Warren Buffet hedges dollar drop?
Wow when did we think Warren Buffett would get into gold!? After last weeks announcement of his buying into of Barrick Gold (GOLD), we can now see the anti-inflation motive here or do we?
So what kicked all of this off? In a the recent 13F filing which money mangers of assets greater than $100 million, must file with the SEC “Securities and Exchange Commission” within 45 days after the end of a quarter in the United States. The big eye catcher is the buying of Barrick Gold, as anybody who knows Warren Buffett, knows he is not a fan of GOLD.
Warren Buffett is old hat and I mean really old hat, him and monger are 89 and 96 years of age. Take a moment to think about that. These are two very sharp people keep in mind. I think Charlie could be asleep and still give a full lecture on the current macro environment with stunning clarity, he is really that intelligent. Warren Buffett is as well and though he is far more demure publicly, he is just as bright imo and more of a risk taker to boot. Following their wisdom and level headed approach which has really helped me become a very well rounded trader, and for that I am thankful to them.
Warren Buffett is likely the greatest value investor of our age, him and Charlie Munger are the OG’s of investing imo. But man they are showing their age and completely are out of touch, missing the best investments that are so easy to see these past years. TSLA, BYND, AMD and the list goes on, such as one of the biggest and most easy to see for Warren Buffett was the “JP Morgan Silver Play” with him being a lover of banks you would think he would have good insight here. If he can’t catch an easy trade like this, well what is the point? Many of these misses by them make a trader/investor sick to his stomach.
Another big one is Tesla, Warren Buffett seems to have some beef with Tesla CEO Elon Musk and I can’t see why? Maybe the whole 420 smoking incident on the Joe Rogan show? Actually this goes back to even before that, where I think Buffett thinks of him as a competitor!? With a quote back in 2018 of where Warren Buffet quipped in the Tesla CEOs direction: “Elon may turn things upside down in some areas. I don’t think he’d want to take us on in candy,” Buffett said in 2018.
If it is because of his pot smoking, well imo should be legalized as it has way way more benefits medically than anything and compared to the harmful effects of alcohol or smoking and does not even compare. Pot actually makes people happy/relaxed and has no real negative health effects, but since few ever studied or read about it, just stick to the old 80s drug war mentality and continue to never know.
Elon Musk is an edgy strange character agreed, one that Warren Buffett is not going to understand. But Elon Musk is not only a really nice person, he is somebody making a real difference to advance our world and is making it a better place to live in, unlike Warren Buffett who is investing in the fossil fuels of yesteryear that actually hurt our world. Ethical Investing is now a thing btw, time to get a clue.
But none of that is here or there, the shame is Warren Buffetts EGO gets in the way of his investing now. Warren Buffett is demonstrating he is no longer in touch with the future and Berkshire Hathaway investors should be fearful imo. Simply put you have too many misses here, hence why the recent purchase of Barrick Gold (GOLD) is a real sign that others are likely taking over the reigns of one of the great investors of our time, if not the greatest.
Warren Buffett handing over the reigns
What people forget is the age of Warren Buffett and Charlie Munger, statistically these guys are far far past retirement age, yet they are Berkshire Hathaway and I think that is the fear, as I will explain further into the article here.
Barrick Gold buying by Berkshire Hathaway could be the first real indication of Warren Buffett handing over the reigns to Todd Combs & Ted Weschler, both of whom you can see in the above interview on Yahoo Finance, to which they speak about working with/for Warren Buffett.
I mean Warren Buffett has basically stated in the past that gold has no real utility/value beyond what people are willing to buy/sell it for, he is a pure company focused labor creating money guy. Gold and Bitcoin what is the point? That is simply how Warren Buffett thinks if you ever read or followed him throughout the years. To Warren Buffett a store of value would be a savings/bank account. So don’t expect him to jump on the Gold/Bitcoin bandwagon just yet. But maybe it is not him who is responsible for the Gold Bug in Berkshire Hathaway, maybe it is somebody else, hence starts the movie “Todd & Ted’s Excellent Adventures!”
These are very clear signs that Warren Buffett is stepping back from Berkshire Hathaway in an operating capacity imo, so now many Berkshire Hathaway investors have to reflect on this. I have more than a few family members that are longterm holders of Berkshire and they are concerned for the future. But most of them like Warren Buffett are up there in age so they are not that concerned 😉
The above chart shows us that Warren Buffett is not invincible, either Berkshire Hathaway is undervalued or the firm is showing its age. Maybe a bit of both imo, still don’t count out Warren Buffett, he is that great of a value investor, that even if blind and sleeping he would likely make a profit in something.
