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Berkshire Hathaway versus Gold over 20 years


Erewhon888
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Erewhon888
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Frank Hovis

I'm surprised at that result but you have selected a historic low point for gold as your start date:

10664_13446843331790_3.png

 

Whereas Berkshire Hathaway - this is a logarithmic graph to show the first twenty years more clearly - saw a clear decline in slope around this point.

image.png.2c86a5e87d3c06b97203e94f67bc3dda.png

 

Take it over ten years and you have: 

Gold 1,415 to 1,737     23% rise

BH 116,461 to 356,353   305% rise

 

The big rise in gold was 2001 to 2011 : 265 to 1,415   534% rise

And you either achieved that or you didn't.  I didn't.

 

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Erewhon888

Very interesting. I just tried 20 years arbitrarily so that shows the value of checking more broadly, and of inviting comment. Thanks.

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Frank Hovis
12 minutes ago, Erewhon888 said:

Very interesting. I just tried 20 years arbitrarily so that shows the value of checking more broadly, and of inviting comment. Thanks.

You made me look because it challenged my perception of the two; seeing gold as a simple hedge against inflation (plus a means of hiding wealth from the authorities) with shares both beating inflation and providing a decent return above that.

I'm talking long term for both - stock markets crash on a regular basis!

It has opened my eyes in that if gold ever plummets to such lows as in 2001 again then IMO it will become a one way bet for many years of big returns before selling up.  I've only been tracking it for the last dozen years or so when its returns, especially inflation-adjusted, have been unspectacular. 

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Erewhon888

So I had a look to see my personal experience. Under the influence of HPC I sold to rent in late 2007 and opened both Bullionvault and Goldmoney accounts with the proceeds of sale. The first transaction with BV was at a price of 11777 GBP/kg according to the contract note. So over 13 and a bit years we get:

image.png.3d91e5acb798450ba735f03fa58f78ac.png

I'm happy enough with that given the sense of insurance aspect compared with other options.

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SpectrumFX

I haven't got the time to do it, but it would be interesting to see what the position would be if you'd bought into each at £100 a month over the same period. I suspect that Buffet has done a lot better on that basis.

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Erewhon888
7 minutes ago, Frank Hovis said:

  I've only been tracking it for the last dozen years or so when its returns, especially inflation-adjusted, have been unspectacular. 

As a recipient of the state pension for a while, I tend to be more in the avoidance of loss than the looking for gains category. So unspectacular but safe is fine for me.

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