Warren Buffett may be in a slump, with Berkshire Hathaway continuing to underperform the S&P 500 Composite Index, but he’s still the greatest investor of all-time. Those who stand by his side, I believe, will be the ones that will ultimately come out on top over the long term. Remember, if you’ve got a track record as extensive as that of the Oracle of Omaha, you’re bound to run into periods of underperformance. And it’s typically when the skeptics deem the man has lost his investment edge when it’s the best time to place a contrarian bet on Buffett and company while shares are discounted.
While there’s no telling when Buffett and his firm will start pulling ahead of the broader markets in terms of performance, I do think Berkshire shareholders and Buffett disciples can appreciate the man’s patience at the age of 90 and his willingness to adapt with the times.
Had Warren Buffett been reluctant to change his tune on tech and not adapt with the times, Apple, one of Berkshire’s most rewarding bets in recent years, probably wouldn’t have happened, and Berkshire’s performance would likely have been far worse.
Warren Buffett goes for gold
Warren Buffett is still a value investor at heart. But he’s still willing to keep an open mind with growthier or non-traditional ideas that his associates throw his way. One of the biggest shockers from last year was Berkshire’s bet on gold miner Barrick Gold (TSX:ABX)(NYSE:GOLD). Though Buffett was never a gold fan, his willingness to warm up to the shiny yellow metal speaks highly of the trust he puts in his successors and his willingness to continue evolving his timeless strategy.
Heck, Warren Buffett used to be a cigar-butt investor before his right-hand man Charlie Munger nudged him to raise the quality bar with the businesses he hunted down. With Ted Weschler and Todd Combs (Ted and Todd) poised to take the reins, Buffett is more than willing to further adjust his investment strategy.
This piece will have a look at one of Warren Buffett’s most head-scratching Canadian bets in Barrick Gold to get an idea of why the man may have changed his tune on the yellow metal he’s slammed in the past.
A golden opportunity for dividend growth investors?
I would never have thought Warren Buffett would have given in and invested in a gold miner. But unprecedented times truly call for unprecedented action, as I’ve noted in numerous prior pieces.
With interest rates at the floor, bonds are the least attractive they’ve been in recent memory. On the flip side, the gold miners, which are a levered way to play gold prices, are starting to look compelling with their growing dividends.
If a past gold skeptic like Warren Buffett is willing to change his tune on gold and gold miners, you should probably take note of a potential changing of the tides.
With gold continues roaring, the top-tier miners like Barrick Gold will find themselves gushing with ridiculous sums of cash. A big chunk of the cash will be going straight into the pockets of shareholders through fast-and-furious dividend hikes, which just weren’t possible when gold prices were in the gutter.
So, in addition to all the inflation and volatility hedging benefits of holding gold (miner) stocks, you’ll be getting a pretty attractive dividend policy with Barrick. Could the big gold miners be the next big dividend growth stocks over the next 20 years? I certainly wouldn’t rule it out, as gold prices look to make a move higher into the latter half.
