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Topic
Who are some of the best, most famous investors who have gone big (millions big) into buying gold?
New Uses for Gold Increase its Value
Among the many reasons for investing in gold is the fact that many of the richest and best investors in the world believe that gold prices are going higher – and they’re putting their millions where their mouth is. There’s an old investing adage, “Follow the smart money”.
In this article, you’ll learn some very interesting and little-known facts about some of the most successful investors of the past half-century, and about their reasons for becoming hugely bullish on gold. Whenever these individuals make a major investment in an asset such as gold, hundreds or thousands – if not tens of millions – of other investors, both institutional and retail, pay close attention. That alone is reason enough for us to also pay attention to their bullish forecasts for gold.
Famous Investors Buying Big into Gold
There are dozens of the most well-known, most successful investors I could review here who have invested fortunes in their belief that gold prices are going higher. My list here is comprised of just five of the top investors buying gold. They have in common well-established investing track records that include correctly predicting major market moves such as the 1980s stock market rally and subsequent crash, the housing market debacle of 2007-2008, and the recent rise in inflation. Let’s learn some interesting facts about their background and investing history, and about their strongly bullish positions on gold.
- Paul Tudor Jones
I would never, ever bet against this guy. Paul Tudor Jones has the astonishing track record of having traded for several years without ever having a single losing day!
Paul Tudor Jones comes from an historical line of famous traders. He learned trading in the cotton futures market, in the 1970s, under the mentorship of Eli Tullis, one of the most successful cotton traders in history. He must have learned well, because he went on to eventually become the chairman of the New York Cotton Exchange.
(Interesting note: Tullis ended up firing Paul for falling asleep at his desk after a night of hard partying. Hey, that’s what life is like in New Orleans. You can walk by bars at eight in the morning on your way to work and see guys sitting at the window, sipping away. I always wondered, were they up drinking all night – or had they gotten up at 7 AM just to go get a drink?)
Tudor Jones founded Tudor Investment Corporation in 1980. Apparently, Eli Tullis didn’t harbor any hard feelings toward him, as he was one of Paul’s earliest investors. Tudor Jones first made headlines in the 1980s, when he first correctly foresaw the huge stock market rally of the early 1980s. He then outdid himself by predicting the 1987 crash. While other traders were losing a fortune that year, Paul Tudor Jones was making one. For the year, his hedge fund secured gains of more than 125% - approximately $100 million.
Since then, he’s doubled his investors’ money about every three or four years, on average. Tudor Investment Corporation now manages more than $13 billion. Tudor Jones’ personal net worth is estimated to be over $8 billion.
Jones is also a famous philanthropist, driven by his strong Christian beliefs. Through his Robinhood Foundation and other charitable organizations that he’s founded, he’s given billions to charity over the years.
So, what’s Tudor Jones opinion on gold? – He stated flat out in an interview with Bloomberg, when asked about the best opportunity in the market, “As a macro trader, I think the best trade is going to be gold”. Well, like I said, I would never, ever bet against this guy.
2. John Paulson
Okay, let’s check out another billionaire fund manager who likes gold. Like Paul Tudor Jones, John Paulson is another hedge fund manager who’s proven himself to be good at anticipating market disasters and making a fortune from them. He became a billionaire in 2008 by going short when the housing market collapsed. During that time, his fund generated more than $15 billion in profits for its investors.
While Paul Tudor Jones has always been primarily a technical trader, focusing particularly on momentum factors, John Paulson’s investment strategy has primarily been an event-driven one.
Paulson founded, in 1994, the Paulson & Company hedge fund, noteworthy for having more than $30 billion in total assets under management. Prior to that, he worked at Boston Consulting Group and Bear Stearns. When he ventured out on his own with Paulson & Company, he leased office space from his former employer, Bear Stearns.
Paulson’s personal net worth is estimated to be over $3 billion.
Again similar to Tudor Jones, Paulson has become a major philanthropist over the years, donating hundreds of millions to various charities.
Courtesy of another Bloomberg interview, we have Paulson’s outlook on gold. He confided to Bloomberg TV that, “as inflation picks up…the logical place to go is gold…the supply and demand imbalance causes gold to rise." As early as 2010, Paulson began plowing more than $1 billion dollars into gold stocks. His gold investments that year enabled his hedge fund to set a record, scoring more than $5 billion in profit. He’s also long been a leading advocate of purchasing gold bullion. As of 2024, he's reputed to have one of the biggest privately held stores of gold in the world.
(Note: You may want to take note of a 2014 prediction that Paulson made, stating his belief that Puerto Rico will eventually become “the Singapore of the Caribbean”.)
