Fake Headline: Warren Buffett Buys Gold
Kitco says Warren Buffett buys gold.
If Kitco would have changed the headline slightly to “GOLD” it would have been accurate but misleading.
GOLD is the symbol for Barrick, a gold miner. It pays a dividend.
Kitco enhanced its poor headline with a number of Tweets that mostly made the same purposeful mistake.
Not exactly.
Peter Schiff gets the headline correct but Buffett is not tuning into Schiff.
Huge Cave In?
Sea of Change?
Not really. Buffet knows financials are struggling due to Covid. And Barrick pays a dividend.
Barrick Dividends
The above from the Dividend Investor.
Buffett Statements
- 1998 Harvard Speech: “(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.”
- 2009 CNBC Interview: “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.”
Terrible Timing
Buffett’s announcement nailed the top.
A year ago, Buffett could have bought Barrick for $11.50. In April, Barrick was on sale for $12.61.
I cannot find what price Buffett paid. We do know Berkshire holds 20.9 million shares valued at $563.5 million at the end of the quarter.
Huge Contrarian Indicator Again?
Buffett was a huge contrarian indicator in 1998 and 2009. Perhaps Buffett provides another one now.
Regardless, there is no indication Buffett has changed his mind or that buying Barrick represents a sea of change. Barrick is a mere 0.3% of Berkshire’s holding.
OK Buffett Dumped Goldman Sachs and some of his Wells Fargo holding, and added to Kroger.
But this is neither a huge cave-in nor a fundamental sea of change regarding gold. Potentially it is a short-term sell signal that corresponds to the recent pullback.
Addendum
I am not calling a top in gold and I am very heavy in miners. The point of this article was to take exception to the misreporting that Buffett bought gold.
Mish
Berkshire opening a small position in Barrick Gold got a lot of coverage but in less than 3 months he reduced the stake by a third but no mention anywhere. Buffet sold shares in next quarter. https://grufity.com/funds/1067983
I guess the bottom line is that Warren has now elected to signal other funds and money managers a green light to buy gold stocks. Could be a watershed moment, we will see how many other fund managers join the bull market in gold and silver.
Mish, I saw you (and this article) quoted in this MarketWatch story:
Buffett bought American Barrick gold ”company’ shares. The stock symbol for that stock is ‘GOLD’!
Why all hallabuloo!?
If you don’t think Buffet already has Physical Gold Holdings you are a fool . . . The apple doesn’t falls far from the tree . . . His father was a Gold advocate and Buffet is to good of an investor not to be diversified particularly in today’s world. Of Course he is never going to advocate buying Gold because that would send the price through the roof . . . .
I wished Buffet bought 100 M ounces of gold to underline how warped the system has become under the longtime monetary bunglership.
Buying GOLD, and selling the banks doesn’t have the same effect.
Buffet knows if Trump is relected he will default on the dept and a dept default by the US means whatever is left of the dollar will be worth less than the Zimbabwe dollar.
Probably going to happen either way. The economy is wrecked, and only more funny money can prop it up a while longer.
“Buffett was a huge contrarian indicator in 1998 and 2009. Perhaps Buffett provides another one now. “
He’s an old man. Been around a long time. The way random works, is that the longer you punt, the more times you will be right, and the more times you will be wrong. That’s just an inevitable feature of wasting your life trying to predict dice throws, or any other random event.
Have enough people do it, and there will be outliers who die while still “up.” Chances are Buffet will be one of them. No different; aside from all the funds The Fed stole from others to prop up Buffet in order to fool dumb people into believing financialization in any form is anything but a pure theft racket; from how most people who won the lottery will likely pass away before the law of large numbers bring their lifetime earnings from lottery buying into line with expectation.
No idea why you’re saying he bought Gold.
Haven’t seen it reported ANYWHERE that he did.
Is it just Mish trying to make a headline in the style of MSM shock horror stories? Methinks so.
I saw the news about it last week. And while it did say he bought gold mining stock the thrust of the news was the same, he is moving inot gold and one of the way goldbugs have long advocated owning gold is to buy miners. You can hold physical gold, I would not, or you can trade on gold exchange funds but many in gold say not to because WTSHTF they may be unable to make delivery. And the third way is to own stock in miners, with the added advantage of dividends.
I do wish I had held onto a stock I picked way back in the late 90’s, Silver Wheaton (now Wheaton Precious Metals), I would be up about 1,200%.
3 points not widely reported
In conclusion, a lot of hot air about a 0.1% bet that most likely was not Buffett’s.
He bought gold that still in the ground.
No, that is all I could find. I do find it interesting that he has come full circle. If what I read is correct (fake news just about everywhere), his father was quite the gold advocate. I suppose the polarity of society has taken hold of him as well. We live in interesting times indeed….BTW love your blog, been reading it since inception.
Thanks GoldGuy – I believe that is the value at the end of the quarter – June 30. Do you have the purchase dates?
Hi Mish, hope this helps finding the price,