Watch Intro Series

The Truth About Gold – Episode 23

How Do I Get a Podcast?

A Podcast is a like a radio/TV show but can be accessed via the internet any time you want. There are two ways to can get the Dentist Money Show.

  1. Watch/listen to it on our website via a web browser (Safari or Chrome) on your mobile device by visiting our podcast page.
  2. Download it automatically to your phone or tablet each week using one of the following apps.
    • For iPhones or iPads, use the Apple Podcasts app. You can get this app via the App Store (it comes pre-installed on newer devices). Once installed just search for "Dentist Money" and then click the "subscribe" button.
    • For Android phones and tablets, we suggest using the Stitcher app. You can get this app by visiting the Google Play Store. Once installed, search for "Dentist Money" and then click the plus icon (+) to add it to your favorites list.

If you need any help, feel free to contact us for support.

According to a recent article in Bloomberg magazine, gold prices have rallied and investors are piling back into gold in droves. On the heels of a four-year price decline, gold seems to have regained its luster and many are enticed by the prospect of striking it rich. But do they know what’s under the surface of all the media hype? In this episode of Dentist Money™, Reese & Ryan provide some valuable nuggets of wisdom about investing in gold.

Podcast Transcript:

Speaker: Consult an advisor or conduct your own due diligence when making financial decisions. General principles discusses during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money, now here’s your host, Reese Harper.

Reese Harper: Welcome to the Dentist Money Show where we help dentists make smart financial decisions. I’m your host, Reese Harper, here with my cohost, Sir Ryan Isaac.

Ryan Isaac: Hey Reese, are you ready to talk about gold today.

Reese Harper: I’m always ready to about gold Ryan. It’s my favorite precious metal.

Ryan Isaac: Above diamonds?

Reese Harper: Is that a metal?

Ryan Isaac: No, I don’t know.

Reese Harper: Precious metal is not a diamond.

Ryan Isaac: It’s a very precious commodity. Just seems like I would’ve picked that one. Well it’s a hot topic right now so that’s good we picked it. There’s something about gold that just it gets people excited.

Reese Harper: It’s the universal symbol of wealth. That’s what you get when you conquest territories, mine, dig up the earth.

Ryan Isaac: That’s why I have a gold chain on right now.

Reese Harper: Yep, people really worship the stuff, literally. You may not know that.

Ryan Isaac: Is that a biblical reference? Like golden calf. We going there?

Reese Harper: No.

Ryan Isaac: Okay.

Reese Harper: You might want to go back into history but I’m not going that far.

Ryan Isaac: Okay, yeah, we don’t want to go that far. I thought we’d talk about, we can go a little bit further back in history, not that far.

Reese Harper: Let’s do it.

Ryan Isaac: California gold rush, let’s talk about that for a second because I think that’s a good example of the influence gold can have on people.

Reese Harper: Yeah, I think it’s time we dive into a little bit of a history lesson here Ry.

Ryan Isaac: In 1848, a carpenter named James Marshall was building a sawmill for a guy named John Sutter. You know old John Sutter.

Reese Harper: Yep. Old man Sutter.

Ryan Isaac: Old man Sutter. And he, so he found flakes of gold in a river at the base of the Sierra Nevada mountains. Sutter, he wanted to keep it a secret but he couldn’t. The word got out and people from all over the world started getting gold fever, as they call it in the business and moving to California.

Reese Harper: I kind of have it right now.

Ryan Isaac: You have gold fever.

Reese Harper: Yep.

Ryan Isaac: Maybe that’s the title of the podcast.

Reese Harper: Gold fever.

Ryan Isaac: I love gold, it’s a quote of Gold Member.

Reese Harper: I think it was a pretty big migration, right?

Ryan Isaac: It was big yeah. At the time, California’s population was about 160,000. By the mid 1850s it was tripled. It had tripled to more than 450,000 people. So yeah, the largest.

Reese Harper: And now there’s more people than that in Long Beach.

