Berkshire Hathaway Inc. (BRK.A), The Coca-Cola Company (KO): Why Warren Buffett Hates Gold

“I believe that over any extended period of time this category of investing will prove to be the runaway winner… More important, it will be by far the safest.”

This last sentence is important. Investing in productive assets carries less risk.

That’s because, in the past, irrational exuberance has caused all sorts of nonproductive assets to suddenly skyrocket beyond any sane measure of intrinsic value. The run-up on the prices of tulips in the 17th century is one colorful example.

Action to Take — > In contrast to the “boom and bust” cycle seen in commodities like gold (or tulips), productive assets will never go “out of style,” as Buffett says.

After all, people will always need goods, consume food and require a home to live as they do now. In Buffett’s own words, “People will forever exchange what they produce for what others produce.”

P.S. — The Oracle of Omaha has nearly 20% of his fortune invested in The Coca-Cola Company (NYSE:KO). But did you know there’s another soda company that’s growing profits 12 times faster than Coke? And that it’s getting praised in the The New York Times, The Washington Post, and more? Get the name of this little-known stock that could threaten Coke and Pepsi now.

– Chad Tracy

Warren Buffett’s Top 5 Stocks

Buffett’s firm, Berkshire Hathaway, holds dozens of stocks. But these five make up 75% of its portfolio… worth $65 billion. Click here to get Buffett’s top 5 stocks plus his 16 latest buys, FREE.