Why doesn’t Warren Buffett invest in gold?‎

The American billionaire, Warren Buffett, has been famous for his long-term investments in the stock markets since his childhood, but he does not invest in gold, and this does not mean that he does not favor precious metals, but rather he invests about a billion dollars in silver.

According to “CNBC,” Buffett explained his lack of preference for investing in gold and his extreme enthusiasm for silver that this stems from his basic principles regarding value investing. ‏

Buffett was frank and clear about his reluctance to invest in gold, because he simply sees the lack of value in gold. From his point of view, the lack of value results from the lack of interest. He once said of gold, “It does nothing but sit there and look at you.”

Value

Among Buffett’s basic principles in investing is that a person should invest in useful things that serve a specific purpose and provide real and practical needs for people.

When applying this principle to silver, Buffett sees in this metal the importance and uses for many medical and industrial purposes.

In medicine, for example, silver is used in bandages and catheters, as a healing agent for burns and other health conditions, and as a water purifier. ‏

In the electronic industries, silver is the best metal conductor of electricity and does not corrode, so it is widely used in wires and connecting parts, computers, mobile phones, cameras and even DVD disc packaging because it is scratch-resistant.

So, silver meets Buffett’s requirements to have a real and specific value. Indeed, from the point of view of the American investor, silver is uniquely suitable for a number of uses for which it operates as an industrial metal and it will be difficult to replace it with any alternative material.

As for gold, it does not meet Buffett’s requirements. Although it is used in some industrial applications, it can often be dispensed with.

Gold makes beautiful jewelry, but it is largely without practical uses in Buffett’s opinion. The metallic commodity that shines in his eyes is silver, not gold.