Monday, May 14, 2012

A Message To Charlie Munger

Dear Chuck,

Your comments on gold deserve further review.  We understand that buying a share of Berkshire in the 1960's has been a good investment.  This is not a relevant benchmark to gold as the US was held to a fixed exchange standard of $35/oz for a portion of that period.

We feel that a fair comparison would be the last 5 years.  This period is more relevant as the average citizen does not have $30 billion in cash to cut deals like Berkshire.  In fact, we are facing negative real interest rates which forces us to shelter capital in a currency other than the one your bosses have high-jacked.  

Here is a 5 year chart comparing Berkshire to a paper gold ETF product.  Due to your deteriorating condition we should point out that the red line represents gold and the blue line is your stock price.

You also cleverly likened gold buyers to Holocaust era Jews.  This is not entirely off base.  Do you know what these Jews were facing at the time?  Survival was their foremost goal.  In markets today Chuck, we too are striving for survival.  Financial repression is not an easy investing environment.  We are attempting to preserve hard earned capital as we are not connected enough to participate in the bailout programs that you and Warren are privy to.

Finally, if memory serves us correctly your occupation is in the legal field?  Since you impossibly suggest that we should have purchased Berkshire in the 1960's maybe we should suggest you seek work as a lawyer today?  Due to your self-proclaimed "humble roots" upon exiting law school you would begin servicing a mountain of student loan debt.  Also, you better be sharp as there are 2 lawyers graduating for each job in the field today.

Remember Chuck, if you were not with Warren you would be supplementing an $800 per month Social Security check and facing Medicare cuts this November.   We suggest the following would be a suitable way for you to participate in the workforce today.


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