“(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.”
“You could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what it’s worth at current gold prices, you could buy — not some — all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils (XOM), plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?”
“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."
--- Warren Buffett
Sometime back, this was my opinion about gold.
It sits there looking pretty. It does nothing. It serves no real purpose.
Except trust.
The trust that someone else would give me fiat currency, or services in exchange for ownership of gold. (or silver)
Just like any other currency.
TRUST...
That's a heavy word.
Cos all fiat currencies are built on it.
Yet somehow, my view on gold (and silver) are changing.
I've come to view the world is irrational and it will remain that way.
I just have to live around it.
So for things like environmental issues. We can talk about it, but things won't be changing anytime soon.
Unless there's some crisis, but since such issues are slow, we probably won't realize it, bother about it, or do anything about it, until the trouble is really at our doorsteps.
Same as for people who live a YOLO life, or aren't prudent in their spending.
The world is just filled with people who aren't bothered and won't plan for their financial future. That's just the way things are.
And gold, and silver and other precious metals will retain their value over time.
It's just the way it is. And in it's own way, it's better than diamonds. Cos it's highly liquid.
Diamonds aren't worth much unless they are big.
Whereas gold, and silver... they are worth whatever it weighs.
I think, in the long run, gold and silver will retain it's value.
I'm not talking about jewelry. If you're considering investing in gold or silver, you could look at gold ETF, or silver ETF. OR gold/silver coins/bullion/bars.
It depends on how you like to invest and why you want to hold the precious metals.
If you're just investing in it as a store of value, then I suppose an ETF is a useful tool to get into gold/silver investments.
Some people buy gold/silver coins as a doomday scenario. It probably has a higher transaction cost, cos there will be premiums for minting of the coins and maybe storage costs, or if you're keeping it in your house, there's always a chance of burglary or losing the items. But nonetheless, coins or bullion are another way to invest in precious metals and also for doomday scenarios, where you could take the coins/bullion and trade for services and products.
Imagine a time in a dystopic future. We've watched shows about that. And in such a scenario, gold/silver coins will probably do well. And much better than bitcoin too. Cos... well who's going to be running the computer servers to process bitcoin transactions when such a situation arises.
Well, a highly unlikely scenario but... well who knows right?
There are people who are planning for such situations. Doomsday preppers.
Or maybe you wanna be like John Wick and stash away some gold coins for special situations. Never know when you might need them at the Intercontinental.
Thing is, personally, I'm fairly confident that the value of gold and silver are here to stay.
Will it beat the market in the long run? Probably not.
Is it a fair inflation hedge? Probably yes in the long run.
Is it a crisis hedge? I think in times of unstable economic situations, gold and silver will likely outperform the market.
Is it useful for doomsday scenarios? Yea probably. But only in coin or bullion form.
Is it pretty to look at? Yea. A nicely minted gold/silver coin is a pretty collectible.
So... Similar to my post on CPF Special Account, I think gold or silver can have it's place in a diversified portfolio.
Or for special situations.
Or even a fun hobby.
Do you invest in gold or silver?
Would you?
And yes... recently, I've bought some gold in the form of ETF.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "blanjah" me 1/4 cup of my morning coffee pls.
You may also consider subscribing to receive the articles in your email, link in the column on the right.