The financial world was shocked when Berkshire Hathaway manager Warren Buffett abandoned Goldman Sachs shares and turned to gold stocks. Whether Warren Buffett, one of the richest names in the world, is now a gold investor is a big wonder.
Billionaire investor Warren Buffett has sold shares of several banks in his hands in recent months and instead purchased more than 20 million shares from Barrick Gold Corporation, the world’s second largest gold miner, with a total value of $ 563.5 million.
There are actually 2 simple reasons why this move attracts the market’s attention. The first of these reasons is Buffett’s statements about gold in the past. The investor stated in the past that he did not find it reasonable to invest in gold because gold is not a wide range of uses. Buffet warned gold investors by emphasizing that investing in gold does not involve an active productivity like a farm or a company. Consequently, it did not go unnoticed that he invested in a gold company, although not directly in the mine.
Another reason is the strong rise in the shares of Barrick Gold company after Buffett’s company Berkshire Hathaway’s move. Barrick Gold shares gained 45% overall this year. On the other hand, gold has increased its value by 30% since the beginning of the year.
This Move Can Lead The Sector To Gold
Euro Pacific Capital’s CEO and analyst Peter Schiff said on his social media account that Buffett’s decision to buy shares from Barrick Gold is a move that will legitimize the industry in the eyes of the main portfolio managers. In fact, with this investment made by Buffett, who thought that gold was not an active area of use in his time, now more large investors in the market can give a green light to this mine.
What is Barrick Gold Corporation?
Buffett's decision to buy Barrick #Gold will legitimize the sector in the eyes of mainstream portfolio managers, who now have the green light to follow Buffet's lead without being criticized by their peers or fired if their outside the mainstream "risky" bet fails to pay off.
— Peter Schiff (@PeterSchiff) August 15, 2020
Barrick Gold is a Canadian gold and copper mining company. Barrick Gold conducts its activities internationally, from 13 countries and 16 sites. To have a large-scale mining network from the USA to the Dominican Republic, from Saudi Arabia to Zambia. The company is expected to mine 4.6 – 5 million ounces of gold and close to 500 million pounds of copper in 2020.
Barrick Gold’s company shares were valued at $ 18 earlier this year. The fall that affected many markets around the world in March also affected Barrick Gold, and the company’s share price dropped to $ 16. But Barrick Gold began to grow rapidly in the following weeks. Barrick Gold stock, which sold almost $ 30 last week, is currently valued at $ 27.