Tom Mathies: “If an Andy Day is coming up you can just link to this adaptation from Warren Buffett’s latest shareholder letter. You won’t be surprised by his comments on gold.”

☞ I’m not. Nor am I surprised by his quoting Shelby Cullom Davis: “Bonds promoted as offering risk-free returns are now priced to deliver return-free risk.”

But while I own no bonds,* I’m not out of gold. It’s up a lot since suggested here in 2009 and 2010 – and even up nicely since this comment last May. I hang on to much of it because – just as Warren likes to keep $20 billion cash on hand to feel comfortable – I don’t mind tying up a little of my vast fortune (which rivals his down to all but the last several zeroes) in gold, lest paper currencies continue to lose their value.

* I’m even out of the TIPS that have appreciated so nicely – because they have appreciated so nicely. When first suggested, they yielded a ridiculously good 4.25% above inflation. Today, depending on their maturity, they yield little or nothing above inflation (and, because they sell at a premium, may actually carry a small negative yield). Going forward, they may not hedge inflation as well as stocks or real estate (click that Warren Buffett link).


Watch and listen, second-by-second. Wow. (Thanks, Alan S.)


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