Tuesday, February 28, 2012

Buffett doesn't like bonds or gold

It shouldn't surprise anyone that Buffett doesn't like bonds or gold. Charles Sizemore at Marketwatch quotes three sections of the Berkshire Hathaway 2012 letter to shareholders (link).

>>
[bonds are] among the most dangerous of assets...
Current rates, however, do not come close to offsetting the purchasing-power risk that investors assume. Right now bonds should come with a warning label.

... what motivates most gold purchasers is their belief that the ranks of the fearful will grow ...
... A gold bug has to sell it to someone even more scared and jaded than himself in order to see a profit.
>>

Buffett certainly would not be a fan of the permanent portfolio (25% each in cash equivalents, long bonds, stocks, gold, PERM is an ETF with that allocation). Buffett touches on farm land, and residential real estate, but comes back to his bread and butter, equity in productive companies with a moat that gives them pricing power.

No comments: