Do your knuckles drag the ground like mine? Happy to say I'm a Neanderthal investor!
Today it's time to go double-barrel. A review of two articles from last Thursday that dovetail nicely. You can either get steamed at the insinuation you are a Neanderthal for investing in physical gold, or you can laugh at the idiotic prattling from Warren Buffett and Charlie Munger of Berkshire Hathaway. I choose to both laugh and count the appreciation in my asset.
Both of these men are taking every opportunity they can to "talk down gold". As Dan Denning pointed out in his 5/24 article Uncivilized Investing, Charlie Munger recently said on CNBC: "I think gold is a great thing to sew into your garments if you're a Jewish family in Vienna in 1939, but I think civilized people don't buy gold. They invest in productive businesses."
Eric Fry, another excellent investment analyst with the Daily Reckoning folks pulls no punches as he tag-teamed Dan's article with this entitled Investing in Gold as World Economies Falter: "During the last decade and a half, the investment return of Berkshire Hathaway, perhaps the most civilized of American stocks, has trailed far behind that of gold. Civilized folks like Charlie Munger and Warren Buffett consider that 15-year trend a fluke. Maybe so. Or maybe this trend is a warning that America is becoming a bit less civilized — a bit less friendly to productive businesses.
Notwithstanding this trend, civilized folks know better. They shun gold in order to invest in the shares of overhyped social media companies, highly leveraged banks, bonds of bankrupt governments and complex derivatives that are impossible to value precisely... until they go to zero... at which point their precise value is known.
That, Dear Reader, is civilized!
But there is one additional echelon: the über-civilized investor. Über-civilized investors shun gold to invest in über-complex derivatives. These are the folks like Warren Buffett who do not merely shun gold, but also belittle it very publicly while loading up on highly leveraged finance companies that are loaded up on complex financial derivatives.
Often, these banks are run by über-über-civilized investors — the kinds of guys who do not merely load up on complex derivatives, they load up on complex derivatives linked to the bonds of bankrupt governments. Then they utilize a "risk control" methodology that has a perfect record of failing to control risk.
You just can't get any more civilized than that."
Dan Denning finished his missive very nicely with this: "This lengthy underperformance by Berkshire may explain Buffett's and Munger's very vocal and public hostility toward gold. Or maybe that's just a function of both men living most of their adult lives in an era where the monetary system was not disintegrating. They are unable to imagine it."
And this summation: "If you accept that we live in civilized monetary times where productive labor is actually rewarded, your brain has been tranquilized by the Big Lie of our times. Munger wants you right where you are. The less you think about how uncivilized the current monetary system is, the less likely you are to question it or disrupt it (which would be inconvenient for Charlie).
But if you live an era that subverts accurate valuation of productive businesses — an era that subverts the productivity of the economy itself by encouraging debt and consumption, owning gold seems prudent, not wacky.
Uncivilized times call for uncivilized investments."
Here's to Dan Denning & Eric Fry! Brilliant writing. How about you, Dear Investor? Care to join me here at Lear Capital with your investing? Care to let your knuckles drag the ground like mine? Call us at (800)576-9355 now.
Both of these men are taking every opportunity they can to "talk down gold". As Dan Denning pointed out in his 5/24 article Uncivilized Investing, Charlie Munger recently said on CNBC: "I think gold is a great thing to sew into your garments if you're a Jewish family in Vienna in 1939, but I think civilized people don't buy gold. They invest in productive businesses."
Eric Fry, another excellent investment analyst with the Daily Reckoning folks pulls no punches as he tag-teamed Dan's article with this entitled Investing in Gold as World Economies Falter: "During the last decade and a half, the investment return of Berkshire Hathaway, perhaps the most civilized of American stocks, has trailed far behind that of gold. Civilized folks like Charlie Munger and Warren Buffett consider that 15-year trend a fluke. Maybe so. Or maybe this trend is a warning that America is becoming a bit less civilized — a bit less friendly to productive businesses.
Notwithstanding this trend, civilized folks know better. They shun gold in order to invest in the shares of overhyped social media companies, highly leveraged banks, bonds of bankrupt governments and complex derivatives that are impossible to value precisely... until they go to zero... at which point their precise value is known.
That, Dear Reader, is civilized!
But there is one additional echelon: the über-civilized investor. Über-civilized investors shun gold to invest in über-complex derivatives. These are the folks like Warren Buffett who do not merely shun gold, but also belittle it very publicly while loading up on highly leveraged finance companies that are loaded up on complex financial derivatives.
Often, these banks are run by über-über-civilized investors — the kinds of guys who do not merely load up on complex derivatives, they load up on complex derivatives linked to the bonds of bankrupt governments. Then they utilize a "risk control" methodology that has a perfect record of failing to control risk.
You just can't get any more civilized than that."
Dan Denning finished his missive very nicely with this: "This lengthy underperformance by Berkshire may explain Buffett's and Munger's very vocal and public hostility toward gold. Or maybe that's just a function of both men living most of their adult lives in an era where the monetary system was not disintegrating. They are unable to imagine it."
And this summation: "If you accept that we live in civilized monetary times where productive labor is actually rewarded, your brain has been tranquilized by the Big Lie of our times. Munger wants you right where you are. The less you think about how uncivilized the current monetary system is, the less likely you are to question it or disrupt it (which would be inconvenient for Charlie).
But if you live an era that subverts accurate valuation of productive businesses — an era that subverts the productivity of the economy itself by encouraging debt and consumption, owning gold seems prudent, not wacky.
Uncivilized times call for uncivilized investments."
Here's to Dan Denning & Eric Fry! Brilliant writing. How about you, Dear Investor? Care to join me here at Lear Capital with your investing? Care to let your knuckles drag the ground like mine? Call us at (800)576-9355 now.