I was very surprised to read about Berkshire Hathaway’s share price going nowhere in gold terms. So, I looked up the prices of BRK-A and gold on 01 Feb 1999 and 01 Feb 2023, and did the sums.
In 1999 one share of BRK-A would have cost you 247 oz. of gold, and now, 24 years later, and having received zero dividends, you would get back about 236 oz. of gold if you sold your share...
So, looked at from a slightly different angle, inflation drained away any actual value appreciation in a solid company like Berkshire. Amazing. Our government hard at work, picking its citizens’ pockets. Inflation ought to be called the Vampire Tax. And then, of course, there’s the capital “gains” tax on the nominal “increase”. What a deal.
When you sell an asset, the government should allow you to adjust your cost basis upward to account for inflation. Not holding my breath on this happening anytime soon!
Tim, it’s far more likely that the kleptocrats in Fat City will increase the tax rate on capital gains. And as annual deficits and the national debt take us above the tree line, be prepared for the government’s puncturing those life-critical canisters labelled “Step-up in Basis Oxygen.”
Could also be the case often for real estate - e.g. in the case of the family home for 23 years sale value now vs gold ? About the same or 1.5x the ozs maybe.
Big difference a house gave stable location residency, home life for family & friends, life stories, accommodation and so much more.
Got to add interest on financing loan say 20 years as added cost.
If you had just bought gold as 66% value in Ozs in 1999, then the above enormous values that are priceless are hundreds of Ozs of gold.
Just worthy of taking into account, when considering retention of wealth via gold in inflationary times as store for value retention.
I am glad your timeshare has worked out great for you! The radio is filled with "Get Out of Your Timeshare" ads in my neck of the woods, so I guess not everybody has done so well with them. I own a lot of stock shares for greater than 25 years, since I live off the dividends and never sell unless the company looks like it will go belly up. So far, dividend income has grown enough each year to keep up with inflation. Don't know how I would compare with owning gold. Not really applicable in my case, because owning gold produces no income stream. Worried that continuing high inflation and expected recession will hit me hard in the coming years, so I have been buying some gold here and there. We need a Republican victory in 2024 to have any chance of escaping the apocalypse! Continue to appreciate the words of wisdom from BPR!
Usual story of any investment is do your homework, measure up pros and cons and then make sure ongoing costs or revenues are as understood as possible.
Not rocket science but too many go with gut feel and not facts.
Correct but the dates are being cherry-picked. Try that same experiment but choose late 2011, early 2012 as the start date and see what happens. you might get a slightly different result.
Warren Buffet is more of a story than a reality. His “never bet against America” in economic terms philosophy is very patriotic to say the least, but even Mike Tyson got knocked out with an upper cut. I would never bet against us in “military terms” because when that becomes an issue, I will personally be on the front lines defending our beautiful land. 😃
The ONLY smart investment Buffet has ever made is buying Coca Cola stock. Other than that, he goes around peddling the idea of purchasing good solid long term companies with 20 years of track record, or “Will they still be around in xyz number of years?” Hogwash concept. He buys them up, then ends up selling them too early. 5,10,15 years later (selling them too early) exactly like he did with the airline and banking industry stocks he dumped. 😂 What a schmuck! Is he nice guy? Absolutely, filthy rich? You better believe it! Honest, uh not too sure about that, 😂.
Anyway, nothing wrong with immortalizing him as one of the greatest investors of all time, whatever that means! 😹
I never like Buffet after he screwed me by forcing me to sell my Heinz stock to him. Yea, I made a profit, but it pushed me into a higher tax bracket, and then I struggled to find a comparable stock to invest in to make up for the loss of income from Heinz. I agree that "one of the greatest investors of all time" is gobbledygook. I think Jesse Livermore deserves that title, whatever it means.
Hey Egypt. Yeah, but he is definitely a shill for the status quo. He will say anything to undermine the middle class. As long as he in the Uber, rich stay on top. He only pretends to be a man of the people.
The general geographic location of Bill's ranch is rich in lithium. Many other precious minerals and rare earth elements may be present. Bill may be sitting on a bonanza!
In most countries (other than the USA), the government owns the mineral resources on your land. I suspect this is true for Argentina. Also, lithium mining requires lots of water ( approximately 2.2 million liters of water to produce one ton of lithium). Bill's ranch doesn't have much water for its present operations. Mining is also very messy. Bill should stick to cattle ranching, making great wine, and writing interesting posts!
