Berkshire Hathaway Just Made a Big Bet on Gold

Considering how much gold has been moving this year, it is no surprise that Warren Buffett’s Berkshire Hathaway has added gold to its portfolio.

The company has added Barrick Gold Corp. to its profile during the second quarter and bought 20.9 million shares, or 1.2% of the company’s outstanding stock, with a current market value of $565 million, according to a regulatory filing this past Friday.

The filing shows moves made by Buffett or his two investing deputies, Todd Combs or Ted Weschler. The move is considered somewhat ironic considering that the Oracle of Omaha, Buffett, had been against investing in the metal in the past.

“I would rather trust in the intrinsic value of a bunch of really fine businesses run by good managers selling products that people like to buy and have liked to buy for a long time, and then exchanging their future efforts, the money that comes from their wages, for See’s Candy or Coca-Cola or whatever, than take some piece of metal that people dig out of the ground in South Africa and then put back in the ground at Fort Knox, you know, after transporting it and insuring it and everything else,” Buffett said at the company’s 2000 annual meeting.

“I would say that gold would be way down on my list as a store of value,” he said at the 2005 annual meeting. “I mean, I would prefer owning a hundred acres of land near here in Nebraska, or an apartment house, or an index fund.”

Paulson & Co., run by billionaire hedge-fund manager John Paulson, also added to its holdings in Barrick.

The new position in Barrick Gold ranks as the 22nd biggest investment in Berkshire Hathaway’s portfolio.

Gold has breached $2,000 an oz. this year.