February 13th, 2012 by Dissolving Dollars

This is an article about Warren Buffett’s persistently dismissive take on gold. Buffett says buy stocks. And that is because he knows that the plan is for Central Banks to inflate and inflate. But he also says stocks are better than gold. That hasn’t been the case for the last decade, except for a few stocks like Apple. There is a time for stocks and a time for gold. The only problem is that Buffett is stuck in the stock business regardless of whether it is the time for stocks or gold. So, it’s hard to trust his take when the fact is he’s tied to one position: stocks.

WTF, Warren Buffett?
by Simon Black

For value investors of a certain age (e.g. mine), discovering that Warren Buffett could be wrong is like suddenly not believing in Father Christmas. This twinkly-eyed, raspy-voiced, avuncular old gentleman almost embodies Clint Eastwood crossed with a Care Bear. And nobody can hold a candle to his long-term investment record.

And yet, the rot set in (at least as far as this writer is concerned) when Buffett went from investing in private non-financial businesses to siding with the establishment, using his institutional heft to win sweetheart deals in dubious banking institutions way beyond the reach of regular Joes.

In other words, somewhere along the line he went from representing the 99% to representing the 1%. And at the first sign of trouble, he simply wraps himself up in the American flag.

Buffett’s latest advertorial (for himself and for Wall Street), “Why stocks beat gold and bonds,” adapted from an upcoming version of one of his legendary shareholder letters and published in Fortune, may be the most irritating thing he’s ever written.

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