A few months ago I was getting asked a lot about gold. I guess it’s a good sign I was getting “asked” and not “told.” I was “told” a lot about real estate back in 2005.


I can understand gold’s use as an alternative to the fiat currencies of the world but, personally, I can’t find any investment merits in the metal at all. I just don’t know how to value it and I readily admit that may be a shortcoming of mine.


Ultimately, I think Warren Buffett does the best job of quantifying the argument:

You could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what that’s worth at current gold prices, you could buy all — not some — all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?

This is not to say gold is not a good vehicle for speculative activities. It just doesn’t make any sense as an investment, a distinction that is imperative to acknowledge.

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