Why The World's Billionaire Investors Buy Precious Metals

Tyler Durden's picture

There are always lessons that can be learned from the “smart money”. Unlike regular investors, Visual Capitalist's Jeff Desjardins notes that billionaire money managers like Ray Dalio and Stan Druckenmiller are professional investors. They have entire institutional teams at their disposal, dive deep into the nuances and complexities of the market, and spend every waking moment of their lives thinking about how to get more from their investments.

They want to make money – but they also want to execute on strategies that will protect their wealth and build robust portfolios that can withstand any type of macro event.

TURNING TO GOLD

In recent months, some of these elite investors have turned to precious metals like gold as a part of their overall investment strategies.

In the following infographic from Sprott Physical Bullion Trusts, we explain why these investors are adding precious metals to their portfolios, the underlying tactics, and the best quotes each investor has on assessing today’s market.

Courtesy of: Visual Capitalist

 

Why are these billionaires buying precious metals?

Their cited reasons can basically be summed up with six categories: wealth preservation, store of value, inflation hedge, portfolio diversification, future upside, and investment fundamentals.

WHAT BILLIONAIRE INVESTORS ARE DOING

1. Lord Jacob Rothschild

In late summer 2016, Rothschild announced changes to the RIT Partners portfolio because he was worried about very low interest rates, negative yields, and quantitative easing, saying they are part of the “greatest monetary experiment in monetary policy in the history of the world”.

His solution? Buy gold to help preserve wealth, and as a store of value for the future.

2. David Einhorn

Einhorn has a similar assessment. He believes that monetary policy is becoming increasingly adventurous, and that this – along with the policies of the Trump administration – will eventually lead to large amounts of inflation.

In February 2017, he shorted sovereigns, and bought gold.

3. Ray Dalio

Ray Dalio is the founder of the world’s top hedge fund, Bridgewater Associates, but he’s also no stranger to gold.

If you don’t own gold, you know neither history nor economics.

– Ray Dalio, Bridgewater Associates

More recently, in 2016, Dalio is quoted as telling investors to own a well-diversified portfolio that is 5-10% gold.

4. Stanley Druckenmiller

Druckenmiller, some people argue, is the best money manager of all time.

Lately, he’s placed his bets on gold as well, but for different reasons than the above managers. Druckenmiller has always placed big trades with lots of conviction, and in February 2017 he put his money in gold because “no country wants its currency to strengthen”.

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TimeIsTheFire's picture

Why are these billionaires buying precious metals?

Because they can afford it. Now, please stop peddling gold so aggressively. Or go back 8-9 years or so and delete all evidence of doing that on a near daily basis, the performance so far is awful, and a nine year wait is a bit too much of an ask.

Latitude25's picture

What?  You feel threatened by pro gold articles?  What's it matter to you?  If you'd have bought gold at year end the last 3 years you'd be sitting on a nice profit

 

Gods's picture

I agree I snatched up a lot in 2015's lows paid around 1050/z for it. so yes 20% in 3 years not bad I know there where better performers out there however none with the security of PM's.

stacking12321's picture

the negative sentiment by people like timeis, and the lower price, both make a compelling argument for buying gold.

el buitre's picture

I read that a lot of these hedge fund managers are investing in paper gold instead of phyz.  This article doesn't detail their actual investments but rather their public mouthings.  If paper gold goes to zero when the Comex scam goes tits up, and phyz is a moonshot, they will be yuuugely embarrassed.  Some of these guys are one trick pony's from their 2008 shorts.  Jacob "Satan's little helper" Rothschild's wealth at $5B?  ROTFL.  He's long on short hot dogs.

open calender's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

Latitude25's picture

Too much work.  I'll wait for Zucherberg's free money.

tmosley's picture

And if you had bought year end the six years before that you'd be a divorced homeless alcoholic.

Buck Johnson's picture

Exactly, they can afford to buy it.  The issue is where is the gold located and do they have the ability to take it at will.

 

 

abyssinian's picture

Ethereum up 3000% in 5 months.....gold investing is a joke.. Don't get me wrong I love gold but wasted a lot of money investing gold thanks to the CB manipulation....no more gold investing....invest in cryptos now..been telling people here to buy ETH at $50, $80 ,$100 2 months ago, now at $400. Not too late still get in now

Fundies's picture

What don't they buy? 

Dame Ednas Possum's picture

They don't buy the bullshit fairy tale that gold is a barbarous relic that is only held for tradition. 

 

0hedgehog's picture

Right! They feed that crap to the masses to drive them into fictitious currencies so they can own most of the metal out there, which they do, then they pull the rug out while they are sitting on all those pet rocks.. 

McShakingspeare's picture

As the old saying goes. "Invest in gold. Cultivate patience. Become hungry. Cultivate impatience. Sell gold. Buy bitcoin. Live happily ever after"

Latitude25's picture

One thing that saying is, it's not old since bitcoin is not old.  Gold is old and proven.

stacking12321's picture

we're in internet time, baby!
2009 is like the paleozoic era.

Latitude25's picture

So you're saying bitcoin should be extinct by now.  It will be soon after this tulip mania.

ali-ali-al-qomfri's picture

that puts us in the Cryptozoic era,

with Cesium-137 as the "KT" boundry marker.

tmosley's picture

Horses were proven too, then a better tech came along and changed everything.

Luckily for gold owners, other new techs are coming along soon that will make the notion of "personal wealth" moot.All just fun and games until then, really.

European American's picture

Lord Rothchild net worth 5 billion? You mean 5 trillion, right?

stacking12321's picture

depends on what your definition of "is", is.

maybe his worth is is $5B but he controls trusts, corporations, foundations, and other assets without technically owning them.

