Despising Bitcoin and gold, where is Buffett wrong?

Editor's note:

As the heavyweight KOL of the financial world, Buffett is undoubtedly the biggest "black powder" of Bitcoin. Since the first announcement in 2013, negative attitudes have never changed. At the shareholders meeting in May this year, Buffett said: "This is a gambling tool, there are many frauds. Bitcoin itself does not produce value, just like a shell, it is not an investment for me. Last year, he compared Bitcoin to "rat medicine", saying that it would not have a good end, an unproductive asset, and its value depends on whether there are more people taking over. Coincidentally, he doesn't like gold either. From Buffett’s criticism of gold, we can see the same words as hate bitcoin: no value. Recently, Buffett’s criticism of gold has led to some analysts’ rebuttals. Bitcoin has the same characteristics as gold. Gold used to be the world's currency, and it failed at this point, but it is still a globally recognized hedge asset. Bitcoin also hopes to become a world currency, but it has not been successful so far, but it has gone further and further on the road of investment products. Of course, most people today still regard Bitcoin as a speculative product. However, we can try to use these to refute Buffy's point of view and understand the meaning of Bitcoin as a non-sovereign value store. Although this status has not yet established a consensus on a worldwide scale, in some HODLer worlds, bitcoin may have become such a presence; interestingly, studies have shown that bitcoin's recent trend is related to gold. . Berkshire Hathaway CEO Warren Buffet has long been known for his vicious view of gold, but his recent wave of negative emotions has led to criticism from many analysts that it ignores The true investment value of gold.

The "Oracle of Omaha" caused a wave of turmoil in the gold market last week, and he compared gold to the S&P 500 index (s & p 500). At the annual meeting of the Berkshire Hathaway Association in the United States on Saturday, he compared the $110,000 gold investment in 1942 with the $10,000 S&P 500 index investment, although the S&P 500 index did not presence.

He said that if he invested $10,000 in the S&P index 76 years ago, it is now worth $51 million; but if he buys $10,000 in gold, he now returns only $400,000.

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In his speech, Buffett said: "In other words, every time you earn a dollar in a US business, you will lose a penny because you buy this value store (here, "gold"). Every time you are scared by the headlines, people will tell you to invest in this value store. ”

“When a business invests in more plants, invents new guys, you look at your own safe, that 300 ounces of gold is still 300 ounces of gold. You can look at it, caress it, do anything with it, but it just doesn’t produce Anything," he added.

However, some commodity analysts believe that although Buffett’s remarks are correct, they ignore the question of why investors should invest in gold.

Colin Cieszynski, chief market strategist at SIA Wealth Management, described Buffett’s view of gold as “a bit too simplistic”.

He added that Buffett is not wrong, but the gold market is much more subtle. He said that comparing gold to the stock market is like comparing apples to oranges.

He believes that "gold is not used to make money in the portfolio, gold is used to hedge inflation, hedge against currency devaluation and hedging crisis. It can not create wealth, but it is a storeroom of wealth."

Todd Horwitz, chief market strategist at Bubbatrading.com, said investors should not ignore the value of gold as insurance. He added that although he supports the holding of physical gold, he said that investors should not invest in gold, but should make the portfolio more diversified.

"There is no better investment in the world than the stock market, and there is no better place to cover the position." "You will never get real income from gold, but when you have it, you will sleep." Well, gold will always be worthwhile."

Horwitz added that he advocates that investors hold up to 10% of the investment in physical metals as a reserve of wealth.

Rjofutures Senior Market Strategist Phillip Streible equates gold with home insurance. He added that insurance does not increase the value of the home, but insurance protects the house when it is built on the edge of the cliff.

Streible said that gold is a strategic asset held in a crisis and that it outperforms stocks at certain times.

This article is from Kitco News , and the original title is: What Warren Buffett Gets Wrong On Gold by Neils Christensen. Translator: Odaily Planet Daily Aloe, Editor: Lu Xiaoming.

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