Ryan Isaac: Probably more. And there were plenty of success stories though. A lot of people actually did get rich. There was about $2 billion worth of gold extracted from the ground during the gold rush.

Reese Harper: Wow, that’s a lot of gold. That’s a lot of nuggets.

Ryan Isaac: That’s a lot of nuggets.

Reese Harper: How many pounds would that be?

Ryan Isaac: I knew you were going to ask that. I have the information right here. It was actually about 750,000 pounds of gold.

Reese Harper: Interesting.

Ryan Isaac: The interesting part about this story though was it wasn’t necessarily just the miners who made the money. It wasn’t even the miners who made the most money, it was actually the merchants who opened up businesses in the area to serve the miners. Some famous businessmen actually got their start by supplying goods and services and supplies to gold miners. Couple examples, because I know you’re curious, you want to know.

Reese Harper: I was going to ask a couple questions but you’re going to supply examples. I won’t ask them.

Ryan Isaac: Examples forthcoming. John Studebaker, well known for his automobiles. You had a Studebaker, didn’t you in college.

Reese Harper: Um-hmm. Those were extinct by the time I was born.

Ryan Isaac: He got a start, he manufactured wheelbarrows for the miners. You had a couple of gentlemen by the names of Henry Wells and William Fargo. They moved to San Francisco to open a bank called Wells Fargo.

Reese Harper: Yeah, I remember that.

Ryan Isaac: There was a guy name Levi Strauss.

Reese Harper: He made hot dogs.

Ryan Isaac: You know what he made. He made hot dog. He moved to San Francisco as people do now too, where they always used to go.

Reese Harper: Dude, everyone goes to Silicon Valley. It’s the valley.

Ryan Isaac: It used to be that way a 100 years ago.

Reese Harper: He went to sell canvas tarps or something.

Ryan Isaac: Yeah, he started canvas tarps and wagon covers and then eventually started making denim jeans which we know today as Levis.

Reese Harper: Which are making a comeback.

Ryan Isaac: Are they?

Reese Harper: They were kind of dead and now they’re really making a comeback.

Ryan Isaac: You’re a Wrangler guy.

Reese Harper: Nope, I’m not. I’m a pretend cowboy but I’m not really one.

Ryan Isaac: If you’re pretend, I don’t know what leaves me man. Anyway, anyway, so the reason for this history lesson though is because we’re seeing another gold rush take place kind of as we speak.

Reese Harper: That’s right. I saw a Bloomberg article this month and the headline said, “Investors are piling back into gold.” I think it was they’re piling back into gold in droves or with droves or something like that.

Ryan Isaac: Masses and droves. Everybody.

Reese Harper: It really was exciting.

Ryan Isaac: I’ve noticed, you see more advertisements on TV and billboards and that’s kind of your signal right there that it might be on the move.

Reese Harper: Any time you want to make a good investment decision just base it on the daily TV commercial volume that you see. Not really folks. Don’t quote me on that, okay. That was a joke. Subtle humor.

Ryan Isaac: Subtle humor, there was a facial expression to go along with the sarcasm.

Reese Harper: You couldn’t see it.

Ryan Isaac: It indicated it was a joke. But we do probably have though a lot of listeners who are wondering whether gold right now is a viable investment option. Maybe wondering if it’s time to jump on the bandwagon or in some people’s minds just diversify a little bit.

Reese Harper: It’s interesting to see gold making its way back into the news. Reminds me of 2011 when gold prices hit their peak. Gold was about 1,900 an ounce in 2011, the peak there and then it took a little bit of a nosedive. By a little bit I mean, it went down a lot. Went down to less than 1,100 an ounce by 2015. But over the last few months we’ve seen that number get closer to 1,300 an ounce and so people are starting to wonder if gold’s on its way back.

Ryan Isaac: Yeah, I can remember you talking to me about all the gold requests that we had during 2011. It was an unusually high demand period. I can’t actually believe that it’s been five years since then.

Reese Harper: Totally. The Bloomberg article talks about how prices of gold have rallied 22% this year which seems really good but I’m going to go on a little rant here that you might not want me to go on but let’s do this.