After reading your comment I checked out Argentina's policy on mineral rights and you were correct. The Argentine government owns the mineral rights, the property owner owns the surface rights. So if there are valuable minerals on Bill's ranch he would have to contract with the government for the mining rights.
It appears that Argentina has two currencies: the Peso that rapidly loses value because its government prints them galore, and the dollar which, despite losing purchasing power in the US, serves as a stable store of value in Argentina
Makes me wonder if what works in Argentina will work in the US. But instead of using a foreign currency, perhaps the US Treasury could create one by issuing, for example, one Goldback for every 10,000 Greenbacks. If they did, it would make officially available to all Americans the advice Bill, Joel, Dan and Tom have long been expounding
Hey Dave. I literally hate the idea of the government establishing the price with anything. It’s just reeks of price controls. They never work. Why not let the market set the rate? Do you remember Nixon’s price controls? In my humble opinion capital controls are never a good idea. Ever. The marketplace works for a reason.
Agreed, but I believe PG's comment (it's now deleted so I'm doing this from memory) was to tie the dollar to gold. I'm a big free market guy and don't want the government doing much of anything, much less establishing prices. But, and I think this was the context of my post, we have to get away from fiat currency.
I'm all for whatever will stop our elected representatives from effectively buying votes by spending money the government doesn't have.
However, it's "the Gold Standard" that concerns me. If it means "convertibility," then in short order whatever gold is supporting the Gold Standard will fast disappear as people exchange paper for gold.
But if convertibility means the right to exchange paper Greenbacks for paper Goldbacks at some TBD exchange rate, then this form of Gold Standard will open a wide range of options for citizens and our Congressional representatives
However, I'm not sure what impact the existence of Goldbacks would have on the US Mint, which sells gold coins at a profit. If it is allowed to keep selling gold to the public, I suspect their revenue will continue to exceed their expenses keeping it as a rare public entity: a profitable one rather than a break-even one
FYI: Many years ago when I was a political appointee, I ran a for-profit business within a Federal Agency. My political overlords loved it. It was a source of funds for them to spend that were in addition to those appropriated by Congress. This "business" doesn't exist anymore. It was subsumed by the private sector, rightfully so.
Hey Jim. I understand what you are saying. I know in the beginning people would rush to trade your dollars for physical. But once you realize you could always do that that would totally put the brakes on it. I never remember my father going to a Fed window and cashing in gold four dollars. Or vice versa, yes I agree in the beginning and white create a problem. But like you said, if we could stop these pigs from spending money like fools, it would be heavenly. A free market. Can you only imagine how this country would take off if they cut the regulations by 70% .
Bill, good to see you're back in Argentina - that's where your most interesting letters come from. Although the letter from Ireland telling about your encounter with the flaming crow was quite entertaining. What's the situation with the Originarios?
Not sure how Mr. Dyson can say, an ounce of gold buys you the same number of Berkshire shares now as it did 23 years ago. Historical charts show one share of BH stock in early 1999 at about $68,000 a share and gold at $522 an ounce (130 oz of gold for one share). Today BH stock is about $467,000 and gold at $1833 an ounce (255 oz of gold for one share). A big discrepancy IMO, not to mention I don't know how many times BH stock has split during those 23 years. I await your reply.
I guess it would depend then when you did the calculations that year (1999), as it appears as though gold prices fluctuated quite a bit that year, but using the average price for the year is probably more accurate. Thanks for your reply.
Joel, ‘’mental defective’’ or not, the pleasure of excellent Argentine Baby Bife and copious Malbec is worth whatever pain may be entailed. I’m dealing with pain presently watching the CIC mental defective bloviate nonsense from DC. BA baby!
First Investment Newsletter “SERVICE” that I “really enjoy” over all others in my lifetime. These guys are writing about investing in real, tangible assets that appreciate over time.
Reader’s challenge them to “get in the game” all the time. Most miss the point of the advice.
Don’t forget “Investing is NOT a destination, it is a journey.
Face it folks.
THE GAME IS GAMED!
Real Estate, Farming/Wineries, Gold/Silver, Oil & Gas, etc.
Bill it might be time to take a page out of history, when Alexander could reach Tyre, he build a causeway. When Julius Caesar wanted to scout and put fear into the Germans he built a bridge crossed the Rhine and took it down on the way back.
It might be time to invest some capital or move the crops to the other side of the river.
