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2013 Resolutions
January 2nd, 2013 9:04 PM

My resolution is similar every year. For this year
of 2013, I will run one Marathon if possible.
If not, at least I will run a marathon relay.

I will continue try my best to lose weight. BUt 10 lbs
is good enough. And it will be hard for me to lose more.

Last year's focus was running. And this year I will
focus on reading. And read financial books.

Yesterday, when my wife and my daughter went shopping
at Union Square Center of San Francisco. I read
Warren Buffett's annual letters to his share holders.

I will introduce lots of his investing ideas this year.
Here is the first one for the year 2013:

Why Warren Buffett does not invest on gold?

According to berkshire hathaway annual report 2011(Page 17-18),
Gold belongs to a category of investment which will never
produce anything, but they are purchased in the buyer's hope
that someone else will pay more for them in the future.
Though gold has some industrial and decorative utility,
it is either of not much use or precreative.

Today the world’s gold stock is about 170,000 metric tons.
If all of this gold were melded together, it
would form a cube of about 68 feet per side. (Picture it
fitting comfortably within a baseball infield.) At
$1,750 per ounce gold’s price as I write this  its value
would be $9.6 trillion. Call this cube pile A

Let’s now create a pile B costing an equal amount. For that,
we could buy all U.S. cropland (400 million acres with output
of about $200 billion annually), plus 16 Exxon Mobils (the world’s
most profitable company, one earning more than $40 billion annually).
After these purchases, we would have about $1 trillion left over
for walking-around money (no sense feeling strapped after this buying
binge). Can you imagine an investor with $9.6 trillion selecting
pile A over pile B?

Whta do you think after reading this?


Posted in:General
Posted by Eric Fang on January 2nd, 2013 9:04 PMPost a Comment

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