We’re starting off this update with some interesting gold news that actually came last week.
A filing showed last Friday (August 14) that Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) has bought about 21 million shares of Barrick Gold (TSX:ABX,NYSE:GOLD), paying around $560 million for the stake.
This development was surprising for many market watchers because Buffett has made his feelings for gold very clear in the past — and they aren’t positive.
“If you own one ounce of gold for an eternity, you still own one ounce of gold at its end” — Warren Buffett, Berkshire Hathaway
Speaking about the news, Ian Ball of Abitibi Royalties (TSXV:RZZ) pointed out that it’s not clear if Buffett or someone else at Berkshire Hathaway actually pulled the trigger on the Barrick purchase. But overall he believes it’s positive for gold — in fact, Ian described the unexpected move as “a very large endorsement for gold going forward and for the miners.”
“Here you have one of the most respected investors of all time making their first foray into the gold-mining sector. I thought it was quite encouraging that Berkshire didn’t buy gold, or a gold exchange-traded fund or an index of gold-mining companies. But they’re making a specific bet on one of the world’s top two largest gold miners” — Ian Ball, Abitibi Royalties
Investors seem to share that optimism — shares of Barrick rose about 10 percent on the TSX from last Friday’s close to the end of the day this past Monday (August 17).
Gold itself had its ups and downs this week, but overall a lot of optimism remains about the yellow metal. With that in mind, we asked our Twitter followers if they think gold is an investment that should always be held, or if there are times they would consider selling.
That’s a question that I got some color on during a conversation this week with Will Rhind of GraniteShares — in his opinion, the yellow metal should not be traded and should not be used as a quick way to make money. As it turns out, most of our Twitter poll respondents agree with Will — nearly 65 percent said they buy gold and keep holding it.
“If you’re a seller of gold right now, what are you buying? What is the alternative that is potentially more interesting or more relevant than gold? I think that’s why there’s so much interest in gold and people looking to hold onto gold through these times” — Will Rhind, GraniteShares
Finally, in the cannabis space this week, INN’s Bryan Mc Govern looked at the latest quarterly results in the sector. Matt Hawkins of Entourage Effect Capital told Bryan that from his perspective the industry is in good shape despite the impact of COVID-19.
“We’ve been investing in the industry since 2014, we’ve made 66 investments I believe. There’s never been a better time to invest in the industry” — Matt Hawkins, Entourage Effect Capital
Moving forward, he believes legalization momentum will pick up in the US at both the state and federal level no matter who wins the presidential election in November — Matt said that even conservative-leaning politicians are beginning to realize the revenue opportunities associated with legalization.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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