Forbes: Look Which Precious Metal Is Beating Warren Buffett

Article by Frank Holmes in Forbes

Way back in January, I showed that the price of gold had beaten the S&P 500 Index over a number of different time periods, including the month, quarter, year… and even the century.

Last week it was brought to my attention recently—in a tweet by Charlie Bilello, director of research at Pension Partners—that the yellow metal has also outperformed arguably the greatest living investor, Warren Buffett.

For the 20-year period, gold has returned more than 485 percent, beating Warren’s Berkshire Hathaway, which was up 426 percent.

Granted, gold saw an unusually strong rally in the 2000s, while equities were knocked down hard during the dotcom bubble and financial crisis. But that’s precisely my point. Those who had the prudence to diversify their portfolios during this period—and not just in gold but also bonds, real estate and more—were in much better shape than some other investors.

No Stranger to Silver

Most investors are aware that Buffet is an infamous gold bear. But what some might not know is that he was once a silver bull for a time.

The Midwest, where Buffett is from, has an historical affinity to silver over gold. In 1997 and 1998, Buffet and Berkshire amassed a record silver stockpile of 129.7 million ounces, which actually caused a shortage of the metal and drove up lease rates. In Berkshire’s 1998 letter to shareholders, Buffet wrote that in the prior year the company’s silver position “produced a pre-tax gain of $97.4 million for us.”

When governments offer you a negative rate of return, that automatically makes gold much more appealing. What’s more, I think this easing cycle has just begun.

To read this fascenating article in Forbes in its entirety and view the relating charts, click here.