Here is what some of the most respected investors have to say on the subjects of gold, investing and risk.
John Paulson is a world leading hedge fund manager. Has invested over $4.6 Billion in gold. In 2015, Forbes estimated Paulson’s net worth to be $11.3 billion. He is perhaps best known for his bet against the U.S. mortgage market in 2007. His firm made $15 billion from the trade and Paulson is estimated to have personally taken home $4 billion.
“I view gold as a currency, not a commodity. It’s importance as a currency will continue to increase as the major central banks around the world continue to print money.”
Paulson is a strong advocate of gold’s role in the financial markets.
Born in Hungary in 1930, George Soros is a a well known investor, philanthropist, author and economic commentator. In 2014, Forbes estimated his net worth to be $23 billion making him the 7th richest person in the world. He founded the Quantum fund, the most successful hedge fund in history, generating over $40 billion in returns since its inception in 1973.
“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”
We particularly like the above quote from George Soros. We think “Good investing is boring.” applies perfectly to buying physical gold. Buy the gold. Store your wealth. Sleep well at night. Boring but a good move in troubled times.
Jim Rogers is a co-founder of the Quantum fund with George Soros. Jim has an estimated net worth of $300 million. Jim is well known for his books “Investment Biker”, “Hot Commodities” and “Adventure Capitalist”. In particular, his book “Hot Commodities” showed why there would be a 10+ year commodity boom across the world from the late 1990’s into the 2000’s.
“The price of a commodity will never go to zero. When you invest in commodities futures, you’re not buying a piece of paper that says you own an intangible piece of company that can go bankrupt.”
Jim’s quote gets to the heart of owning physical gold. It is a real asset you can buy, hold and sell. You can be sure that due to global demand, there will always be a price on gold. A gold bar cannot go bankrupt.
Mark Skousen has been rated as one of the top most influential 20 living economists, author of over 25 books, founder of FreedomFest, is chair of management at Grantham university and regular commentator on financial news programs. His website at www.mskousen.com provides a wealth of information for the sophisticated investor.
“Bitcoin is not an actual physical coin, and if computers are shut down, you can’t buy or sell them. That’s why nothing will ever replace gold and silver coins themselves, and all investors should have them at home or in a safe deposit box.”
Mark highlights a key difference between an electronic currency and a physical asset you can hold and touch. When it comes to an accepted global currency with intrinsic value, gold cannot be beaten.
Born in 1946, Marc is a Swiss investor now based in Asia. He is perhaps best known for his monthly Doom Boom and Gloom report, his contrarian investment views, his expectation of a US dollar collapse and general bearish outlook. In his book “Tomorrow’s Gold: Asia’s Age of Discovery”, written in the early 2000’s Marc Faber predicted the rise of commodity prices and Asia’s economic influence.
“Buy a $100 U.S. bond and frame it to teach your children about inflation by watching the U.S. bond value diminish to almost nothing over the next 20 years.”
“One day the price of gold will be higher than the Dow Jones.”
We thought we’d include 2 quotes from Marc, they are both very relevant to any discussion about gold. The first illustrates how the US dollar, over time, is decimated by inflation. The second alludes to the permanent nature of gold and that it will outlast any financial system we care to build.
So while Alan Greenspan is far better known as the U.S. Federal Reserve chairman from 1987 – 2006, and not strictly considered an “investor”, his monetary policies have had far reaching effects on investors. While his policies are associated increasing the money supply that perpetuated a boom and bust economic cycle, he does not have much faith in a fiat currency system.
“Gold, unlike all other commodities, is a currency…and the major thrust in the demand for gold is not for jewelry. It’s not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.”
“Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.”
It is sobering to realise that for someone who sat at the epicentre of U.S. money printing Alan Greenspan had far more faith in gold, not paper, as a currency.
Peter Lynch was the manager of the famed Fidelity Investments Magellan Fund from 1977 to 1990. During this time he averaged an annual return of 29.90% making it the best performing mutual fund on Wall Street. He increased assets in the fund from $18 million to $14 billion. The term “ten bagger” – a stock that has risen ten times its original value – was coined by Peter.
“Know what you own, and know why you own it.”
This is a classic statement that many investors forget in the excitement of buying a new investment. It applies equally to gold. You are buying gold primarily as a “store of value”. Buy gold because it is a sensible, safe haven for a percentage of your wealth. It will shield you in times of crisis. Remember that always.
David Einhorn was born in 1968 and according to Forbes had a net worth of $1.91 billion in 2015. He founded a hedge fund, Greenlight Capital, in 1996.
“We can’t change the course of events, but we can attempt to protect capital in the face of foreseeable risks.”
” … one nice thing about gold is that it doesn’t even have quarterly conference calls.”
These two quotes from David Einhorn explain the essence of gold investing. The first quote succinctly describes the role of gold to protect capital (your wealth) in the face of things we can expect (another crash at some point).
The second quote shows owning gold is a quieter, calmer experience than being a stock investor. No conference calls, no annual reports, quarterly earnings or profit warnings.