Ryan Isaac: No, no, no. I want you to go on a rant. Is this is an official segment now? The Reese Harper rant segment?

Reese Harper: Need to have the producers play the bell or some kind of of a horn.

Ryan Isaac: Maybe a deep foghorn.

Reese Harper: Cue rant. Here’s the thing. If you read something that says something’s gone up by a certain percentage, especially the idea that gold’s rallied 22%, that might be a little overzealous. Returns get pretty deceptive if you take them at face value because as everyone knows this but you have kind of do the math to think about it which is, it takes a lot more return going up than you think to get back to where you were.
If you have a $100 and it goes down 50%, then you’re going to have how much Ryan?

Ryan Isaac: I got 10B2 out here, punching the numbers, carry the three, you’re down to 50.

Reese Harper: Yep. But if you have a 50% gain right after that, to offset your 50% loss, then where you at?

Ryan Isaac: 50% gain on 50 bucks gets you only back up to $75.

Reese Harper: Exactly. Anytime you have a loss, you have to have a much larger gain to recover the asset’s value. In the case of gold, let’s just use round numbers and say we went from 1,900 an ounce in 2011 to 1,100 an ounce in 2015. That’s a 42% drop ish.

Ryan Isaac: Yeah, but 42%, that’s not going to get you back to 1,900 spot.

Reese Harper: No, you’d need to gain somewhere in the 70 to 75% range to get back to where it was. All I’m saying is if you’re going to call it a rally, make sure and keep it in perspective. I think I’m going to say one other thing. It might be four or five other things.

Ryan Isaac: Four or five. Okay, the rant continues. Go on.

Reese Harper: It’s really interesting too to watch how investors want to buy gold at peaks. Your buddy William Devane, do you know him?

Ryan Isaac: William Devane, yes.

Reese Harper: He gets on primetime TV. Got this really slow trustworthy drawl. Talks about the crooked government with printed money, phony and somehow it seems like gold is the only solution to protecting our country’s future. There’s bombs going off, it’s insane.

Ryan Isaac: I was going to ask William Devane but I think I’ve seen him somewhere before, haven’t I?

Reese Harper: Yeah, he’s on, you ever watch 24? Jack Bower.

Ryan Isaac: I think I saw eight of the 24 hours. His daughter just kept getting kidnapped over and over and over again.

Reese Harper: It gets better.

Ryan Isaac: I thought, come on man.

Reese Harper: That’s season one.

Ryan Isaac: There’s a way around this.

Reese Harper: True Jack Bower disciples followed him clear through eight or nine seasons.

Ryan Isaac: I’ll go back to it.

Reese Harper: Anyway, William Devane was the president of the United States in the last season of 24. He’s endlessly defending the integrity of the US government. It’s currency, he’s all things libertarian, political. He’s a man of his word.

Ryan Isaac: It’s kind of ironic now that he went from that to what he’s doing. I actually, I saw this and then I had to go Google the commercial. You were just saying this, there was a scene where he’s political unrest and it shows wars and fighting and there’s these bombing sound effects going on.

Reese Harper: From cannons from the 1700s.

Ryan Isaac: And then my other favorite part besides the fact that he’s in front of a crackling fire and it looks very comfortable, is that he’s counting the coins on his desk and it zooms in close up shot to his hands. He’s like, “I even love touching and the feel of gold.” It’s very personal. I trusted him on that though.

Reese Harper: For those of you who haven’t watched it, go watch the commercial. Google William Devane and check out.

Ryan Isaac: Gold commercial, you’ll see it.

Reese Harper: Gold commercial for Rosland Capital. That was a sweet one.

Ryan Isaac: Yeah, that’s it. That’s it.

Reese Harper: Somehow Ryan’s going to get in trouble for having me drop that. Rosland Capital.

Ryan Isaac: We’ll edit it if needs be.

Reese Harper: I’m not saying it’s bad, I’m just saying it’s really over hyped. When you’re, it’s funny though, he was the leader of the free world, getting paid to support the country but then six months later he gets paid to tell everyone what a scam it was.

