Richard Russell Calls Buffett Stupid

Here is another kisah benar with a ivory tower occupant who talks about high finance but most probably never put a dollar in where his mouth is. I may not be a fan with Buffett, but you must respect he has got all his $ in the market constantly. Maybe Mr. Russell is selling his wife and children to raise all the cash possible to hoard up gold ? If he really has the faith in what he is saying, there is another USD45,000 profit out there per NYMEX gold contract. And it only cost him MR7k to buy 1 contract.

In my opinion:- $6,000 for gold ? Yes, of course ! Most probably my grandchildren would see that level in their lifetime. In ours ? I would be more comfortable to place bet on gold going to 710/ 860/1000 in our lifetime. As I mentioned to my kopi/tea friends on several occasions - gold needs to hit 1,800 to get back to an equivalent of its last historical high. What all the "experts" and fun cheong are screaming its current level is "historical high" have not taken into consideration of inflation adjustment the figure. 1 USD today is just a faction in value of itself 20 years ago. Therefore apple is not equal to an orange. In term of value investing, I am all the way siding with Mr. Buffett on this one.

Mr. Russell should see what will happen to gold when USD start to roar. And oh yes, I also happen to love paper currencies as Mr. Buffett.




With gold breaking to record highs, Dow theorist Richard Russell takes on the world's most famous gold bear, Warren Buffett (via King World News):

When investment "geniuses" like Warren Buffet displays his ignorance by denouncing gold, it adds little to his legacy. Warren's dad, Howard supported the gold standard). Warren Buffett's problem is that he only understands balance sheets and earnings. The value of a Picasso or a gem diamond or a bar of gold is outside Buffett's understanding. Which is sad, because Buffett's lack of understanding has kept many an American on the sidelines while gold surged higher in terms of Buffett's beloved paper currencies.

Russell says gold is on its way to $6,000:

This time, gold has, so far, only multiplied five times -- from 255 to 1430. If gold was to repeat its 1970 performance and multiply 24 times, it would rise to over 6,000. But there's a difference between the two gold bull markets: This time the other half of the world's population (China, India, Asia) has been added to the mix. And this time, the very viability of fiat currencies is a part of the picture.”   

Buffett riled up the goldbugs with various comments last week on CNBC. For instance:

"If you took all the gold in the world, it would make a 67 ft cube. It would be worth about $7 trillion, about a third of the value of all the stocks in the U.S. So you can own gold, which can do nothing, or stocks. You could also have farmland. If you gave me the choice, between all the farmland in the country, stocks like ExxonMobile, or gold, I'd choose the stocks and the farmland."