What if I had listened to my father, instead of believing I was smarter? After my father's failed investment in 1964 in Scotch Whisky purchasing 4 barrels learned in 1974 the sales tax on the product in Scotland exceeded the tax levied on the same product sold in the USA. Transporting 4 barrels to USA exceeded the value of the product. He sold the whisky back to the distiller for pennies on the dollar .
Determined never to be cheated again in 1976 he purchased 200 ounces of South African Krugerrands at $127 each. In 1980 he traded 80 ounces for an apartment building (still owned by my mother and worth 1.1 million (on paper) today. The seller had mismanaged the property reducing it's income into the negative and needed some fast cash on his way out of town.
Buda, your simple question points to a vast literature on civil disobedience. I highly recommend Michael Huemer’s book “The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey” (2013). A shorter version of his arguments can be found in Huemer and Layman, “Is Political Authority an Illusion? A Debate” (2022). You should skip these books if you fear being shunned by friends who might wonder why you’ve begun lauding philosophical anarchism or its cousin, anarcho-capitalism.
The short and sweet of Huemer’s position: you’re not only allowed to disobey unjust laws but also OBLIGATED in some cases to disobey them (think laws mandating returning slaves to their “rightful owners”).
Much like the US government looks the other way, when the bag of cash is handed from lobbyist to a congressman/woman.
It's not right, but those in power aren't going to say anything about it.
Why?
Because the people in power stand to benefit the most from this chicanery. So why would they?
Those US dollars come in from outside the borders of Argentina. In the form of trade and tourism. The bank rate is for locals, who spend their money as fast as they make it. Having that "other" rate gets outside dollars coming in, at what would seem to them to be a premium.
For doing business with a country seemingly on its heels.
I was very surprised to read about Berkshire Hathaway’s share price going nowhere in gold terms. So, I looked up the prices of BRK-A and gold on 01 Feb 1999 and 01 Feb 2023, and did the sums.
In 1999 one share of BRK-A would have cost you 247 oz. of gold, and now, 24 years later, and having received zero dividends, you would get back about 236 oz. of gold if you sold your share...
So, looked at from a slightly different angle, inflation drained away any actual value appreciation in a solid company like Berkshire. Amazing. Our government hard at work, picking its citizens’ pockets. Inflation ought to be called the Vampire Tax. And then, of course, there’s the capital “gains” tax on the nominal “increase”. What a deal.
When you sell an asset, the government should allow you to adjust your cost basis upward to account for inflation. Not holding my breath on this happening anytime soon!
Tim, it’s far more likely that the kleptocrats in Fat City will increase the tax rate on capital gains. And as annual deficits and the national debt take us above the tree line, be prepared for the government’s puncturing those life-critical canisters labelled “Step-up in Basis Oxygen.”
Could also be the case often for real estate - e.g. in the case of the family home for 23 years sale value now vs gold ? About the same or 1.5x the ozs maybe.
Big difference a house gave stable location residency, home life for family & friends, life stories, accommodation and so much more.
Got to add interest on financing loan say 20 years as added cost.
If you had just bought gold as 66% value in Ozs in 1999, then the above enormous values that are priceless are hundreds of Ozs of gold.
Just worthy of taking into account, when considering retention of wealth via gold in inflationary times as store for value retention.
I am glad your timeshare has worked out great for you! The radio is filled with "Get Out of Your Timeshare" ads in my neck of the woods, so I guess not everybody has done so well with them. I own a lot of stock shares for greater than 25 years, since I live off the dividends and never sell unless the company looks like it will go belly up. So far, dividend income has grown enough each year to keep up with inflation. Don't know how I would compare with owning gold. Not really applicable in my case, because owning gold produces no income stream. Worried that continuing high inflation and expected recession will hit me hard in the coming years, so I have been buying some gold here and there. We need a Republican victory in 2024 to have any chance of escaping the apocalypse! Continue to appreciate the words of wisdom from BPR!
Usual story of any investment is do your homework, measure up pros and cons and then make sure ongoing costs or revenues are as understood as possible.
Not rocket science but too many go with gut feel and not facts.
PGV: Good advice.
Correct but the dates are being cherry-picked. Try that same experiment but choose late 2011, early 2012 as the start date and see what happens. you might get a slightly different result.