3. Ray Dalio – Who’s Ray Dalio? Oh, only the founder and manager of the largest hedge fund in history, noteworthy for having generated the highest dollar gains of any fund, ever.
Dalio founded Bridgewater Associates in 1975, just working out of his New York City apartment, after earning an MBA degree from Harvard Business School. As the world’s largest hedge fund, Bridgewater Associates now works with more than $120 million in assets under management. By the way, Bridgewater provides a lesson in investing perseverance. There was an original Bridgewater Associates that Dalio started with a couple of friends. That venture didn’t pan out, but Ray decided to go with the same name when he founded what would become the world’s most successful hedge fund.
Ranked by Bloomberg as one of the 100 richest men in the world, Dalio’s personal net worth is estimated at about $15.8 billion. Oh, and that’s down from a peak of $22 billion a couple of years ago. I imagine he can stand the hit.
Like Paul Tudor Jones, Dalio has an interesting backstory of how he got started in the investing world. He started investing at the young age of 12, placing market bets based on stock tips he got from the golfers he caddied for at a Long Island golf club. That’s pretty shrewd thinking for a 12-year-old. After all, if you’re living on Long Island and playing golf at an expensive country club, you’re probably not losing a fortune in the financial markets. One of the men whom Dalio caddied for was George Lieb, a professional trader on Wall Street. Lieb’s son, also a Wall Street trader, later gave Ray a summer job at his brokerage firm.
Dalio’s first bet in the stock market – again, this was at the tender age of 12 – was $300 that he poured into an airline stock. His investment tripled in less than a year. By the time he was in high school, Ray was already working with an investment portfolio of several thousand dollars. When he was in college, he expanded his investment horizon to include trading commodities.
Again like Tudor Jones, Ray appears to have had an affinity for partying. Once, when drunk, he punched his boss at the securities firm, Shearson Hayden Stone. And while he was working in the commodity futures business, he spiced up the annual convention of the California Food and Grain Growers' Association by hiring a stripper to perform.
Ray appears to have been a born entrepreneur. In addition to caddying, his other childhood enterprises included shoveling snow in the winter, mowing lawns in the summer, and handling a newspaper route year-round.
He published a book in 2017 - "Principles: Life & Work" – that became a New York Times bestseller. The book outlines his philosophy on investing and on managing corporations. I don’t know about you, but if I were the CEO of a major corporation, I’d keep a copy of that book close at hand.
Like both of our previous big-time gold investors, Ray Dalio is a huge philanthropist, contributing more than a billion dollars to charity. His own charitable organization, Dalio Philanthropies, primarily supports education and microfinance ventures.
What’s Ray Dalio’s take on gold? Well, it’s pretty basic. He’s quoted as simply stating that, "If you don’t own gold, you know neither history nor economics." Dalio’s investing strategy is mostly based on recognizing trends, such as shifts in interest rates and inflation – and among the trends that he has identified recently is the rise in gold prices. In just a single quarter of 2020 alone, Bridgewater Associates reported investing $400 million in gold.
4. Stanley Druckenmiller
Stanley Druckenmiller is the founder and manager of the major hedge fund, Duquesne Family Office. With hundreds of millions in assets under management, the largest portion of the fund’s holdings are comprised of investments in gold bullion, gold ETFs, and gold stocks.
Druckenmiller worked under George Soros, managing the Quantum Fund from 1988 until 2000. He famously partnered with Soros in making a mint (reportedly, the pair raked in $1 billion+ in profits) by shorting the British Pound in 1992 just before it was devalued.
Like other of the top investors on our list, he also correctly played the housing market crash in 2008, reportedly raking in more than $250 million in profits.
While he was in college, Stanley partnered with a friend, Lawrence Lindsey, to open, of all things, a hot dog stand. (Lindsey would later become the chief economic policy advisor for President George W. Bush.)
A native of Pittsburgh, Druckenmiller secured a job as a trainee at Pittsburgh National Bank after graduating from college. It says quite a bit about his ability as an investor that, just one year later, he had already been promoted to the position of the bank’s head of equity research. It was only three years later that he founded the hedge fund, Duquesne Capital Management. Duquesne Capital produced a 30-year track record of averaging 30% annual returns on invested capital, all without ever having a losing year.
Stanley Druckenmiller’s personal net worth is estimated to be more than $6 billion. Like the other super successful traders on our list, he has also been a prominent philanthropist, contributing hundreds of millions to various charities.
Druckenmiller has been a big investor in gold for decades. He invested more than $320 million in SPDR Gold Shares, an ETF backed by physical gold bullion. He probably likes the yellow metal even more now, given the fact that he correctly forecast in 2020 that policy moves by the Federal Reserve were likely to trigger a major surge in the inflation rate.
