someplace. 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.”
“I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money, and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.”
Now granted he is not actually buying gold bullion, but he is buying a major miner of the metal. More significantly to my mind is that he is selling major stakes in his bank holdings.
I think he understands that we are in or a period of negative interest rates and financial repression. Banks will not be doing well in that type of environment.
Mr. Buffet did well in a fiat backed post WW2 neo-liberal globalist setup. That is now changing as the center of power shifts to Asia, globalism is in decline, and over indebted western nations becoming ever more ineffectual and veer towards statist policies.
I respect Buffet and he has done well but Ray Dalio summed up the reason to buy gold in this talk at the CFR. I much prefer Mr. Dalio’s reasoning.
“If you don’t own gold you don’t know history”
The people in the audience laughed when he said he owned gold. This was back in 2015.
Wonder if they are laughing now?
In the Actionable Intelligence Alert Newsletter, we have been advocates for owning gold for several years. Our gold stock picks have done extremely well. One in particular is up almost 300%.
As we are in a multi-year gold bullmarket I expect we will even do better than that. As more sophisticated investors begin to move into gold and gold mining stocks, we will see multi-baggers. Do not get left behind subscribe to Actionable Intelligence Alert Now.