So much for being a perma-bear hater when it comes to gold.
Warren Buffett, everyone’s favorite left-leaning billionaire, has suddenly turned bullish on gold by scooping up a hefty sum of shares in Barrick Gold in the second quarter.
According to a Securities and Exchange Commission (SEC) filing, Berkshire Hathaway bought 20.9 million shares, with a current market value of $565 million. When the news broke, the company’s shares advanced more than eight percent in after-hours trading to just below $30 a share.
Buffett joins other billionaires who have placed their bets on gold. John Paulsen added to his holdings in Barrick, and Ray Dalio has added to his positions in SPDR Gold Trust and iShares Gold Trust.
This transaction was interesting for two reasons.
The first is because of past statements like this one:
“(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
The second is because Berkshire has slashed its positions in JPMorgan Chase and Wells Fargo by 62 percent and 26 percent, respectively, and sold its holdings in Goldman Sachs.
So, is Buffett betting against the post-coronavirus economy?
Leave a Comment