In has annual report, Warren Buffett said that there’s no reason to panic and buy gold instead of stocks. He said that running to gold instead of investing in American businesses is a money-losing mistake.
Buffett believes that the “magical metal” is no match for the value of American business stocks. A long-time advocate of rejecting knee-jerk reactions to the market in the short-term, Buffett said stockholders would have less than a penny of gain by investing in gold when they could have had a dollar if they had invested in the stock market.
Buffett plans to increase the size of his equity portfolio. He also addresses deficits and government debt in his most recent letter to shareholders. Berkshire Hathaway endured a $25 billion loss in the fourth quarter of 2018. The stock market giant also pointed out a key change to the format of his annual letter: he no longer opens the letter with the percentage change in Berkshire’s book value because, he said, the metric has lost its relevance.
Berkshire will continue to buy more stocks, but his main focus is using Berkshire’s $112 million in cash to purchase businesses that Berkshire will own entirely. In Buffett’s eyes, the marketplace, in general, looks expensive.