Leo asked in Business & FinanceInvesting · 6 years ago

Why Warren Buffett hates gold?

Why Warren Buffett hates gold? Why he won't invest in gold?

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  • Anonymous
    6 years ago
    Favorite Answer

    Because warren buffett thinks that gold is not producing income compared to stocks. He said that if you get all the existing gold in the world, you can build a gold cube equal to half of a basketball court, nothing more than this! However, you can exchange for 6 Exxon Mobil, which give u dividend plus some billion for u to spend....

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  • 6 years ago

    Many people purchase gold financial instruments, a peice of paper that claims gold ownership. At the end of the day there is not enough mined gold in the world to deliver to everyone who has a claim on gold. The demand clearly outweighs the supply. Only the issuers win in this scenario as it is impossible to fulfill such an idealistic demand. In addition, no one is going to walk around with a bar of gold for exchange. It is only a hedging instrument. One can go bearish and purchase a put against an index and limit their downside risk.

    In an economic collaspe it is more reasonable to purchase cases of liquor, soap, guns, bullets, clothes, garbage bags etc...tradeable consumerable items. gold is too hard to trade in a collaspe unless you hang around the rich. Buffet doesn't purchase common stock like normal folk he purchases perferred shares or warrants in many cases. Again he limits his downside risk, in case of bankruptcy those positions get paid first.

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  • 6 years ago

    Because gold is speculative and he cannot control its price - remember that Berkshire Hathaway invests only in undervalued companies that they can actively run and improve - thus BH has control over the success or failure of an investment.

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  • wg0z
    Lv 7
    6 years ago

    he hates it because it's a poor investment. period. compare the performance of almost any current DOW stock (e.g. GE ) to gold and gold loses.

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