NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.Among his posts this week, Kass discussed the implications of the latest inflation data, revealed a change in his strategy on bank stocks and wrote that the bull market in gold is over, at least for a while. Please
If You Don't Eat or Drive, Inflation Is Low
Originally published on Friday, March 16 at 9:30 a.m. EDT.
Originally published on Friday, March 16 at 12:43 p.m. EDT.
Originally published on Friday, March 16 at 7:39 a.m. EST.
The second major category of investments involves assets that will never produce anything but that are purchased in the buyer's hope that someone else, who also knows that the assets will be forever unproductive, will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century....The revival in animal spirits has lifted most risk markets this month, with the exception of the gold market. Gold continued its free-fall overnight and is down another $12 per ounce. In theory, gold is a great asset class in a world of too much cowbell, where fear is a constant and the integrity of most currencies is waning (as an outgrowth of addressing fiscal imbalances with monetary solutions). As I once wrote about gold, however, there is no way to calculate intrinsic value. When it drops by $100 or $200 per ounce, an investor has little bearing as to whether the precious metal is cheap and at what price level it provides intrinsic value.
This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce -- it will remain lifeless forever -- but rather by the belief that others will desire it even more avidly in the future....
The major asset in this category is gold, 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.
-- Warren Buffett, 2012 Berkshire Hathaway Letter