In the gold mining space, Barrick Gold (TSX:ABX)(NYSE:GOLD) has been a top pick of mine for a number of reasons. My opinion on this company has not changed. Rather my opinion has been taken to another level due to some very interesting and pertinent recent news which has come in.
Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.B) has recently announced a stake in Barrick Gold. Around the same time, the "Oracle of Omaha" also announced a reduction in his investment in large U.S. banks. These moves are very bearish and signal a lack of confidence form one of the most successful investors of all time, in this current market rally. The move into gold is also an uncharacteristic one for Buffett. Gold as an investment has never suited his fancy in the past, mainly due to the unproductive nature of precious metals in general.
Barrick Gold has remained the largest gold producer in the world for some time by certain metrics and is one of the safest choices for investors in this sector. Gold, silver and other precious metals have been on a very nice rally in recent months. It appears that investors like Buffett not only believe in this rally but also believe gold producers such as Barrick are undervalued relative to their widening profit margins related to the price of gold.
For those who are still on the fence regarding gold, I suggest following Buffett and adding at least a small position at this point in time.
Invest wisely, my friends.
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