Ryan Isaac: How bad the world is.

Reese Harper: The government’s ending.

Ryan Isaac: Okay, on a serious note then, what do people need to know about gold? It’s not all bad, is it?

Reese Harper: No.

Ryan Isaac: You seem like you’re really hating it. It kind of makes me want to pick up some for myself now. The old contrarian play.

Reese Harper: You would. You’d go buy it right now.

Ryan Isaac: You don’t like it so I’m like fine, I’m going to get some.

Reese Harper: Here’s the thing, that’s one of the facts about gold. When you have a lot of economic problems, turmoil, whether it’s perceived or whether it’s real, gold tends to go up in value. On the other hand, when we have good economic periods where we have expansion or a healthy economy, gold tends to decline in value. The most recently sided benefits that you’ll hear old Rosland Capital throw out in their article or their online guide or their book about gold you can get for free and then buy some, they’ll talk about it has a strong long term return. Gold’s going to go up really a long ways over time. It provides a good hedge against inflation and it is like a safe haven during turbulent times. It’s not correlated with your other assets. It doesn’t move in the same direction as some of the other things you own. It’s a hedge against inflation, it’s not correlated to other assets and it gives you nice long term return.
But if you dig into the numbers a little bit more you’ll see that all these benefits aren’t quite as consistent as they’re advertised.

Ryan Isaac: I’m assuming you’re going to list the benefits but I’m just going to disclaimer, I’m not convinced still and I kind of still want to listen to him because here’s the other thing I forgot to mention I loved about that commercial, is at the end they stole a line from Capital One and he put, locks it in his safe behind the picture I think of George Washington or something and he’s like, “What’s in your safe?”

Reese Harper: Yeah, I saw that.

Ryan Isaac: There just something about that and the cowboy hat and a gold IRA that just feels right, especially after all that warfare and bombing noises. What are the, what benefits does he have?

Reese Harper: What safe are you going to get? That’s my question. If you end up going to get the gold and you’re going to get the safe.

Ryan Isaac: It was a small safe. It looked like maybe 30 gold coins.

Reese Harper: Let’s start with the first claim, gold provides a solid long term return. You’ve probably heard the word, the gold standard. You ever heard that?

Ryan Isaac: Yes. You referred me as the gold standard usually.

Reese Harper: Yeah, usually. But most people really don’t know what that means outside of your fan club. The US dollar used to equal the value of a certain quantity of gold. It was like 1.6 ounces or something like that. 1.62. It was in the 1700s, they started pegging the value of a dollar to the actual ounce of gold that it represented and it stuck with it over a really long period of time. You could actually pay for stuff with a few ounces of gold or with dollars. You could just decide.

Ryan Isaac: What if you had a brick? Do you just go to the cashier at the grocery store and shave off a couple peelings?

Reese Harper: Yes, we’ll talk about that. What happened though is over a long period of time, it’s really hard to do trade with other countries if some countries aren’t on the gold standard and you are. Economies, once we get as big as they are now, it’s really hard to have everyone be stuck to the gold standard because gold’s worth a lot and not, and things still cost smaller amounts of dollars. It just gets really complex.
The gold standard persisted til 1971. In 1971, President Nixon said, “We’re not going to do it anymore. We’re off the gold standard.” That’s the first time when you could’ve ever even started measuring the difference between how much gold went up compared to how much a dollar bill went up. That’s when it kind of started.

Ryan Isaac: That’s interesting. But back to my question, I’m kind of fascinated by this. People would actually exchange gold ore currency?

Reese Harper: Yeah, you could pay for …

Ryan Isaac: For a loaf of bread.

Reese Harper: You could pay for stuff back in the day with gold coins and different levels, different types of gold coins had different amounts of real gold in them so different coins bought different amounts of goods.

Ryan Isaac: It went off in 1971 though and then they set a price.

