RE:WISE WORDS of Charlie Munger Potadvisor, it's really amazing that, each time you post, you show us that you're even more ignorant about this sector and who invests in it than we thought.
When I initially read the above post by Potadvisor, I was going to let it go. But since he keeps on insulting anyone in here who has a different view of investing / not investing in TLG than his buy-and-hold until the end of 2024 strategy, I've reconsidered.
First of all, as was mentioned by another poster, Warren Buffett and the late Charlie Munger thought anyone who owned gold bulllion (which would include gold bullion mutual funds or ETFs) were fools. I agree with them re. owning the bullion itself.
My favourite Warren Buffett quotes on owning gold:
"If you took all the gold in the world, it would roughly make a cube 67 feet on a side. Now, for that same cube of gold, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States. For $7 trillion, you could have all the farmland in the United States plus about seven Exxon Mobils (XOM) plus have a trillion dollars of walking-around money left over. And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day or...call me crazy, but I’ll take the farmland and the Exxon Mobils."
"(Gold is) currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.”
“I have no views as to where the price of gold is headed, but the one thing I can tell you is it won’t do anything between now and then except look at you, whereas Coca-Cola (KO) will be making money, and it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage costs."
My favourite Charlie Munger quotes on owning gold (which are a little more, shall we say, "direct"):
"...civilized people don't buy gold - they invest in productive businesses"
"If you have the opportunities of Berkshire, investing in gold is dumb."
Now, what about investing in gold mining companies that sell the gold they produce to others instead of just holding on to it?
Well, the only gold company I know of that Buffett and Munger's Berkshire Hathaway ever invested in since they founded the company was purchasing shares of Barrick Gold in 2020, but it appears Berkshire broke its own rule of "buy and hold" in this case as they sold shares less than 9 months later. However, since Buffett and Munger had been slowly delegating investment decisions to a small number of potential successors who will run the company after they're gone, it may not have been either of them who made the decision to buy the Barrick shares.
Now for my personal views on investing in gold exploration / mining companies:
I believe the only area that can be highly profitable while minimizing risk is buying shares in junior gold exploration companies that only hold claims in the safest jurisdictions in the world (for me, that's Canada or the USA), are moving forward with plans to build their first mine after releasing a great feasibility study, and are approching the finish line in obtaining all needed financing / permitting / approvals / contractor and supplier agreements etc. and are about to start the actual building of the mine, then selling the shares around first pour. I believe this is the lowest risk strategy with high return potential while minimizing the chances of holding dead money waiting for the big spike in the share price. To me, these companies are trades, not "buy and hold" investments. Sure, the company could go on to be a very successful producer and eventually get bought out at a handsome premium, but I'm happy with a three or four bagger (or whatever return is produced) during this timeframe, then moving on instead of waiting / hoping the share price will take another big leg up at some future point.