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Warren Buffett was once asked if gold still had a place in modern investing. His answer? It’s “just about the last thing I want to own.”
The question came up during Berkshire Hathaway’s 2005 annual meeting. An attendee wanted to know if Buffett, as one of the world’s most influential investors, should recognize gold’s historic role as a financial foundation—especially in an era of inflation, asset bubbles, and increasing instability. Buffett didn’t deny the risks, but he didn’t shy away from the metal.
“I would much rather have 100 acres of land near here in Nebraska, or an apartment house, or an index fund,” he said.
For Buffett, it all comes down to utility. Gold, in his words, produces nothing. “If you had gold, you paid $20 in 1900 or thereabouts,” he said. “Then let’s say you had $400 a hundred years later. And in the meantime, you paid insurance and maybe some storage cost.”
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In that same span, the Dow Jones Industrial Average rose from roughly 60 to more than 11,000—delivering regular dividends along the way. “A farm has a utility. An apartment house has a utility. A business will produce a profit,” Buffett said.
He then added a comparison that became one of his most memorable. “I’d rather have the ability to sell people a sweet pound 20 years from now,” he said. “And if they are trading seashells, I will take an appropriate number of seashells instead of paper money for it.”
Buffett is not against hard assets. He just prefers those who produce.
He still lives in the Omaha home he bought in 1958 for $31,500. Today, that property is estimated to be worth about $1.4 million, according to Zillow. While he hasn’t turned a profit, the house is a quiet example of long-term appreciation.
He also praised residential real estate more broadly. In a 2012 CNBC interview, he said that if he could buy “a couple hundred thousand single-family homes” with 30-year mortgages, he would. He called them “a very attractive asset class” and described fixed-rate loans as “the best instrument in the world.”