This week we have a shorter Outside the Box, from my friend David Galland at Casey Research, with an interesting insight into why gold can be considered as a poor investment by some rather influential investors (like Warren Buffett) while others may see it as the core of a diversified portfolio. As usual when I use someone's material for an OTB, I include a link at the end, if you want to look deeper. The rather large team at Casey Research specializes in gold, natural resources, and energy-related investments, for those with such an investing bent.
As a quick note, the feedback on this weekend's letter on taxes has been substantial, and a great deal of it is quite good and worth thinking about. Many bring up real problems with the position I took in my letter, and I may surprise you by agreeing with some of them. My intention right now (barring something happening between now and Friday night) is to take some of the better statements and questions, and answer them. I am not married to any specific plan. I just want to solve the problem and am open to anything that is politically feasible and makes sense, as long as we solve the basic problem of the deficit. I think it will make for a very interesting letter. I do read your feedback, by the way. So if you wanted to respond and wondered if I might actually read it, the answer is yes I do, and this week will answer as many as I can.
And to answer a question I get a lot, I buy a little physical gold every month. I don't even look at the price. The check is written the same day each month, for the same amount. I take delivery. I hope the price of gold goes down so I can get more gold per dollar. I also hope it ends up being worthless, as that will mean everything else has worked out just fine. But my gold is there just in case my crazy gold bug friends are right and we can't actually trust the government to find a reasonable solution to our dilemma. And maybe because deep down I really don't trust the (insert your favorite expletive). Just a little insurance, you understand.
So, until we connect this weekend, have a great week!
Your I am not a gold bug analyst,
John Mauldin, Editor
Outside the Box
Ben Graham's Curse on Gold
It seems that the mainstream investment community only takes a break from ignoring gold to berate it: one of gold's most outspoken critics, uber-investor Warren Buffett, did so recently in his latest shareholder letter. The indictments were familiar; gold is an inanimate object "incapable of producing anything," so any investor holding it instead of stocks is acting out of irrational…