THIS WEEKEND'S annual general meeting of Berkshire Hathaway shareholders in Omaha saw Warren Buffett, his friend Bill Gates, and the company's vice-chairman Charlie Munger all urge investors not to Buy Gold.
"Gold is a great thing to sew into your garments if you're a Jewish family in Vienna in 1939," said Munger, Warren Buffett's long-serving No.2 at the $204 billion insurance and investment company, "but I think civilized people don't Buy Gold. They invest in productive businesses."
Reputedly the world's second-richest man just behind his friend Bill Gates, Warren Buffett has long warned investors not to Buy Gold, telling a CNBC interview this weekend that "a productive asset of any kind, a decent productive asset, is going to kill a non-productive asset over time.
"I will guarantee you that farmland, over a hundred years, is going to beat gold, and so are equities," said Buffett – now 81, and recently diagnosed with early-stage cancer – adding the caveat that "in any given one-year period, five-year period, any asset can outperform another asset."
Choosing to Buy Gold has outperformed buying Berkshire Hathaway stock – including dividends – in 8 of the last 10 years, with the Dollar Gold Price rising by an annual average of 18.4% against BRK's average 5.2%.
Bill Gates meantime recalled Buying Silver around the same time that Warren Buffett famously did in the mid-1990s. "He got out fairly quickly," Gates told CNBC, "I stayed in and did very well on silver. But gold is a tough one because it's so psychological.
"It's purely what other people think, [that] other people in the future will think it's worth more than it's worth today. Which if you think the world is scary and people are going to panic, I'm not saying that theory doesn't exist, but there is no floor."
Anyone choosing to Buy Gold today, said Gates, founder and CEO of Microsoft, is overlooking advances in mining technology which he believes will "change the supply equation" over a 10 to 20-year time frame.
Regularly drawing 30,000 or more shareholders to Omaha, Nebraska, hometown of chairman Warren Buffett – who has famously pledged 85% of his personal fortune to Bill Gates' charitable foundation – Berkshire Hathaway's annual general meeting was this year also attended by U2 vocalist Bono, seen in the front row during the opening remarks.
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