RE: RE: RE: Gold and Tulips Buffett understands gold. He started BH in the mid 1960s. The US went off the gold standard in 1971. He (and others) watched the price of gold skyrocket in the 1970s, then go from a high of around $600 in 1980 to trade in the $300-$400 price range for the next 24 years, followed by a big rise from about $400 in 2005 to almost $1,900 by August 2011, then down to around $1,400 today. Is this 12 year bull run ($270 range in 2001 to $1,400 today) just the beginning of a bigger run? Who knows? Buffett's position is that, though gold may in fact reach temendous new heights per ounce, it will be based on fear (inflation, worthless currency, war, political instability, etc.). Gold has limited practical utility, so the vast majority of gold just sits in vaults. He agrees that holding cash is dangerous, but if he had to pick between holding gold bullion (or gold stocks with expensive capx requirement and thus low yields) vs. owning stable, profitable companies that provide goods and services that people want, he would pick the latter every time. Yes, Buffett owns P&C insurers, but he owns them because they provide a service that people want (insuring practial, useful items such as their cars, homes, etc.), he collects the premiums or "float" up front, and can use this money he receives interest-free to make more money while keeping the reserve requirements for payouts aside. Plus, even when they have to pay out money to clients, it's usually a ways down the road. He doesn't have to wait and hope that eventually people will run to gold before he makes money. He also has good managers at each wholly-owned insurance subsidiary who know the business and how to mitigate risk). Now, gold could explode in price, Sandstorm's gold streams could generate big earnings provided the companies they cut streaming contracts with produce the gold they are expected to without needed without running out of cash to do it and Sandstorm gets the number of ounces they expect. Having said that, I think gold streaming is a pretty good business and I (along with Buffett) prefer gold vs. cash. Just saying that companies that make things or provide services that people will want regardless of what the means of exchange is are ongoing earnings and dividend generators with tangible fixed assets (plant, equipment, supplies, land, inventory, etc.) - most of what a business owns is not in cash. Also, when did most people buy gold bullion or gold mining stocks? Was it in 2001 at the start of the current bull run? 2005? 2008? 2012? As I see it, owning great companies that increase dividends and generate earnings growth have products and services that are in demand and will continue to be in demand no matter what the means of exchange is. Plus, I'm assuming all gold bugs currently hold a significant amount of cash themselves (C$ or US$) - what do you buy your groceries, cars, gasoline, clothes, electricity, vacations, pay for university studies, etc. with?