I don’t really get the appeal of gold to gold bugs, people who obsess over gold and say it’s an essential commodity to have in one’s portfolio.🤑

Gold is shiny and popular for use by rich people for showy jewelry, 💎 it’s uses in the real economy are quite limited — it’s fantastic conductor and has some other uses in chemistry — but other then that is has no real value. Gold in certain electronics is an important use, but the gold typically used is only a few atoms thick and only a small portion of the gold mined and consumed every year. Gold might not be entirely without use, but most of it’s practical uses are in margin, a small part of production each year.📿

There is some value in investing in commodities or energy businesses as a hedge against inflation, especially energy-driven inflation like what we saw during the 1970s with the energy-crisis. That said, commodities are always risky, as you don’t know if products will be substituted for new products. Coal, for example, has seen a long decline in recent years as natural gas and renewable have replaced it as a cheaper source of energy.🛢 Energy companies, especially in broader form, are less risky then raw commodities, as they enjoy a larger degree of flexibility in the sources of energy they sell. Electricity companies will continue to have a dominate role no matter what their generation is fueled by, coal and oil companies have certain talents and land ownership that will make them leaders even if we move towards geothermal, wind and solar.

Most precious metals aren’t really the precious, even if they are rare.🐲 I am more interested in the real economy, something you can point to actual economic growth, rather then some dubious scam pushed by certain unscrupulous business people.