Row 29148

Row ID: 29148 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 29148 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

Warren Buffett disregards Bitcoin for the same reason he disregards gold: Both are unproductive assets; neither one generates cash flow, so the value of each is based solely on what another would pay to own it and thus is purely speculative.

Here is Buffett’s famous explanation about why he will always prefer stocks and real estate (cash-flow producing assets) over gold and other commodities (speculative assets):

“Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce — gold's price as I write this — its value would be about $9.6 trillion. Call this cube pile A.

Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 ExxonMobil's (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers — whether jewelry and industrial users, frightened individuals, or speculators — must continually absorb this additional supply to merely maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops — and will continue to produce that valuable bounty, whatever the currency may be. ExxonMobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.”

FieldValue
text Warren Buffett disregards Bitcoin for the same reason he disregards gold: Both are unproductive assets; neither one generates cash flow, so the value of each is based solely on what another would pay to own it and thus is purely speculative. Here is Buffett’s famous explanation about why he will always prefer stocks and real estate (cash-flow producing assets) over gold and other commodities (speculative assets): “Today the world's gold stock is about 170,000 metric tons. If all of this gold w…
label r/investing
dataType comment
communityName r/investing
datetime 2024-05-21
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Raw Record

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  "text": "Warren Buffett disregards Bitcoin for the same reason he disregards gold: Both are unproductive assets; neither one generates cash flow, so the value of each is based solely on what another would pay to own it and thus is purely speculative.\n\nHere is Buffett’s famous explanation about why he will always prefer stocks and real estate (cash-flow producing assets) over gold and other commodities (speculative assets):\n\n“Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce — gold's price as I write this — its value would be about $9.6 trillion. Call this cube pile A.\n\nLet's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 ExxonMobil's (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?\n\nBeyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers — whether jewelry and industrial users, frightened individuals, or speculators — must continually absorb this additional supply to merely maintain an equilibrium at present prices.\n\nA century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops — and will continue to produce that valuable bounty, whatever the currency may be. ExxonMobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.”",
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