Still there is a fear of what will happen when Warren Buffett and Charlie Munger are no longer at the helm to guide Berkshire Hathaways tremendous investment company. Will Todd and Ted’s Excellent adventures continue? Recent filings the past year from Berkshire Hathaway indicate this is the real start of their careers and we will have to wait and see how they do. Most transitions can be chaotic so how Warren Buffett and his team handle this will be key.
Warren Buffetts 3 B’s of 2020
Let us take a look at his 3 new investments for 2020 and see if we can gain any insight into the future of Berkshire Hathaway, outside of their stock market focused trading picks, can we see any macro economic indicators here?
- Barrick Gold (NYSE:GOLD) – Another of my favorites = Metals, mainly silver but with them since it is on the NYSE it makes sense they would buy the #1 GOLD producer here, of course in the form of stock which Warren Buffett seems to prefer.
- Bank of America (NYSE:BAC) – My favorite bank since 2011 and now Warren Buffett & Berkshire Hathaway own almost 12% of the bank’s outstanding shares. Without a doubt the best run U.S. bank imo.
- Berkshire Hathaway (NYSE:BRK.A) – A vote of confidence as Berkshire Hathaway is buying well Berkshire Hathaway shares. So obviously he either thinks it is undervalued or this could also be to show confidence to other BRK shareholders of the new talent trading their portfolio.
The GOLD play was out in left field, not one any of us would have thought coming from Warren Buffett, but ok so likely his prodigies starting to sowing their oats. Gold is a great hedge with all the money printing of many governments due to Covid-19 pandemic hitting the world economies and at some point this will almost undoubtedly cause an inflationary bubble in the future.
Bank of America, well that makes more sense for Warren Buffet, he has always loved banking stocks in the past. If you are going to choose one of the banks that is the best one imo, extremely well run. It is not the pure stupid of a corrupt bank like Wells Fargo or the European joke of Deutsche Bank.
Last is Warren Buffett buying his own stock Berkshire Hathaway, now this is strategically significant, as it leaves many guessing as to why? Well #1 confidence is key, and by buying this it solves a few issues. It shows he believes in the future profits of his stock and is putting his money where his mouth is. The investors like my family members will want to see this as even if he passes on the reigns to others it shows there is a future of profits to come. Another reason he would do this is because it is undervalued, which means he is going to be kicking some investment @$$ in the coming months/years.
So Warren Buffett Buys Gold, is Bitcoin next!?
The trillion dollar question crypto currency traders want to know! It blows my mind how Warren Buffett is always late to the party but still shows up 😉 So he is now starting to get into the store of value asset class, will BTC and crypto assets be next for him to invest in? Unfortunately I think I know the answer to this, just like with Tesla “No..” 🙁
It is so sad, because what he did was not to read up, study and learn about what blockchain & the crypto currency revolution is, of which later like with AAPL and others he will be saying “Oops wish I invested in it when.” Just like he has done before. Very sad and I can only hope Todd & Ted can get a clue as Berkshire Hathaway investing in Bitcoin & Crypto could be the catalyst to launch it to the moon!
Warren Buffetts lunch with Justin Sun
I will give Justin Sun credit for having the balls to pay $4.6 million just to have lunch with Warren Buffett! Good job Sun! The only problem is, him and all of those who attended were not the right people to help him understand crypto and blockchain technology. He is as simply uneducated on crypto and blockchain technology as he was before.
I am sure Warren had people look into the backgrounds of those there and yeah uhmmm a big NO! Than again Warren Buffet seems too stuck in his ways to see the future, so I guess there was no real point other than a publicity stunt that hey is good for showcasing crypto if nothing else.
Final Thoughts…
Bitcoin and blockchain is going to the moon anyway, but it would have been nice if Warren Buffett and Charlie Munger jumped on the bandwagon, along the way maybe humbling themselves to the market, instead of holding onto old ideas that just ain’t so. Like Mark Twain said: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.“
I have learned many things from trading the markets for my over 30 something years and the biggest one is “The market is always right.” Warren Buffett in all his wisdom, of the many great things I have learned from him over the years, this one he misses in a big way.
Imo it is responsible for his many misses in investments because of his ego. Well you are WRONG WARREN! You are wrong on Bitcoin, you are wrong on Tesla, you were wrong on AAPL and the Internet! Yes it does anger me because I think so well of him, but nobody is perfect so be it. I guess as we get older we get stuck in our ways, something I will look to not repeat in the future. I guess we can not only learn from who we view as great in their successes but also as well from their failures…
