Did Warren Buffett Really Buy Gold?

Many people on Fintwit (Financial Twitter) and even in the Financial Media are reporting that Warren Buffett bought gold. Let’s evaluate the facts.

Warren Buffett traded Goldman Sachs for gold in Berkshire Hathaway’s newly revealed portfolio, says Fortune

The fact is that Berkshire Hathaway revealed a stake in a gold mining company, Barrick Gold, a Canada-based mining company. So, he didnt buy gold.

And Berkshire Hathaway is no longer just Warren Buffett. There are now three portfolio managers. Todd Combs was hired in 2010 after running a small hedge fund (more here). As well as Ted Wechsler in 2016, another hedge fund alum. (more here).

In his investor letter for 2013, Buffett praised Weschler and Combs for outperforming his stock picks for the year “by a lot”; hiring them “was one of my best moves,” he said in his 2015 letter.

Putting his money where his mouth is, Buffett has given the pair more freedom: Each now controls $9 billion of the Berkshire portfolio.

So, its possible one of them found Barrick attractive.

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More moves by Berkshire:

Besides dumping Goldman outright, Berkshire sold shares in other banks, cutting his position in JPMorgan Chase by 61%, and trimming his holdings in Wells Fargo and PNC.

Buffett has been quite Bearish on Gold over the years:

Buffett Statements on Gold:

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.”

To understand Buffett’s value style of investing, here is an article on his mentor Benjamin Graham – The Dean of Value Investing

Hopefully, Buffett will clarify the acquisition of Newmont by Berkshire so that investors have more information.

We will see.

Did Warren Buffett Really Buy Gold?