Friday, April 24, 2015

Giving out a free book !!!

Dear Readers,

How has your week been?

Anyway, I've always believe in passing the knowledge baton and I am giving out a free book today by just answering a simple question!!

The title of the book I'm giving out: Guide to Financial Management (Hardcover). I bought this book from Kinokuniya for $48.15 5 years ago..




Check out the description here:
(Just to add: this book isn't about fundamental analysis; but it has some accounting info which will be useful as well)

Here's the question:

Why Warren Buffett doesn't invest in gold?

You can either leave your answers in the comment section under this post or drop me an email: kelvin17@gmail.com. Sorry I cant write much as I m quite busy with my studies..

I ll update this & announce the winner in this blog sometime next week. (after my exams next Thursday)...so u ll can email before 2359 on Thursday. I ll be choosing the best answer. Multiple entries are not allowed.

I will be giving out more books on and off..so follow my posts at the right hand corner, or link me up.
( will be deleting this post after the book has been given out. If there's no response by Thursday, I ll be giving it to the library near my house :) )

Good luck!

5 comments:

  1. Gold is an unproductive asset. Assets like gold will never produce anything,

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  2. Non-productive asset that won't / can't create wealth/value.

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  3. As mentioned, it is an unproductive assets as it only protects it own value as compare to equity, you get can create wealth by getting dividends and etc. which in return will create a strong compound interest which also mean more money as compared to gold itself

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  4. Gold is unproductive and its value is only based on supply and speculative demand (no intrinsic value other than in electronics)

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  5. To quote from the Oracle of Omaha directly:

    “When we took over Berkshire, it was selling at $15 a share and gold was selling at $20 an ounce. Gold is now $1600 and Berkshire is $120,000. Or you can take a broader example. If you buy an ounce of gold today and you hold it at hundred years, you can go to it every day and you could coo to it and fondle it and a hundred years from now, you’ll have one ounce of gold and it won’t have done anything for you in between. You buy 100 acres of farm land and it will produce for you every year. You can buy more farmland, and all kinds of things, and you still have 100 acres of farmland at the end of 100 years. You could you buy the Dow Jones Industrial Average for 66 at the start of 1900. Gold was then $20. At the end of the century, it was 11,400, and you would also have gotten dividends for a hundred years. So a decent productive asset will kill an unproductive asset.

    “Why do you think gold bugs get so irate? Because they really do come out. If you go on CNBC and say that bonds are kind of a poor investment, people don’t get mad at you. You don’t hear from the Treasury. You can knock almost any investment and nothing happens. But when you talk about gold it’s different. Of course that says something about their motivation for ownership. They want people to agree with them. They want everybody to get so scared they run to a cave with gold. Caves might be a better investment than gold. At least they’re not producing more caves all the time. So they want people to be as afraid as they are. Incidentally, they’re right to be afraid of paper money. Their basic premise that paper money around the world is going to be worth less and less over time is absolutely correct. They have the correct basic premise. They should run from paper money. But where they run to is the mistake.”

    The basic premise is gold is a non-income generating asset that will remain the same after decades, while businesses can generate income and grow beyond its current size and yield more return in future. Plus returns of gold is dictated by macroeconomics force which are out of control for most investors, while for businesses the management can somehow influence how the business will perform, therefore it's a wiser choice to invest in stocks over gold.

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