Warren Buffett has long been critical of gold as an investment, saying it “has no use” and that “magic metal” does not match “American mettle.” He once wrote that “Anyone who sees Mars will scratch his head” about how we treat the shiny game on this planet.
However, the Berkshire Hathaway is BRK.A,
boss just bought nearly 21 million shares of Barrick Gold GOLD,
worth $ 563 million, in the sale of shares in Wells Fargo WFC,
and JPMorgan Chase JPM,
, according to 13-F filings released Friday afternoon.
The move sparked buzz among gold bugs and other Wall Street watchers across the Internet, who saw Buffett’s trades as perhaps a shift in his view of the market.
The popular Zero Hedge blog took a deep dive into Buffett’s repositioning, saying it was “a signal that no one other than the Oracle Of Omaha now seems to be betting on the rest against the United States,” to ‘ t “the famous anti-gold investor has left banks – the backbone of America’s economy-driven economy – in favor of a gold miner.”
Of course, while gold bugs and spellbinding marketers come up with their own conclusions, Berkshire is, however, still deep in the banks, including Bank of America BAC,
, where it’s spent its money last month.
Mike Shedlock of Sitka Pacific Capital Management took exception to the interpretation of the news, explaining in a blog post that it is as simple as “Buffet knows financial problems are struggling because of COVID. And Barrick pays a dividend.” Furthermore, Barrick is just a small piece of his general pie, and Buffett did not return his stakes in Amazon AMZN,
as Apple AAPL,
.
“This is not yet an enormous cave nor a fundamental sea of change regarding gold,” Shedlock wrote. “Potentially, it’s a short-term sell-off signal that matches the recent pullback.”
Meanwhile, the stock market is lagging behind record highs. The Dow Jones Industrial Average DJIA,
closed with a gain of 1.8% per week, while the S&P 500 SPX,
traded short on a record before the week ended with less than 1%. The Nasdaq Composite COMP,
for the week barely higher ready. The index has so far placed 32 records in 2020.
Barrick Gold was up 8% at the last check after hours.
.