. . . _ _ _ . . .'s picture

lol +1

But you're still off by factors of ten.

QEII's land holdings alone are worth $33T.

TAALR Swift's picture

According to Murphy's Laws, PM will appreciate massively in price, when you have sold off most or all of your PM.

Just kidding. 

Troy Ounce's picture

 

That's another law called: The Law of Conservation of Misery.

 

peekster's picture

Gold in a your own vault VS bitcoin/bank account (data on a hard disc).........mmmmmmmm

GubbermintWorker's picture

Gold in a your own vault(s) VS bitcoin/bank account (data on a hard disc).........mmmmmmmm

 

There, fixed it for you. You should never keep all your golden goose eggs in one basket.

alphasammae's picture

Mr. Durden stop pumping gold! Gold and Silver are not going anywhere as it is manipulated through digital paper trading and now Bitcoin is the new bubble digital currency to compensate for the extra helicopter paper not able to land without further inflating other financial instruments.

VinceFostersGhost's picture

 

 

That Common Core education will take you far bitch.......well........as far as the front door anyway.

saldulilem's picture

Are they buying real metal and taking delivery to own vault, or GLD, or futures contracts? Cause if these guys are plopping hundreds of millions and taking delivery, methinks this whole thing is going down already.

Latitude25's picture

Andrew Maguire says big delivery in early July.  Maybe these guys.  Maguire nailed manipulation to the day and minute for the CFTC and was right although they ignored him.  He's worth listening to.

Gordon_Gekko's picture

I, for one, am grateful for the opportunity provided by the Cartel to increase my PM holdings at extremely discounted prices for a lot longer than I thought possible. Longer PM suppression means proportinaly greater upside when the the thing finally blows.

So, once again, THANK YOU CENTRAL BANKING CARTEL ASSHOLES.

Batman11's picture
"Why The World's Billionaire Investors Buy Precious Metals"

 

They know the people who run things and know they are idiots.

Debugas's picture

one significant question - do they buy physical or paper gold ?

Too-Big-to-Bail's picture

No silly, they only sell the paper gold, which there is at least 50x in volume, to suppress the real gold price

chubbar's picture

They buy physical, at least one billionaire that I personally know of does. This was back in 99', I saw the vault. He was listed on forbes top 10 list that year. These guys are rich enough to hire the very best money managers and it was his money manager that moved him into a decent sized gold position at what was clearly the multi generational low in the gold price.

 

bjax's picture

Yea .. seeing more and more of these as people turn to cryptos as something that is decentralised, not manipulated and actually going up, rather that stagnating. I wonder why?

bshirley1968's picture

Cryptos,  not manipulated?  Waaaahahahahahaha!  That's some funny stuff right there.

Tiny market, thinly traded, less than 1% of the population knows about it, and it goes up and down in 20% moves on a regular basis.  Such security.  What confidence and consistency.  Sure to be what everyone will flock to.........so they can make MORE DOLLARS. 

You guys just can't get it, can you?  You just can't get that as long as something is viewed as an investment with the hopes of making more dollars,  then the dollar is in control and EVERYTHING it touches is then manipulated.

That is why this article is bs, and why I don't own gold so I can get more of their shitty paper.  Gold stores my value, and if I need some of their shitty paper, I am confident there will be plenty lying around. 

Jubal Early's picture

Jacob Rothschild's net worth:  $5B.  Yeah right.  maybe $5B and 20% stake in Rothschild ownership of 51% of the planet.

ludwigvmises's picture

Presented by "Sprott". Gold peddlers, trying to scam people to buy their ETFs and gold products. Buy physical, don't listen to peddlers of investment products!

peterk's picture

too many bull  bugs in gold

gold only will resume  an advance after china crashes. you cant have  china long gold and down in equities

and expect a  gold bull run.

china represents weak hands in gold. whe some pressure  turn up on chiin they will liquidate  and gold will crash

. . . _ _ _ . . .'s picture

China will liquidate US holdings and the dollar will crash, then gold will be allowed to climb to its natural place, and China will have all it needs to back the Yuan, the new reserve currency.

Der Libertäre's picture

JPM said: "Gold is money, the rest is credit".

I have a silver ounce for every day of my retirement.

I have a gold ounce for every 6 month of my retirement.

I have a platin ounce for every year of my retirement.

I have a house with a vege and fruit garden, not too much, doable.

And all the rest is of no interest to me anymore.

My country (Germany) is now a caliphate. If this happens to your country, the meaning of "getting out of the system" grows to a totally different dimensiion.

I am out of everythiing. I reduced. I went basic.

I am simply to poor to risk anything in this rigged ex-market. I will not short this crap, nor buy stocks after a crash. I am done. Out forever.

I do not envy the Bitcoiners, nor anyone who is "richer" than me. I do not know anymore what rich means.

My country is gone. My home is lost. I was so sad for so long.

Today I live in a cristian comunity (in this moment I hear the church bells), it is peaceful. I hear birds and bees and a dog.

I am out. After years of making myself mad with thoughts "what to do?" - I am calm and at peace. Finally!

Hopefully I do not sound like Chris Martenson. ;-)

"If a country goes broke - of course not the country goes broke, but the citizens!" Carl Fürstenberg.

This is the sentence, which made me leave. I am not smart enough to survive in rigged lawless markets. I am not smart enough to survive in rigged lawless countries.

I am out.

Sorry for getting off topic.

. . . _ _ _ . . .'s picture

Wow, you still have bees?!

You are richer than you think, sir.

Jack McGriff's picture

That  chart is rayciss.  There are no negroes and it's all white devils!  WE WUZ KANGZ!

GodHelpAmerica's picture

Precious metals show their value best when a crisis peaks. Hint: we are not there. Yet....