Warren Buffett’s investment firm Berkshire Hathaway Group has invested in gold production for the first time ever. The firm purchased 20.9 million shares of Barrick Gold Corp., one of the larger producers of gold.
The purchase reflects the growing investment move into store-of-value (SOV) assets like Gold, Silver, and Bitcoin. Inflation, economic struggles, and treasury yield curves have left the dollar weak.
Buffet’s Big Policy Reversal
The purchase reveals a substantial change in Buffett’s investment strategy. The so-called ‘Oracle of Omaha’ has been a strong advocate against purchasing the precious metal because of its lack of utility.
In 1998, Buffet famously rejected the thought of purchasing gold, saying it seemed strange.
The point is, of course, well taken. Gold does not produce anything, offers no interest, and provides no dividends. However, when inflationary pressures drive all these benchmarks negative, gold begins to look promising.
Could Buffet Pivot Towards Bitcoin?
Gold isn’t the only asset that Buffett has changed course on in recent months. Berkshire Hathaway shed $400 million in airline stocks after COVID-19 left the industry gutted, a move few would have seen as possible.
The interesting strategy shifts on gold and airlines reveal that changing markets can suddenly affect the way investors view assets. No one could have imagined the COVID-19 crisis, but with changes in circumstance come changes in strategy.
Buffett has also been a strong detractor of Bitcoin, just as he was formerly of Gold. Interestingly, Buffett’s reasoning on Bitcoin as an investment is precisely the same as his reasoning on Gold – a lack of utility.
Could a shift in his view on Gold also signal a similar perspective in Bitcoin? His arguments against cryptocurrencies are effectively the same.
Nevertheless, with current market shifts, change is always possible. Who knows, Buffett may one day be Bitcoin’s biggest fan.