Buffet Sells The Banks And Buys GOLD!

[MRM]

When you buy any mining or extraction stock, you're buying the company's reserves times the market price minus their cost of production. Many mining companies also keep an inventory to sell when prices are high. Buffet must have found a stock he thinks is undervalued, either because the expected future value of gold hasn't been factored into the stock yet, or he thinks the company's reserves and inventory are bigger than the the market has valued. Since he doesn't like to invest in gold based on market timing the price, he must think their reserves are bigger, or cheaper to extract, than the rest of the market has evaluated.

[Sooner or later]

Originally Posted by Tidybuoy

I watched a good interview with Warren Buffet the other day.

He sold certain banks (like Wells & Chase) because they are poorly managed. He is very pro Bank of America.

Be bought into a gold miner, not buying gold per say. He said he is not real fond of buying gold as an asset because it just sits there where as buying a mining company produces something - in this case gold.

The original post here implies that he is dumping banks for gold and that is not the case.

Precious metal mining stocks tend to outperform the metal on the upside and underperform on the downside. Mining costs are pretty much fixed.

It it costs $900 an ounce to mine the gold and it sells for $1000 an ounce they they make a $100. If the metal goes up 10% to $1100 the profit per once goes from $100 per ounce to $200 per ounce. A double in profit on a 10% rise in metal value. Stock price will reflect that double in profit.

[group911@aol.co]

Tabs. As a few have pointed out, you aren't telling the whole story but just the part that supports your beliefs. Snake oil salesman eventually convince themselves their brand of oil actually works.
https://www.marketwatch.com/articles/warren-buffett-berkshire-hathaway-scoops-up-more-bank-of-america-stock-51596637255?mod=article_inline

Originally Posted by tabs

Buffet unloaded his Wells Fargo.and JP.Morgan picking..up 563M in Barrick Gold.

That should tell ya sumthin. He wants to remain rich in the coming collapse. Also that move is indicitive of his prognosis for the American economy..

[RWebb]

I don't suppose that robots could reduce mining costs, could they?

[Esel Mann]

possibly. the challenge right now is all the 'easy' gold has been extracted. yield is falling (thus more costly to mine). the mines got burned in the last upswing making investments to extract more. they are being more cautious this time around.

buffet is simply buying in now because he see's an opportunity to make a quick profit. he wont be holding this terribly long.

[brainz01]

I don't think labor is the likely cost driver for gold. It's already a very capital intensive and mechanized industry.

[tabs]

With the FED printing he is betting Gold is going to go much higher..and raise his share price.

He is bailing out of problematic banks that may get stuck for big loan losses as all that credit starts to default.

BA last time around had lessor or little exposure to the subprime problem..Which indicates that they are wary and cautious. Read that as risk adverse.

So BOYZ it is a matter of nuance..He has gone to Gold as a hedge and even profit as he sees the FED printing a whole lot more money which pushes the USD down and Gold up.

BA says 3000 oz Gold...

Just BA saying that tells ya what in light of Buffet buying Gold amd that bank stock..what is Ba doing with their Gold position?

Such simple folks..

[tabs]

Pwd will tell ya a good pool player can look at the lay out of the balls on the table and see all the possible combinations of shots to make. A really good player can tell ya the position of all tje balls after the shot is made. Tje ectraordinary player can tell the lay out after the second shot. Then it becomes a matter of execution.

I see it as the balls are in continious motion on the table..i keep on caculating new data which i incorporate into the equation of the movement of tje balls on the table. Now think of the balls moving in a three dimensional space actually 4 with time instead of on a 2 dimensional surface. Once you can picture that you will have some idea of my what my thought process is like.

[Sooner or later]

In this case you scratched the cue ball.

[tabs]

I suppose we should talk about the Shadow Selves..which represents the repressed darker side and urges of human nature. Jordan Peterson has several lectures which should be illuminating for you about that.

Suffice it to say i understand my Shadow and have intergrated it into the conscious self. Which means it would be very easy to take you out to the deep end and leave you there. If the need be i would do it. Here in lies the ethical and moral dilemma where knowing how monsterous and horrible one can be one has faith and seeks solace in a higher force for forgiveness for being so dark and even to help with the temptation.

I found early on life is too short and the extensile struggle to hard to be anything other than being kind.. some people think being kind is a weakness i see that holding that view in of itself is a weakness which can be exploited.

I once talked to a HS Sophmore who had moved from Col to Ca with his parents. He had been in some real bad trouble with the law back there. Maybe a murder? He was telling me that the CA Gangbangers just thought that they were bad. That he was going to show them what being bad really meant. I told him to remember that if someone showed you a kindness it does not mean that person is weak. That stuck in his head as something to remember.. That kid was dangerous..

[tabs]

Originally Posted by Sooner or later

In this case you scratched the cue ball.

You can say whatever kind of disdainful bs you like.

[Sooner or later]

Originally Posted by tabs

You can say whatever kind of disdainful bs you like.

He did sell off the poorly managed bank stocks and bought 4 times as much of a well managed bank stock,

You failed to mention that in your daily manifesto.

[RWebb]

we might wish it was only daily

[jyl]

Generally, its good to be early, bad to be too early. I think it’s ideal to be not more than six months early. Losing money for over six months as you wait to be right gets really old. (At month 5 here. . . )