Reese Harper: They said it’s $38 an ounce for gold now. From then, the government started letting the price of gold kind of float around and trade. It was independent from the dollar. For a while, people from I don’t know how much of a history lesson people are going to want so I’ll make this brief but from 1933 til 1975, you couldn’t even buy gold. You couldn’t own it. The government wouldn’t allow families to have gold on hand. You could have small quantities because you wouldn’t really get audited but it was illegal to amass gold until 1975 which he said, “Okay consumers can have it and buy it and trade it now.”
What happened is when the gold standard stopped in 1971, we went on for a long period of time where gold and dollars started having different values. People that sell gold like your buddy at Rosland Capital with his cowboy hat, that’s when they’ll start saying, “Look how gold has done relative to the dollar.” Because that’s when you could start pegging its price.

Ryan Isaac: Ever since 71. What has the price of gold done then historically since then?

Reese Harper: Well since there’s been really two high return periods. The 70s and then in the 2000s. Mostly because those are really highly stressful financial periods. The 70s, you had a lot of wars, you had a bunch of really severe bear market, 1973, you had the two global oil shocks in 73 and 79. You had conflicts in the Middle East, you had Cold War tensions. It was a really crazy period in the 70s. And then gold actually went up quite a bit in the 70s but you couldn’t even own gold from 1971 to 1975, it wasn’t legal. People really couldn’t have owned it until 1975 so from 75 to the end of 79, it went up quite a bit if you were lucky enough to buy it at that point.
And then in the 2000s it went up a lot. We had another period kind of like the 70s where you had …

Ryan Isaac: Yeah, sounds just like it.

Reese Harper: It was a really messy period. You can probably remember some of the things that happened in the 2000s.

Ryan Isaac: It’s funny as you list the things that happened in the 70s, this reminds me of the conversations we have a lot where people say it’s different this time. It’s political turmoil, commodity prices.

Reese Harper: Several major wars.

Ryan Isaac: Bear markets, wars.

Reese Harper: You had a huge stock market crash with the tech bubble. You had a financial crisis, a real estate bubble, you had 9/11, you had global jihad and terrorism. It was crazy.

Ryan Isaac: What about my childhood, my glory days of the 80s and 90s?

Reese Harper: Gold during the 80s and 90s was, it was one of worst, it’s the worst performing period it’s ever had. All through the 80s and 90s if you look over 20 years, it lost over 6% a year for 20 years.

Ryan Isaac: Lost 6 over 20 years.

Reese Harper: Over six, I think it was like 6.2. for 20 years straight, you lost money and during that same time, a lot of other assets went up a lot like United States stocks went up 13.3% annually over that 20 year period. It’s a huge contrast. From a long term perspective, if you compare gold from 1971 clear until now, especially today where it’s not on its peak. It peaked in 2011, and it’s down quite a bit since then still. It hasn’t really performed as well as a lot of other investments, especially US stocks over that period. Over short isolated periods, you could say that gold has gone up really quickly.

Ryan Isaac: Or appreciated fast.

Reese Harper: Yeah, it’s appreciated quickly when there’s a lot of stress or economic problems. Anyway, it’s appreciation though is really unpredictable and it’s isolated to periods when people really want it bad and there’s a high demand. Investors who try to time the movement of when that’s going to happen, expose their money to a lot higher risk and the opportunity cost of missing out on growth in other asset classes.

Ryan Isaac: One of the other reasons you mentioned was inflation hedge. What about an inflation hedge? How does gold help or not help with that.

Reese Harper: Yeah, depends on the time period you look at. But over a long, let’s say take 1980 to 2011, if you take it from its peak which I’m giving it a huge advantage by giving it its peak value of 1,900 an ounce because the end of 2011 compared to right now, still we’re down 30 something percent. But if you take it from 1980 to 2011, it was gold, a dollar of gold in 1980 would have been worth about the same as what it is today. It’s a $1.04 and it was worth a dollar then.
No inflation protection over that period of time.

Ryan Isaac: No hedge.

Reese Harper: If you isolate it over short, short periods like the late 70s, or just in the 2000s it looks pretty good but when you take 1980 and 90s into account, it’s not really a good inflation hedge.

