The thesis
“If I had put $10,000 into gold in 2005 instead of stocks.”
How buffet read it
$10,000 invested in GLD (gold) on January 1, 2005.
Held with no changes through 2026.
Dividends reinvested where applicable.
Benchmark: S&P 500 (SPY) over the same period.
GLD · 5,448 trading days · benchmark SPY
$10,000 became
$0
The same money in the S&P 500 would have been $94,836 over 2005–2026 — the thesis came out ahead by $210.
The worst stretch
−45.6%, August 2011 to December 2015 — you would have sat through 52 months of that, and it took until July 2020 to get back to level.
the S&P 500 fell 55.2% at its worst over the same period. The thesis moved 18.3% a year against 18.9% for the index.
Where the thesis was wrong
Over 21.6 years, $10,000 in GLD ended at $95,046 (+850.5%), beating the S&P 500 by $210. That margin is thin enough to call it a draw at +11.0% a year on both sides. The thesis depended entirely on one asset with no income, and 2013 showed the cost of that: GLD fell −28.3% while the index returned +32.3%, a 60.6-point gap in a single year. The worst drawdown was −45.6%, lasting from August 2011 to December 2015, with a full recovery not arriving until July 2020.
Counter-test
Same money, same schedule, parked in 1–3 month T-bills instead: $13,102.
Year by year
| Year | The thesis | SPY |
|---|---|---|
| 2005 | +19.9% | +5.3% |
| 2006 | +22.5% | +15.8% |
| 2007 | +30.5% | +5.1% |
| 2008 | +4.9% | −36.8% |
| 2009 | +24.0% | +26.4% |
| 2010 | +29.3% | +15.1% |
| 2011 | +9.6% | +1.9% |
| 2012 | +6.6% | +16.0% |
| 2013 | −28.3% | +32.3% |
| 2014 | −2.2% | +13.5% |
| 2015 | −10.7% | +1.3% |
| 2016 | +8.0% | +12.0% |
| 2017 | +12.8% | +21.7% |
| 2018 | −1.9% | −4.6% |
| 2019 | +17.9% | +31.2% |
| 2020 | +24.8% | +18.4% |
| 2021 | −4.1% | +28.7% |
| 2022 | −0.8% | −18.2% |
| 2023 | +12.7% | +26.2% |
| 2024 | +26.7% | +24.9% |
| 2025 | +63.7% | +17.7% |
| 2026 | +3.2% | +13.4% |
What this verdict does not include
- US-listed stocks and ETFs only, priced on end-of-day closes.
- No tax, no trading fees, no slippage, no bid-ask spread.
- Dividends are reinvested, because closes are adjusted for them.
- Survivorship is not corrected for: only instruments that exist today are held.
- GLD launched in November 2004, so the 2005 start date is fully covered.
- Gold pays no dividends; the reinvestment note is not applicable here but is standard.
- SPY is used as the 'stocks' benchmark per the thesis comparison.
Keep this thesis
buffet re-runs it once a month and mails you the new number. Nothing else is ever sent.
Another thesis
Every verdict names something it could not test. That gap is usually the next thesis.
Run another thesis — $5