Buffett Is Wrong About Gold

• Report this Comment On December 03, 2011, at 12:37 PM, DoctorLewis4 wrote:

  Rickards talks a good game but let's see his investment gains over the last 40 years. We can all see Buffett's.

• Report this Comment On December 04, 2011, at 5:12 PM, MegaShort wrote:

  Rickards successfully strings words together into sentences, but on examination they are nonsense.

  It takes a pretty extreme twisting of Buffett's words and actions to turn him into a hard asset investor. Compared to other value investors, Buffett is well known for singing the praises of cash, as well as businesses with intangible moats. I guess if Rickards only has a hammer, everything looks like a nail.

• Report this Comment On December 04, 2011, at 5:24 PM, MegaShort wrote:

  Additionally I don't see any evidence that Rickards is an "investment banker" or has ever been one. He was a corporate lawyer (at banks and hedge funds) before becoming a consultant/author/investment advisor. Maybe I am wrong and he can clarify his experience as an investment banker.

• Report this Comment On December 04, 2011, at 5:57 PM, Frankydontfailme wrote:

  Fascinating that MegaShort is more interested in Mr. Rickards' character than his ideas.

  Mr. Rickards brings up the point that Mr. Buffet rarely invests in stocks, he invests in businesses. Buffet taking a large share of a company, which he can influence via stock is much different than the average investor buying a couple hundred shares of stock... often overlooked.

• Report this Comment On December 05, 2011, at 10:42 PM, Manlobbi wrote:

  Wow, his thinking is really twisted. He said that "The economics are really similar" for purchasing gold and purchasing a rail-road. This is just bizarre. The rail-road produces a profit - even without changing shape or form. Assuming no capital investments other than maintenance of everything the rail-road continually gives off cash. Gold, without changing form, does not give off any cash. Thus the latter is purely a speculative asset - it is an entirely different investment vehicle than a corporation. Wow, I can't believe the James Rickards just wrote that because railroads involve hard assets (trains, land) then it is like investing in another hard asset (gold). In fairness it was a short segment to quote, but rather cruel as I'm sure James is a lot more intelligent than that made him sound.

• Report this Comment On December 05, 2011, at 10:52 PM, Manlobbi wrote:

  James also said that he'd rather own a portfolio of 100% gold and then businesses of the same value (100%) purchased on leverage, versus just owning the businesses without any leverage. Wow. That is what I call sitting on a dynamite. Lets say $1t of gold supporting $1t of business with $1t of debt (so debt $1t, assets $2t). If gold and business both speculatively fall 50% as they have done many times in the past then your assets fall to the total debt value and you are bankrupt, forcing to sell everything at the most inopportune time in order to not move into negative equity. Amazingly unnecessary if you could have just settled for the $1t of business and own all future earnings from that without never needing to sell or worry about the speculative price of anything. James does not understand investing at all.

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