Warren Buffet is more of a story than a reality. His “never bet against America” in economic terms philosophy is very patriotic to say the least, but even Mike Tyson got knocked out with an upper cut. I would never bet against us in “military terms” because when that becomes an issue, I will personally be on the front lines defending our beautiful land. 😃
The ONLY smart investment Buffet has ever made is buying Coca Cola stock. Other than that, he goes around peddling the idea of purchasing good solid long term companies with 20 years of track record, or “Will they still be around in xyz number of years?” Hogwash concept. He buys them up, then ends up selling them too early. 5,10,15 years later (selling them too early) exactly like he did with the airline and banking industry stocks he dumped. 😂 What a schmuck! Is he nice guy? Absolutely, filthy rich? You better believe it! Honest, uh not too sure about that, 😂.
Anyway, nothing wrong with immortalizing him as one of the greatest investors of all time, whatever that means! 😹
I never like Buffet after he screwed me by forcing me to sell my Heinz stock to him. Yea, I made a profit, but it pushed me into a higher tax bracket, and then I struggled to find a comparable stock to invest in to make up for the loss of income from Heinz. I agree that "one of the greatest investors of all time" is gobbledygook. I think Jesse Livermore deserves that title, whatever it means.
No doubt, up there with Sir Templeton.
Hey Egypt. Yeah, but he is definitely a shill for the status quo. He will say anything to undermine the middle class. As long as he in the Uber, rich stay on top. He only pretends to be a man of the people.
The general geographic location of Bill's ranch is rich in lithium. Many other precious minerals and rare earth elements may be present. Bill may be sitting on a bonanza!
SC
In most countries (other than the USA), the government owns the mineral resources on your land. I suspect this is true for Argentina. Also, lithium mining requires lots of water ( approximately 2.2 million liters of water to produce one ton of lithium). Bill's ranch doesn't have much water for its present operations. Mining is also very messy. Bill should stick to cattle ranching, making great wine, and writing interesting posts!
After reading your comment I checked out Argentina's policy on mineral rights and you were correct. The Argentine government owns the mineral rights, the property owner owns the surface rights. So if there are valuable minerals on Bill's ranch he would have to contract with the government for the mining rights.
It appears that Argentina has two currencies: the Peso that rapidly loses value because its government prints them galore, and the dollar which, despite losing purchasing power in the US, serves as a stable store of value in Argentina
Makes me wonder if what works in Argentina will work in the US. But instead of using a foreign currency, perhaps the US Treasury could create one by issuing, for example, one Goldback for every 10,000 Greenbacks. If they did, it would make officially available to all Americans the advice Bill, Joel, Dan and Tom have long been expounding
"Bingo. Problem solved." -- PG V
So beautifully simple, yet so unattainable in this whacked world in which we now live.
Hey Dave. I literally hate the idea of the government establishing the price with anything. It’s just reeks of price controls. They never work. Why not let the market set the rate? Do you remember Nixon’s price controls? In my humble opinion capital controls are never a good idea. Ever. The marketplace works for a reason.
Agreed, but I believe PG's comment (it's now deleted so I'm doing this from memory) was to tie the dollar to gold. I'm a big free market guy and don't want the government doing much of anything, much less establishing prices. But, and I think this was the context of my post, we have to get away from fiat currency.
I'm all for whatever will stop our elected representatives from effectively buying votes by spending money the government doesn't have.
However, it's "the Gold Standard" that concerns me. If it means "convertibility," then in short order whatever gold is supporting the Gold Standard will fast disappear as people exchange paper for gold.
But if convertibility means the right to exchange paper Greenbacks for paper Goldbacks at some TBD exchange rate, then this form of Gold Standard will open a wide range of options for citizens and our Congressional representatives
However, I'm not sure what impact the existence of Goldbacks would have on the US Mint, which sells gold coins at a profit. If it is allowed to keep selling gold to the public, I suspect their revenue will continue to exceed their expenses keeping it as a rare public entity: a profitable one rather than a break-even one
FYI: Many years ago when I was a political appointee, I ran a for-profit business within a Federal Agency. My political overlords loved it. It was a source of funds for them to spend that were in addition to those appropriated by Congress. This "business" doesn't exist anymore. It was subsumed by the private sector, rightfully so.
Hey Jim. I understand what you are saying. I know in the beginning people would rush to trade your dollars for physical. But once you realize you could always do that that would totally put the brakes on it. I never remember my father going to a Fed window and cashing in gold four dollars. Or vice versa, yes I agree in the beginning and white create a problem. But like you said, if we could stop these pigs from spending money like fools, it would be heavenly. A free market. Can you only imagine how this country would take off if they cut the regulations by 70% .
Bill, good to see you're back in Argentina - that's where your most interesting letters come from. Although the letter from Ireland telling about your encounter with the flaming crow was quite entertaining. What's the situation with the Originarios?
