Another classic hit piece on Gold by the CNBC team. Although they grudgingly had to admit that the S&P500 has just reached the same price as it did in mid 1999 "the stock market and the s&p 500 and closing at 1369. you know the fertile time it closed above that was july 1st, 1999. gold has about quintupled in price. i can't speak for gates, but warren buffett tends not to worry about inflation or thinking like that. he is a long-term investor looking for growth and good management and all those things. none of which you get from investing in gold." but that is the point of gold, it doesn't need "good management" what ever that means, large companies rarely have it. Also I wouldn't worry too much about inflation if had Buffet's pay check, but I don't, so I need to worry about inflation and how to pay for my rising petrol, gas and particularly my electricity bills when the carbon based life form tax kicks in later this year.
In the article below I love the fact that Jeff Cox still refers to Gold investors as "Gold Bugs", but those who love their paper, like Buffett are "value investors".
Also Jeff's key point "Buffett and Gates dislike gold because it is too hard to value" Would that be because Gold doesn't pay a dividend? Well Buffet's company Berkshire Hathaway hasn't paid a dividend since 1967 yet some how the market in its infinite wisdom has managed to price it at an astounding $123,744 per share. Isn't the market amazing it can come up with a price for everything even, those items that are "hard to value".
------ / ------
By: Jeff Cox
From CNBC
Original source
It's not everyday you can find people to take the opposite side of a trade from Warren Buffett and Bill Gates, but then gold is not your average trade.Gold bugs are known as some of the most passionate investors, so not even high-level slams from the Oracle of Omaha and the founder of Microsoft [MSFT 30.50
-0.15 (-0.49%) 
] can cool their fire.
"Absolutely I would take the other side of that trade," says Michael Pento, founder of Pento Portfolio Strategies in Holmdel, N.J. "The stock market has gone nowhere in nominal terms in 12 years. It makes sense as a default under the current conditions of negative real interest rates to own something that keeps you afloat, that preserves your purchasing power."
Pento is the former senior economist at Euro Pacific Capital, the firm run by noted gold enthusiast Peter Schiff. Pento has nailed the trajectory of gold's price for the past three years running.
Key Points:
Buffett and Gates dislike gold because it is too hard to value.
Gold bugs say the investment is a critical safe haven.
Primarily because of the Federal Reserve's
weak-dollar policies, Pento expects gold to continue to hold its place as an inflation hedge, as well as a safe-haven asset to buffer against global debt contagion.
For 2012, he thinks gold should be able to hit $1,900 an ounce.
"I would ask Mr. Buffett if he could own a lone share of a representative of the S&P 500, or would he rather have the equivalent of an ounce of gold?" Pento says. "Which investment has done better over the last dozen years? The answer is clear: Gold."
Buffett and Gates primarily don't like gold because of its lack of intrinsic value. It's not the same as holding shares in a company that has a clear revenue stream and business model, which in turn make it comparatively easy to value. (Buffett's right-hand man at Berkshire Hathaway [BRK.B 82.22 -0.25 (-0.3%) ], Charlie Munger, has been less diplomatic, suggesting in an interview Thursday that no "civilized person" should own gold.)
Rather than being cowed by Buffett's legend as a buy-and-hold investor, some gold advocates instead consider him out of touch with present-day conditions.
"His track record since 2008 has not been very good," says Kathy Boyle, president of Chapin Hill Advisors in New York. "He might be the Oracle of Omaha for the long-term, but short-term since 2008 his trades have not been that great."
It's not everyday you can find people to take the opposite side of a trade from Warren Buffett and Bill Gates, but then gold is not your average trade.Gold bugs are known as some of the most passionate investors, so not even high-level slams from the Oracle of Omaha and the founder of Microsoft [MSFT 30.50
-0.15 (-0.49%) ] can cool their fire."Absolutely I would take the other side of that trade," says Michael Pento, founder of Pento Portfolio Strategies in Holmdel, N.J. "The stock market has gone nowhere in nominal terms in 12 years. It makes sense as a default under the current conditions of negative real interest rates to own something that keeps you afloat, that preserves your purchasing power."
Pento is the former senior economist at Euro Pacific Capital, the firm run by noted gold enthusiast Peter Schiff. Pento has nailed the trajectory of gold's price for the past three years running.
Key Points:
Buffett and Gates dislike gold because it is too hard to value.
Gold bugs say the investment is a critical safe haven.
Primarily because of the Federal Reserve's
weak-dollar policies, Pento expects gold to continue to hold its place as an inflation hedge, as well as a safe-haven asset to buffer against global debt contagion.For 2012, he thinks gold should be able to hit $1,900 an ounce.
"I would ask Mr. Buffett if he could own a lone share of a representative of the S&P 500, or would he rather have the equivalent of an ounce of gold?" Pento says. "Which investment has done better over the last dozen years? The answer is clear: Gold."
Buffett and Gates primarily don't like gold because of its lack of intrinsic value. It's not the same as holding shares in a company that has a clear revenue stream and business model, which in turn make it comparatively easy to value. (Buffett's right-hand man at Berkshire Hathaway [BRK.B 82.22
-0.25 (-0.3%) ], Charlie Munger, has been less diplomatic, suggesting in an interview Thursday that no "civilized person" should own gold.)Rather than being cowed by Buffett's legend as a buy-and-hold investor, some gold advocates instead consider him out of touch with present-day conditions.
"His track record since 2008 has not been very good," says Kathy Boyle, president of Chapin Hill Advisors in New York. "He might be the Oracle of Omaha for the long-term, but short-term since 2008 his trades have not been that great."
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