5. Warren Buffett
Our list here wouldn’t be complete without adding Warren Buffett to it. Buffett is probably the most famous investor of our time. Even tens of millions of people who’ve never invested a dime in the financial markets, nor heard of the other profitable investors on our list, are familiar with who Warren Buffett is. He’s certainly one of the most successful investors – if not, in fact, the most successful investor – in market history.
The “Oracle of Omaha” is known far and wide for being the co-founder, CEO, and chairman of the huge conglomerate, Berkshire Hathaway. Class A shares of Berkshire Hathaway, currently sell for a mind-boggling $614,000 a share. (Gee, I wish I’d bought even just a single share back when it was going for $12.50.) Companies owned by Berkshire Hathaway include battery manufacturer, Duracell, insurance giant, Geico, and the fast-food chain, Dairy Queen. You certainly can’t accuse Warren Buffett of not being well-diversified.
Buffett has often stated that his investing style is largely based on the value investing principles espoused by Ben Graham, as delineated in Graham’s books, “Security Analysis” and “The Intelligent Investor”. The latter volume is often touted as the “bible” of value investing.
Warren Buffett’s personal net worth is estimated to be well over $130 billion. (Yes, that’s billion, with a “b”.) He has pledged to give away virtually all of his accumulated fortune, and has already made an impressive start on doing so. His charitable contributions thus far add up to more than $50 billion. In 2010, he joined with Bill Gates in urging other billionaires to give away most of their fortunes. The Gates Foundation has been the recipient of much of Buffett’s charitable donations.
The interesting thing about Warren Buffett and gold is the fact that for many, many years he advised against investing in gold. His stated reasoning was that gold, unlike silver, has limited industrial uses. (I guess he just kind of overlooked its massive usage in the jewelry market.) But then in 2020, when gold topped the $2,000 an ounce level, he suddenly plowed $500 million in gold mining stocks. And although Buffett wasn’t a big gold investor for many years, he has long been a major silver investor – reportedly investing more than $1 billion in silver - based on the fact that silver does have a myriad of continually expanding industrial uses.
The Top Investors Buying Gold - Summary
So, there you have it – five of the most super successful investors and financial insiders of all time who are betting hundreds of millions to billions on gold. These are not individuals who throw that kind of money into an investment on pure speculation or just a whim. All five of these guys – Tudor Jones, Paulson, Dalio, Druckenmiller, and Buffett – have track records in trading that put them in the investors’ hall of fame. They’ve all proven, time and time again, that they have the ability to anticipate what the next supercharged investment trend will be. One major trend that’s popped in their vision over the past several years is rising gold prices.
Other famous investors who have been noteworthy gold bulls include Robert Kiyosaki, Jim Rickards, and Peter Schiff. And let’s not leave out Jim Simons, who has generated greater than 50% annual returns for his investors for decades. Simons reportedly has amassed more than $40 million in gold.
Now, you can either bet with these top traders who have invested in gold – five market wizards who have a habit of being on the right side of the financial markets – or you can bet against them…but is that something you really want to do, be on the opposite side of the market from people such as Paul Tudor Jones and Warren Buffett?
Of course, no one can predict the future – at least not all of the time. But, as I noted earlier in this article, personally, I would never, ever bet against Paul Tudor Jones. So, if he likes gold a lot, then so do I. Add those other four gentlemen to the mix, and I definitely want to be buying gold.
- J.B. Maverick
Sources:
https://www.investing.com/analysis/paul-tudor-jones-likes-gold-200431156
https://en.wikipedia.org/wiki/Paul_Tudor_Jones
https://www.nasdaq.com/articles/big-name-investors-are-bullish-on-gold-2021-08-31
https://money.cnn.com/infographic/economy/4-top-investors-are-betting-big-on-gold/index.html
https://www.oxfordgoldgroup.com/articles/who-owns-the-most-gold-privately/
https://www.irainvesting.com/the-5-most-influential-gold-investors-in-the-world/
https://en.wikipedia.org/wiki/John_Paulson
https://en.wikipedia.org/wiki/Ray_Dalio
https://www.americanbullion.com/the-5-most-influential-gold-investors-in-the-world/
https://www.forbes.com/profile/ray-dalio/?sh=6d201792663a
https://www.forbes.com/profile/stanley-druckenmiller/?sh=5cbabaa317ff
https://en.wikipedia.org/wiki/Stanley_Druckenmiller
https://www.forbes.com/profile/warren-buffett/?sh=b49419e46398
https://en.wikipedia.org/wiki/Warren_Buffett
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