Not sure how Mr. Dyson can say, an ounce of gold buys you the same number of Berkshire shares now as it did 23 years ago. Historical charts show one share of BH stock in early 1999 at about $68,000 a share and gold at $522 an ounce (130 oz of gold for one share). Today BH stock is about $467,000 and gold at $1833 an ounce (255 oz of gold for one share). A big discrepancy IMO, not to mention I don't know how many times BH stock has split during those 23 years. I await your reply.
Hi Alanphilipi,
You got , the gold price for 1999 wrong , Jan 99 started at 290 $ the high was 340 $ and low 252 $
Between the high and the low medium price is 290 , by coincidence is the price of January 99
Now if you redivide 68.000 bye 290 $ you get 234 .
I guess it would depend then when you did the calculations that year (1999), as it appears as though gold prices fluctuated quite a bit that year, but using the average price for the year is probably more accurate. Thanks for your reply.
Fantastic as always.
Joel, ‘’mental defective’’ or not, the pleasure of excellent Argentine Baby Bife and copious Malbec is worth whatever pain may be entailed. I’m dealing with pain presently watching the CIC mental defective bloviate nonsense from DC. BA baby!
First Investment Newsletter “SERVICE” that I “really enjoy” over all others in my lifetime. These guys are writing about investing in real, tangible assets that appreciate over time.
Reader’s challenge them to “get in the game” all the time. Most miss the point of the advice.
Don’t forget “Investing is NOT a destination, it is a journey.
Face it folks.
THE GAME IS GAMED!
Real Estate, Farming/Wineries, Gold/Silver, Oil & Gas, etc.
Those are part of Bills Excellent Adventure.
Party-on, dude!
Bill it might be time to take a page out of history, when Alexander could reach Tyre, he build a causeway. When Julius Caesar wanted to scout and put fear into the Germans he built a bridge crossed the Rhine and took it down on the way back.
It might be time to invest some capital or move the crops to the other side of the river.
What if I had listened to my father, instead of believing I was smarter? After my father's failed investment in 1964 in Scotch Whisky purchasing 4 barrels learned in 1974 the sales tax on the product in Scotland exceeded the tax levied on the same product sold in the USA. Transporting 4 barrels to USA exceeded the value of the product. He sold the whisky back to the distiller for pennies on the dollar .
Determined never to be cheated again in 1976 he purchased 200 ounces of South African Krugerrands at $127 each. In 1980 he traded 80 ounces for an apartment building (still owned by my mother and worth 1.1 million (on paper) today. The seller had mismanaged the property reducing it's income into the negative and needed some fast cash on his way out of town.
Question: How to make a small fortune buying a farm?
Answer: You ned to start with a big fortune.
Jokes aside The money is well spent as one will have invested in one's great pleasure as I have happily discovered
Now if we want to scratch our left ear with our right foot , we can also do this one .
August ( 15 ) 1971
Dow 800 ( around ) high 37.000 ( just not ) 46,26 folds 👏👏👏 ( did not count the dividend .
Gold 35 ( around ) high 2070 ... 59 folds 👏👏👏👏👏
Real estate can only talk Geneva and Australia
Trust me around 45 folds. It counting the rent you could earn . 👏👏👏👏
Now I think we did all 👍😉
Buda, your simple question points to a vast literature on civil disobedience. I highly recommend Michael Huemer’s book “The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey” (2013). A shorter version of his arguments can be found in Huemer and Layman, “Is Political Authority an Illusion? A Debate” (2022). You should skip these books if you fear being shunned by friends who might wonder why you’ve begun lauding philosophical anarchism or its cousin, anarcho-capitalism.
The short and sweet of Huemer’s position: you’re not only allowed to disobey unjust laws but also OBLIGATED in some cases to disobey them (think laws mandating returning slaves to their “rightful owners”).
The government looks the other way.
Much like the US government looks the other way, when the bag of cash is handed from lobbyist to a congressman/woman.
It's not right, but those in power aren't going to say anything about it.
Why?
Because the people in power stand to benefit the most from this chicanery. So why would they?
Those US dollars come in from outside the borders of Argentina. In the form of trade and tourism. The bank rate is for locals, who spend their money as fast as they make it. Having that "other" rate gets outside dollars coming in, at what would seem to them to be a premium.
For doing business with a country seemingly on its heels.
Joel is a professional gigilo, a gentleman & scholar, a fine judge of wine & women. There are damn few left.