This page has been archived and commenting is disabled.
Experts and great Investors
Remember the CNBC interview with Buffet in March? Buffet was talking about stocks, no double dip and gold.
“…I’ve said consistently for the last few years I would vastly prefer to own common stocks than fixed dollar investments over a five or 10-year period. I don’t know any about the next five hours or five days. And that might very well extend to rental real estate, it might extend to farms. I mean, an investment you’re looking for something where you put out money now and that asset that you buy gives you back more money over time. Now, the problem with commodities is that you’re betting on what somebody else will pay for them in six months. The commodity itself isn’t going to do anything for you.
So there’s two types of assets to buy. One is where the asset itself delivers a return to you, such as, you know, rental properties, stocks, a farm. And then there’s assets that you buy where you hope somebody else pays you more later on, but the asset itself doesn’t produce anything. And those are two different games. I regard the second game as speculation. Now there’s nothing immoral or illegal or fattening about speculation, but it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something you expect to produce income for you over time…”
S&P is down some 15% and Gold up some 25% from that interview. That sums up to around 40% outperformance for gold. Don’t forget, Buffet is probably holding the biggest short S&P put option in the world, but on the other hand, the man loves selling insurance, especially with expiry dates where he most likely won’t be around to mark to market.
And for some comparison this century;
Year Berkshire Hathaway Gold Relative Results
2001 -6.2 1.4 -7.6
2002 10 24 -14
2003 21 21.7 -0.7
2004 10.5 5 5.5
2005 6.4 17.1 -10.7
2006 18.4 23.9 -5.5
2007 11 31.6 -20.6
2008 -9.6 3.4 -13
2009 19.8 27.6 -7.8
2010 13 27.7 -14.7
Average 9.43 18.34 -8.91
Table; Daily Markets
»
- advertisements -
Buffet also said that derivatives are financial weapons of mass destruction yet he is invested in them. Soros said gold was in a bubble almost a year ago, and yet he invested in gold before and after this statement. Don't listen to what they say, but watch what they do. Actions speak louder than words.
Either this guy is a 'super genius' or 'super lucky'...
"So there’s two types of assets to buy. One is where the asset itself delivers a return to you, such as, you know, rental properties, stocks, a farm. And then there’s assets that you buy where you hope somebody else pays you more later on, but the asset itself doesn’t produce anything."
I agree... gold doesn't produce anything. I just hope that if I buy it now someone will pay more for it later (their decision to buy gold will be influenced by the market as mine was). BUT if I buy stocks or rental property or a farm, etc. etc.. I also hope that someone will be there to buy what I produce or my services. And that also depends on the state of the economy. In both cases we buy something now in the hopes that someone will buy/pay much more for it later. And this hope is enitely market based. It's an investment based on speculation, on the hope that someone will be around to pay more for it later. And if there is no one then you're stuck with it or sell it for a loss. There is no 'fundamental' difference in these 'types'. But if you only swin in shallow waters then you never really build up strength to swim against the current in deeper waters.
Mr. Buffet... you're a hard nut to crack
Tomato,
Why do you keep posting links to Bullion Direct?
www.AMARK.com metals. Everything else is small fry.
Well, I'm no WB but I am short BRK-B via a put spread. So, far so good.
I guess WB thinks a piece of paper called "stock" has an "intrinsic" value and its not a case of hoping some sucker will pay you more for it than you paid (sort of like RE), unlike an "unproductive" commodity like Au or Ag, oil or food?
One reason I'm bearish on BRK-B and glad I didn't sell someone a long duration naked put on the S&P. Talk about gambling!
Here's my Non-expert opinion on todays trading:
The DXY keeps trying to break above 74.75-.80 range. So far...rejected half a dozen times or more. When that breaks...and it will...then we will see the SPX hit a fresh low for the day. If DXY breaks above 75 with any force...SPX will hit a new low for the year.
and so it goes...
just my non-expert .02
right on target.
not bad for a non expert huh?:-)
already today the Dow has had three 200+ point swings. It is occilating between 10900 and 10800 and someone with the right computer program is making a lot of money. This is insanity.
It's that special software the hedge funds have. Remember Goldman said, "In the wrong hands one could manipulate the markets."
Hmmmmmmmm.
The gold and silver bullion website has gone bonkers! Prices have gone out of control!
http://www.bulliondirect.com/catalog/home.do
So in "rock, paper, scissors" the paper doesn't really cover the rock...