Ryan Isaac: After all you just mentioned, what are saying? Are you saying I should buy gold?

Reese Harper: Yes. Exactly. No. How many people in 2011 do you think listened to your buddy at Rosland Capital or Glen Beck.

Ryan Isaac: My other buddy.

Reese Harper: Or however many people and just followed gold off the cliff in 2011? Everyone piles up all their money in gold, right after this massive period of gold appreciation and then it falls off a cliff and a lot of people that are listening to these commercials aren’t young, high earning career people. They’re people at the end of their career. They’re really fearful that’s why the buddy William.

Ryan Isaac: He has an appeal.

Reese Harper: Yeah, he has an appeal, a demographic appeal. I just feel like a lot of people followed that advice and they look at this guy that’s pretending to be the president of the United States in 24 and he then fronts Rosland Capital and we’re not really sure why we’re doing this. We’re just buying gold because we feel good about it and emotionally we get excited. I don’t know, I just wonder at some point when someone at the bottom of an economic collapse is sitting there and they’ve got all their money converted to gold and they’re wondering, what are they going to do? Because the world’s over at this point.

Ryan Isaac: Let’s say we’re neighbors, you’re that guy in your bunker with gold and I’ve got some bread and water next door.

Reese Harper: The world’s totally done. You have all your gold. I have my worthless dollars that are now trading for nothing and no one really wants to take them. No one’s taking gold shavings and no one’s accepting dollars. Gold wasn’t worth anything when there was no currency. The end of the day when there isn’t any food to buy and your baker’s out of business and everyone’s not selling anything and you’ve got gold and I have worthless dollars, there’s not really a difference. I just feel like the most likely outcome of what’s going to happen when there is a crisis is, dollars are going to be worth less and inflation will pick up and it’s harder to buy things. A loaf of bread might cost six bucks instead of four. Mine already does cost six bucks because I buy I that good bread.

Ryan Isaac: You buy the good with all the seeds on it.

Reese Harper: Things will cost more and if you have currency, if you have liquid cash, if you have money that you can actually use instead of going to the store and shaving off an edge of your gold coin to buy that loaf of bread, you’ll be able to function. And the more cash you have, the longer you can last through not just cash but the more currency that you have, the more you’ll be able to last through tough economic periods. And when you convert everything into hard assets it’s just hard to survive. I just don’t know why people feel like that’s such a safe haven but anyway.

Ryan Isaac: Well let’s revisit the idea then from our gold rush story in the beginning about the people who ended up profiting the most from the gold rush. In the California rush it was all the bankers, hotel owners, equipment suppliers, who came out ahead the most. When we see these spikes in gold and investors start flocking, who’s the real beneficiary?

Reese Harper: I guess if it’s possible if you timed it right, investors could profit the most. It’s just like if you’re a gold prospector in California and you got there really early and started mining on the right little beach of little sand there, you probably struck it rich and made tons of money. But generally, it’s really hard to time the gold market just like any other asset and I wouldn’t recommend doing that. At the end of the day, most of the time, other people are the people that profit off of your transactions. When you buy gold, more people make money transacting gold than the people that own it. That’s something to consider over a short period of time.
Long term, it’s not like it doesn’t depreciate, it’s just not the boon of safety, inflation hedging and long term growth that everyone feels like it is when they buy it. It’s the brokers, the salespeople, the corporations, they make a lot of money just like Levi Strauss did in the gold rush days.

Ryan Isaac: The guy in front of the crackling fire, he’s going to be okay as a result of me investing heavily.

Reese Harper: Totally.

Ryan Isaac: We’re not saying avoid gold as an investment. Don’t avoid it, it’s not a scam, you’re saying.

