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) in January 2005.
Held through 2026 with no changes.
Compared against the S&P 500 (SPY) over the same period.
Dividends from SPY reinvested; gold pays no dividends.
GLD · 5,448 trading days · benchmark SPY
$10,000 became
$0
This thesis is the S&P 500, so it returned what the index returned over 2005–2026: $94,836. There is no gap to explain — the question is whether you would have sat through the fall below.
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, gold returned +850.5%, ending at $95,046 against the index's $94,836 — a match, not a win. The SPY figure includes reinvested dividends; gold paid nothing, so the comparison flatters gold more than it looks. The worst stretch ran from August 2011 to December 2015, a −45.6% drawdown that did not fully recover until July 2020 — nearly nine years of waiting. In 2013 alone, gold fell −28.3% while the index returned +32.3%, a 60-point gap that required holding through without changing course.
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 full 2005 start date is covered.
- Gold pays no dividends or distributions; the SPY benchmark includes dividend reinvestment, which gives stocks a compounding advantage not reflected in the gold leg.
- 'Stocks' is proxied by SPY (S&P 500); the thesis does not specify which stocks.
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