Tuesday, January 17, 2006

Warren Buffett on gold

"$50 billion worth of gold mined each year. The utility of gold does not command that much gold. In 1900, gold was trading at $20/ounce. It was revalued in '33 at $35/ounce. In '70 it traded freely at $20. Now its at $500 today. It offers no income, plus you have storage and insurance expenses. The S&P or Dow has done a lot better, plus it pays you dividends. Gold is a lousy long-term investment. It has to be. There simply is not that much intrinsic value. Oil and certain other commodities have much more utility. I like assets that are producing money all the time; gold just sits there."

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