Warren Buffett got it horribly wrong? The ‘unproductive’ asset that is ruling markets in 2025

What if I tell you that Warren Buffett — the man whose decades-long success earned him the title of the ‘Oracle of Omaha’ — misjudged an investment opportunity throughout his eight-decade-long investing journey. Many might find it hard to believe that Buffett could go wrong on an investment asset — and that too, while maintaining the same stance for several decades. Here, we are referring to Buffett’s long-held views on gold as an investment.

Despite market history over the past century showing that whenever investors are gripped by fear due to any unfavourable market conditions, they have always rushed towards gold for its safe-haven appeal, Buffett remained unconvinced.

A glimpse through history — when everyone ran for gold during crises

Over the past 100 years — from the Great Depression (1929–1939), World War II, and the Oil Crisis of the 1970s to the Dotcom Crash (2000), the Global Debt Crisis (2008), the COVID-19 pandemic, and the Russia-Ukraine war — every time gold has surged amid changing market dynamics. During every period of economic uncertainty, investors turned to gold and shunned financial assets like stocks and bonds.

So, how did the legendary investor Buffett — now 94, with a fortune of around USD 150 billion as of October 2025 — maintain such a contrarian view on gold, even after witnessing its stellar performance during some of the most turbulent phases in history?

Buffett has always considered gold “non-productive” and even worthless, as the yellow metal never fit into his value investing philosophy.

2025: Nothing short of ironic for gold investment

The asset that Buffett — one of the world’s most successful investors — once called ‘useless’ is shining the brightest in 2025.

This article has reviewed the performance of physical gold over the past one, three, and five years.

Gold prices (24-karat) have surpassed Rs 1,22,000 per 10 grams in India, according to MCX rates. A year ago, on October 8, the precious metal was priced at Rs 77,400 per 10 grams — reflecting a whopping 58% surge in just 12 months.

The yellow metal’s 3-year and 5-year returns are equally impressive. Physical gold has delivered absolute returns of 116% over three years and 147% over five years.

In comparison, Indian equities have shown relatively subdued performance over the past year. The benchmark indices — Sensex and Nifty — have managed to remain in positive territory in terms of 1-year returns. Their 3-year and 5-year returns stood at 40% and 102%, respectively.

This clearly shows that gold has comprehensively outperformed equities over the 1-year, 3-year, and 5-year periods.

Buffett’s dislike for gold

Buffett once said, “Gold just sits there, doing nothing.”

Buffett was right in saying this. After all, gold does not produce a cash flow, like a fixed deposit or say for instance, a company.

Nevertheless, old has surprised investors, beating most asset classes over the last five years.

For a very long time, investors will remember 2025 as the year that proved Buffett horribly wrong. But why did he maintain his unique stance on gold and never change his views over several decades?

The answer probably lies in Buffett’s core belief that ‘money should work, not just sit for display’.

He has always said that one should invest where real value is created. Therefore, he has consistently preferred productive assets — such as company stocks, businesses, or real assets like farmland — that produce something, grow and generate income.

In Buffett’s view, an investment is something that makes money grow into more money. He always believed that true wealth is that which grows over time and generates income.

Gold, according to Buffett, does nothing but sit idle — it doesn’t pay interest or dividends. The legend went on to say that betting on gold based on fear and uncertainty is not investing, but speculating.

Buffett’s logic behind his dislike for gold is simple — the price of gold depends on whether someone else is willing to buy it at a higher price in the future. Its value, therefore, is determined not by earnings or production, but by emotions, expectations and fear.

The comeback of the ‘unproductive’ asset

Here we are in 2025 — the year when Buffett’s once-overlooked asset gold has outshined all other major investments. The asset that was labeled worthless for decades has now become the king of the market.

What led to gold’s meteoric rise?

There are several reasons behind this extraordinary rally in gold in the last few years. Central banks across the world have been increasing their gold reserves. Meanwhile, geopolitical tensions, war fears, and global economic uncertainty have given gold a renewed push.

The weakness of the US dollar and persistent inflation concerns have also driven investors to park their money in assets that are both safe and reliable.

Gold symbolises trust, it is tangible and it feels safe. When other markets falter, investors return to their old friend — gold.

Buffett’s investment strategies remain timeless

Buffett’s greatest lesson has always been: ‘Don’t try to beat time — go with it’.

The Berkshire Hathaway CEO believes that a true investment isn’t one that shines today, but one that grows and prospers over time.

While gold dominates the headlines today, Buffett’s productive investments in giants like Apple, Coca-Cola and American Express have been creating wealth for Buffett for decades.

For Buffett, a few years of ups and downs don’t matter much. He knows that true success in investing lies not in one bright year, but in a lifetime of patience.

So, while gold may have its moment, Buffett’s philosophy — that true wealth is created, not stored — remains the guiding principle for every long-term investor.