Why do Buffett not love to invest in gold -the mystery of productive assets and non -productive assets

24.09.2022

Number of this text: 667, reading time for about 2 minutes

Introduction: Traditional opinions believe that gold can be regarded as a good investment in hedging inflation. But "stock god" Buffett has a different view.

Author | Vision

As the inflation rate of inflation in many countries and regions around the world and other countries and regions in the world has hovered at the highest level in decades. From cars to gasoline, from daily grocery to apartments to rent, the prices of almost all products have risen rapidly. In this case, traditional views believe that assets such as gold can be regarded as a good investment in hedging inflation. But "stock god" Buffett has a different view.

Buffett believes that from the perspective of value investment, in the long run, gold is not a good investment product. In the short term, the performance of gold may be better than the productive assets biased by Buffett, that is, assets that can generate cash flow, such as company equity, property and land, etc.; It is obviously better than gold.

Compared with such assets, there are some structural disadvantages in gold. The rise in gold prices is the only way for investors to benefit through gold. However, because gold does not have any output, the price of gold will only fluctuate up and down due to changes in supply and demand. Therefore, in Buffett's view, gold is a non -productive asset.

In contrast, productive assets, such as real estate, are not only valuable in themselves, but also can bring constant sources of rent to the owner; the same is true of the land that can produce crops every year; stocks are typical productive assets, although the stock price It is also affected by market supply and demand relationships, but its internal value still depends on the company's business management, products, business and profits. As Buffett's life mentor and legendary investor Graham said: In the short term, the stock market is like a voting machine, that is, the market price is determined by people's irrational attitudes; but in the long run, the stock market is a weighing machine. The company's intrinsic value is its weight.

Why does Buffett not like to invest in gold -the mystery of productive assets and non -productive assets. Click the video to see what happens!

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