Remember when everybody was making fun of Warren Buffett for being on the sidelines while the stock market kept going up?
Berkshire Hathaway (BRK.B) had almost $400 billion sitting in cash and short-term government bonds.
And there was Buffett, with all that money while everybody else was having fun.
The jokes practically wrote themselves.
In 2025, Berkshire gained about 11%, while the S&P 500, the group of big American stocks everybody watches, gained about 17%.
By April of this year, Berkshire was down more than 7%, while the S&P 500 was up more than 4%.
The guy who built one of the greatest fortunes in history was suddenly gone.
But that’s actually when things started getting interesting.
While everybody was laughing, I was noticing that Berkshire was starting to do better than the rest of the market.
So we bought it. I wrote about that trade in May.
The stock was around $486, and the idea was simple: Berkshire had stopped going down while the market was starting to reward it again.
Then it led the market all summer.
From June through August, Berkshire gained more than 7%, while the S&P 500 barely gained 1%.
We made more than 200% on the Berkshire options trade. The common stock has been great, too, and I still own it.
Berkshire closed once again at its highest closing price of the year.
Since that May piece, Berkshire has gained almost 15%, while the S&P 500 is up less than 2%.
Remember all those jokes about Buffett missing the bull market?
Who’s laughing now?
Now Everybody’s Laughing at the Metals
Gold closed at a new 52-week low on Friday.
That’s right, gold, the thing everybody keeps telling us is supposed to protect our money when things get scary.
The SPDR Gold Shares (GLD), a fund that follows the price of gold, has fallen more than 28% from its January high.
If you put $100 into gold near that peak, you’d only have about $72 left.
Some safe haven.
And silver has been even worse.
The iShares Silver Trust (SLV), which follows silver prices, lost almost 58% of its value in just nine months.
Your $100 turned into about $42.
That’s not a little pullback. That’s a crash.
We’re talking about precious metals here. The stuff people have been telling us for generations is supposed to be safe.
There’s nothing safe about an asset that can lose almost three-fifths of its value in nine months.
It’s a risk asset, just like anything else.
And don’t even get me started on the inflation hedge argument.
People have been telling me my whole career that gold is supposed to protect us from inflation.
Well, gold just made a new 52-week low. Does that mean there’s no inflation anymore?
Personally, I don’t think one has anything to do with the other.
Gold is a rock. Sometimes the price of that rock goes up a lot, and sometimes it goes down a lot.
I don’t need it to be something it’s not.
If I can buy rocks and sell them later at higher prices, I’m all for it.
That’s the game I’m playing.
The Joke Might Be on the Other Side Again
We did great in precious metals last year, and we’ve stayed away for most of this year.
But now I’m starting to get interested again.
It’s not that I like gold. But we put on three gold trades on Wednesday.
Look at silver:
Back in 2011, silver reached roughly $50 before spending years below that level.
Earlier this year, it exploded all the way up near $121. Then, it came crashing right back down toward $50.
Now, it’s bounced back above $50, with silver futures trading around $52 on Wednesday.
That’s a pretty interesting place for buyers to show up.
The same area that marked the old highs more than a decade ago is where silver is trying to find its footing today.
I have no problem being long an asset that’s lost more than half its value this year.
Not because it’s cheap. Not because it’s supposed to be safe. And certainly not because somebody told me it’s an inflation hedge.
I like the risk-vs-reward here.
If silver can hold this area and start moving higher, there’s a lot of room for it to run.
And if the dollar starts falling, I think silver absolutely explodes higher.
We’ve seen this movie before.
Everybody was laughing at Berkshire when Buffett had all that cash and the stock was going nowhere.
We were buying it anyway, and the stock went on to lead the market all summer.
Now, everybody’s laughing at gold and silver because the supposedly safe investments have been getting crushed.
So, when everybody’s laughing at an asset, is the laughter the warning, or is it the setup?