Comments on: Buffett on gold

By: Chart of the DJIA priced in gold: Buffett and gold redux « Greenbackd

Chart of the DJIA priced in gold: Buffett and gold redux « Greenbackd — Wed, 18 Nov 2009 04:02:54 +0000

[...] to get to the top. Standing still on the up escalator was an easier ride. This was the point of my Buffett on gold post last week. The change in the Dow:gold ratio for the period 1964 to 1979 makes it clear why [...]

By: tedk81

tedk81 — Thu, 12 Nov 2009 13:37:02 +0000

again, the point was buffett vs gold and sometimes gold was even as good as buffett for as long as 15 years. did you even read the post?

my point was, so what?

had you bought the dow, which closed 1979 at 785, right now you’d have $130,000.

By: tedk81

tedk81 — Thu, 12 Nov 2009 13:25:28 +0000

i’m guessing you didnt read the post or the example provided

By: Mark

Mark — Thu, 12 Nov 2009 06:49:53 +0000

@ tedk81 “You do realize that at the end of 1979 a share of berkshire cost around $320 (not sure exactly, just eyeballing the chart), and an an ounce of gold cost around $510, right?

So had you bought $10,000 worth of brk at that time you would have $3.2 million ”

-”So had you bought”….give me a break. Using outlier stocks as examples of what you should have bought is newbie stuff. It’s like (funny condescending voice) well, had you only bought Microsoft at IPO or Coca-Cola at IPO. lol If you think your going to find the next Berkshire or Keynes endowment fund around its inception you’ve got a lot to learn about this game.

By: Andy

Andy — Wed, 11 Nov 2009 18:35:13 +0000

Ha! And I suspect jafix doesnt understand the relation between the price of gold and the value of a fiat dollar.

By: greenbackd

greenbackd — Tue, 10 Nov 2009 23:47:55 +0000

I suspect that the printing of money does more for gold than television ads, but I’ve got no data to back that up.

By: Travis

Travis — Tue, 10 Nov 2009 19:21:16 +0000

I think Buffett likes to own things that produce, so that he doesn’t have to worry about the market at all. That way you’ve got an out should the market not do what you expect.

If I can buy something for 5 x sustainable earnings and the price only goes down, I don’t care, because its throwing off cash. If the price goes up to what I think its worth, I can sell, so its a win regardless of what the market says. With gold you can only win If Mr Market lets you win.

By: Jim

Jim — Tue, 10 Nov 2009 17:02:38 +0000

In 1930, gold was at about $20 while the DJIA was roughly 250 over the course of the year. Gold is now at $1100 and the DJIA at about 10,000, so both assets have done ~5% annually since then. There seems to be a reasonable argument for gold as an asset class, but I have to agree with tedk81 and Buffett–a sound value strategy is likely to outperform gold over most reasonable time periods, especially those that start with gold at a multi-year high.

By: htyen1

htyen1 — Tue, 10 Nov 2009 15:59:02 +0000

greenbackd i am surprise by your comment… very surprise.

“All I’m saying is that there are periods of time when gold beats the return of the best investor in the world”

i am sure you can say that for anything, does that make it a good idea. hmmm there is probably a period in time were baseball cards beats buffett, or maybe a beanie babie… you get the idea.

By: greenbarkd

greenbarkd — Tue, 10 Nov 2009 15:56:54 +0000

greenbackd i am surprise by your comment

“All I’m saying is that there are periods of time when gold beats the return of the best investor in the world”

i am sure you can say that for anything, does that make it a good idea. hmmm there is probably a period in time were baseball cards beats buffett, or maybe a beanie babie… you get the idea.