Reese Harper: Yeah, if you want to invest in gold, I’m going to give you a couple pieces of advice. Don’t place any big bets. Don’t take a large portion of your portfolio and allocate it to gold. I wouldn’t put more than 5% of my portfolio in precious metals or commodities, let alone gold. That’s about the maximum of what exposure I’d want to have. And that’s if you’re a 100% stock investor. If you are wanting a safe experience, gold isn’t an asset class that’s going to give you a meaningful trade off. It’s not going to meaningfully increase your diversification. It’s not going to offer you a higher expected return. I don’t view gold as a way to make profits over the long term based on the risk profile it has. It just goes up and down too much and it’s really unpredictable as an investment. It also doesn’t give you anything back. You just have to hold it. There’s no dividends, there’s no income, it doesn’t produce anything. It’s just a, it’s a good store of value but it’s really unpredictable in terms of when that store of value is going to appreciate.

Ryan Isaac: Don’t go try to time it. It’s not worth the risk trying to time it.

Reese Harper: Yeah.

Ryan Isaac: Okay.

Reese Harper: And it doesn’t provide diversification, like we were saying in the beginning, you got long term returns, they’re not there. The inflation hedge isn’t there. I just think that those things are the reason people own it.

Ryan Isaac: The message we always want to share with dentists is that we say this all the time. You don’t need to strike it rich with a lucky investment. You don’t need to hit that home run. You’re in a great position to build wealth responsibly over time, stay diversified, let the market play itself out, don’t get caught up in all the buzz over the investment of the week or the best commercial you just saw or the talk show guy pitching it, right?

Reese Harper: Yeah. I love this quote from, this is my favorite gold quote and it’s from Warren Buffet in his 2012 letter to shareholders. He says, “Today the world’s gold stock is about 170,000 metric tonnes, if it were all melded together, it would form a cube of about 68 feet per side,” which fits inside of a baseball field basically for people don’t, can’t envision that. “At 1,750 per ounce,” which a lot higher than it is today, he was writing this quote in 2012 and it was a lot, today we’re sub 1,300. “At 1,750 per ounce, it would be worth $9.6 trillion.”
That’s a lot of value but he says, “With the same amount of money, you could buy all US cropland. That’s every farm in the whole country. Which is 400 million acres with an output of $200 billion annually. You could also buy Exxon Mobile, 16 times,” you could buy 16 Exxon Mobiles, which is the world’s most profitable company. “It earns more than $40 billion a year. And you’d still have a trillion dollars in cash.”
You kind of have to look at that and go, would I rather own every farm in the whole country plus the most profitable company in the country?

Ryan Isaac: 16 times over.

Reese Harper: That’s selling things that people need to consume, 16 times over, making a profit, providing me with an income or do I want to own something, a teeny teeny piece of something that can fit within a professional baseball field’s infield?
I don’t know, for me, I prefer investing in things that give me something back and so does Mr. Buffet and in my experience, most successful investors feel the same way.

Ryan Isaac: Although I do have to say if you did have a 68 foot long piece of gold, it would look pretty cool in a front yard or something if we’re being honest. Let’s leave our listeners then with a famous poem, as we always do about gold, penned by Robert Frost.

Reese Harper: Yes, and it was immortalized by Pony Boy in the classic story of The Outsiders.

Ryan Isaac: This is for those of you who wonder if gold has staying power as an investment strategy. Here’s the poem:

Nature’s first green is gold,
Her hardest hue to hold.
Her early leafs a flower;
But only so an hour.
Then leaf subsides to leaf.
So Eden sank to grief,
So dawn goes down to day.
Nothing gold can stay.

Reese Harper: That’s beautiful Ry.

Ryan Isaac: It’s a good reading. I do that on weekends in coffee shops.

Reese Harper: Thank you for that beautiful reading.

Ryan Isaac: With that, let’s call it a show. Thanks to all of our listeners for joining us. Remember to leave us a review on this podcast on iTunes. For more information you can follow us on Facebook. You can go to the website You can sign up for our free newsletter or schedule an appointment on our calendar. We also have our phone number on the website, give us a call any time, we’d be happy to chat.

Reese Harper: Carry on.


Get Our Latest Content

Sign-up to receive email notifications when we publish new articles, podcasts, courses, eGuides, and videos in our education library.

Subscribe Now

Related Resources