Gold is often touted as a reliable inflation hedge and a valuable investment, but should it be part of your portfolio? Legendary investor Warren Buffett remains skeptical, favoring productive assets like stocks over commodities such as gold.
In 2012, Buffett compared the performance of gold to Berkshire Hathaway, highlighting a stark contrast. When Berkshire was first acquired, gold was priced at $20 per ounce, while Berkshire shares were $15 each. By 2012, gold had risen to $1,600, but Berkshire’s A shares soared to $120,000. Nearly a decade later, gold stood at $1,798, while Berkshire shares surpassed $443,000.
For Buffett, the distinction lies in earning power. “It’s very hard for an unproductive investment to beat productive investments over any period of time,” he said at Berkshire Hathaway’s 2012 Annual Meeting. He predicted that over 50 years, not only would Berkshire outperform gold, but common stocks and even farmland would likely generate better returns.
Buffett’s insights suggest that productive, income-generating assets typically offer greater long-term growth than commodities that rely purely on price action.
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© 2025 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.