warren buffett
Bill Gates, Microsoft chairman, offered CNBC his view on gold and silver. Meanwhile Warren Buffett compared the performance of the yellow metal to Berkshire Hathaway over time.
after last week and this is ceunsettling. i saw gold down, but i haven’t seen by how much this morning. i don’t know if you’ve seen the quote on that. you were talking about gold prices. down about four bucks. 1641. obviously a huge question people have asked. we’ve seen a big run up in gold over the last four years or so and that’s something that was definitely talked about this weekend here. joe just talked about charlie monger’s comment that civilized people don’t buy gold. this weekend i got the chance to sit down with bill gates. and he’s not a huge gold fan either. listen in. gold today was something that both charlie and warren made pretty clear they’re not a big fan of. what about you? i’m search in thatcamp. historically i did have some silver investments that at a time warren actually had some silver. he got out fairly quickly. i stayed in and did very well on silver. but gold is a tough one because it’s so psychological. and if central banks or the imf ever decided to take advantage and i think countries need liquidity, hey, there’s an asset that’s not doing anything for the citizens. and then because it’s purely psychological, it’s not like people say when it gets to $800 an ounce, people buy four times as much jewelry. there is nothing that steps in as a buyer at any price. it’s just purely other people in the future will think items he more than it’s worth today. if you think the world is scary and people will pan issuing, i’m not saying that theory doesn’t exist, but there is no floor if ever people got that view. do you — we had an invention session with people recently, as this price gets high and you’re looking at a 10, 20 year time frame, the supply equation will change. so the bulls have to offset the fact that there will be quite a bit, not in the near term, but over a period of time and these people are claiming this that they can predict gold prices out into the future, but certainly with equity, you can feel like you you can. well, there you have to understand the innovations in digital mining techniques or some new extraction techniques which actually i think are pretty interesting. and i doubt many people factor that in. we’ve never even talked about the supply picture. but he’s talking about eventually being able to increase the supply of gold. you had a shareholder who asked you you a question about god over the weekend, and your response was pretty interesting. berkshire versus gold. do you want to talk about how that’s performed over the years? yes, but certainly when we took over berkshire, berkshire was selling at $15 a share and gold was selling at $20 an ounce. and gold is now $1600 and berkshire is 120,000. but you take take a broader example. if you buy an ounce of gold today and you hold it at 100 years, you can go to it every day and you could coo to it and fondle it and 100 years from now, you’ll have one ounce of gold and it won’t have done anything for you in between. you buy 100 acres of farm land, it will produce for you every year. you can buy more farmland, all kinds ofthings. and you still have 100 acres of farmland at the end of 100 years. could you buy the dow jones industrial average for 66 at the start of 1900. gold was then $20. at the end, it was 11,400, but you would have gotten dividendses for a 100 years. so a decent productive asset will kill an unproceed ducts unproductive asset. why don’t you join me and buy some you cows. i like your farm land, but you’re in iowa. you love steak. we can have leather, we could hanure, we could have meat. we would employ people taking care of the cows. that little bar of gold that’s worth whatever, we had one in here, i think it was worth like $60,000 or $70,000. i could can get like so many head of cattle for that and be that was my point. but you like farm land. are you too lazy to take care of cattle? absolutely. have you ever tried to take care of cattle? i’ve tipped a few, but i’ve ver — you — no i have not. that’s mean. no, they’re sweet. but they’re not too bright. like me. you can get somebody else to do all the work, give them a percentage of the crop and you can sit back there for 100 years an get a percentage of the crop and you still have the land when you get all through. i will guarantee you that farm land over 100 years is going to beat gold and so are equities. why do you think gold bugs get so irate? because they really come out. yeah, very interesting. if you go on cnbc and say that bonds are kind of a poor investment, people don’t get mad at you. you don’t hear from the treasury. you can knock almost any investment. but when you talk about gold and of course that says something about thei motivation for ownership, they want people to agree with them, they want — they want everybody to get so scared they run to a cave with gold. and caves might be a better investment than gold. at least they’re not producing more caves all the time. so they want people to be as afraid as they are. incidentally, they’re right to be afraid of paper money. their basic premise that paper money around the world is going to get worth less and less over time is absolutely correct. you just disagree with the investmeheory beyond that. right. where they run from that and they should run from it, is where in my view they make the mistake. but they have a correct basic premises. guys, we’ll send it back over to you. a lot more coming up.