As a general rule, the most successful man in life is the man who has the best information
by Richard (Rick) Mills
Ahead of the Herd
Warren Buffett did what he said he’d never do, and that is buy gold – not the physical metal, nor an ETF, but a gold mining stock. Buffett and/or his holding company’s managers chose ABX, as it is known in Toronto, or GOLD, on the New York exchange. The surprising trade is highly symbolic given Buffett’s previous fervently anti-gold public statements.
Last Friday the Oracle of Omaha’s Berkshire Hathaway (NYSE:BRKB) picked up about 20 million shares of Barrick Gold (TSX:ABX), presumably on the strength of the second largest gold company’s growth potential, and the fact it pays a $0.08/share dividend.
“If you own one ounce of gold for an eternity, you will still own one ounce at its end,” the Oracle famously wrote in a 2011 annual shareholder letter, joking about a big pile of gold that “you can fondle the cube, but it will not respond.”
But Buffett also pointed out in the same letter, “what motivates most gold purchasers is their belief that the ranks of the fearful will grow.”