Warren Buffett has long been critical of gold as an investment, saying that it “has no utility” and that the “magical metal” is no match for “American mettle.” He once wrote, “Anyone watching from Mars would be scratching their head” over how we treat the shiny stuff on this planet.
Yet the Berkshire Hathaway BRK.A,
The move kicked up buzz among gold bugs and other Wall Street watchers across the internet, who saw Buffett’s trades as perhaps signalling a shift in his views on the market.
The popular Zero Hedge blog took a deep dive into Buffett’s repositioning, saying that it’s “a signal that none other than the Oracle Of Omaha appears to now be quietly betting against the United States,” because “the famously anti-gold investor has abandoned banks — the backbone of America’s credit-driven economy — in favor of a gold miner.”
Of course, while gold bugs and staunch market bears come up with their own conclusions, Berkshire is still, nevertheless, deep into the banks, including Bank of America BAC,
Mike Shedlock of Sitka Pacific Capital Management took exception to the interpretation of the news, explaining in a blog post that it’s as simple as “Buffet [sic] knows financials are struggling due to COVID. And Barrick pays a dividend.” Furthermore, Barrick is merely a tiny piece of his overall pie, and Buffett didn’t back off his stakes in Amazon AMZN,
“This is neither a huge cave-in nor a fundamental sea of change regarding gold,” Shedlock wrote. “Potentially it is a short-term sell signal that corresponds to the recent pullback.”
Meanwhile, the stock market continues to stalk record highs. The Dow Jones Industrial Average DJIA,
Barrick Gold, at last check, was up more than 8% after hours.