Warren Buffett figures that for a long time investor like himself gold is practically worthless. Warren doesn’t sell what he buys, he expects what he buys to return him a nice dividend. Since gold investment never earns a dividend and can’t make money until it is sold at a profit, his investment strategy does not allow him to buy gold as an investment.
Warren Buffett has what appears to be a magician’s uncanny ability to find stocks that are underpriced and to buy out the entire company that is issuing those stocks. His path to billionaire status is not paved in gold. He has always made disparaging remarks about gold as being the most worthless of metals that man digs out of the ground. His absolute hatred of gold must have deep seated psychological roots as he pretends to assume that gold was never mined in California.
A famous quote made by Warren on the subject of gold that keeps being told as if to downplay the intellect of a man who went from earning $12,000 a year to buying out entire corporations and being known as the wealthiest man on planet earth is the following:
“Gold gets dug out of the ground in Africa, or someplace. The we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It as no utility. Anyone watching from Mars would be scratching their head.”
Warren sees no point in buying gold because he is like the comic strip hero,”Daddy Warbucks” investing in the country that he lives in and doesn’t plan to escape from. His future is dependent on his corporations making a profit and giving him his share in dividends. Gold does not inter into the financial functioning of corporations who deal daily using the monetary exchange rate for the currency that they are doing business with and gold does not play into that action.
If one of his corporations is getting a 2 billion dollar loan to build a new plant, that loan is not sent in buillion. Warren would rather that
was not the standard for any currency since he would be able to order the Denver mint to print more and more dollars based on his projections of what his corporations are capable of earning. Gold is a stationary, earth product that basis its value on the quantity of it and on its scarcity or overabundance in terms of demand for it in the world’s financial sectors.