09. December 2020 | 10:37 CET
Berkshire Hathaway, Coca-Cola, Blackrock Gold - a long runner in the Advent season
The point is this: Even before the pandemic, a market correction was more than likely. Global debt once again reached a dangerous fever level. Then, of course, came the pandemic, which turned everything upside down and accelerated the debt wheel once again. But that was then, and this is now. The problems from before the March crash are still there, and in some cases, they have even intensified. Between January and September of this year, world debt has increased by another USD 15 trillion. Economists estimate that by the end of this year alone, global debt will have risen to USD 277 trillion. This liquidity will flow into the structural aid that has been promised, but above all into the financial markets, which are floating in orbit given weak economic figures. In the meantime, the pandemic continues to spread around the world, and the prospect of a rapid vaccination of 8 billion people or increasing herd immunity alone remains a hope for the quiet days, which will carry a very special sensuality this year because the future of humanity is at stake! Another year like 2020 - we don’t need that!
time to read: 4 minutes by André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Berkshire Hathaway - Evergreen for Christmas
Warren Buffett, the legendary head of Berkshire Hathaway, has a saying that many people are probably familiar with: "Be afraid when others are greedy, and be greedy when others are afraid". As you can probably tell, markets are overflowing with greed right now. Stocks are climbing higher and higher, but this is where Warren Buffett comes in, trimming his portfolio and becoming increasingly defensive. He has recently sold risk and invested the proceeds in stable companies. Even gold was on the shopping list. Why gold? Because in the past, the investor has stayed far away from the mineral, and he sometimes breaks new ground.
Buffett believes that you have to invest in the economy to help it. So in this theory, gold does not do anything; we do not get any help for the upswing. So why did he invest in gold? For the first time, the idea of caution and risk may have been a supporting factor - and now the experienced Warren also has a few advisors and investment strategists on board. So the recent entry into Barrick Gold must not have been a whim, but a challenging calculation for a well-defined hedging strategy.
Does the value guru believe the market is overpriced? There are even rumours that he would get involved in Elon Musk, one of the most expensive stocks in the world, without causing much of a stir. We don't believe that, but perhaps the next earnings reports in mid-January will shed some light on the matter. The Berkshire share, in any case, did not perform this year. But those who have been with them for 10 years gain a whopping 18% per year. That suits Warren - slowly & sustainably. The market capitalization is now a substantial USD 542 billion, and it should remain exciting to see where the Omaha tour guide will soon stop.
Coca-Cola - Shower continues to bubble
One of the few loss periods for Coca-Cola investors is likely to be 2020, as the value is still in the red at around 3%. Despite weak operating results this year, the shares of the beverage giant have recovered quickly since the March lows. Following the current uptrend, investors seem to be leaving behind the narrow results of 2020 and possibly 2021. But is the future so much brighter?
Coca-Cola has not seen any significant growth for many years. The loss of lustrous local sales caused by the novel coronavirus has hurt, with total revenues falling by a remarkable 8.4%, especially in the last quarter. Nevertheless, Coca-Cola, like all Dow Jones companies, has also repurchased substantial amounts of its shares. Given the low-interest-rate environment, it is therefore not surprising that investors are once again turning to a trustworthy dividend aristocrat like Coca-Cola for a reliable return. In the long run, an investment in beverage giants was always the right thing to do.
Coca-Cola is one of the most popular stocks among investors. It has a fantastic brand with 99.6% awareness and the best beverage distribution network in the world. Simply put, we humans will always want a drink, and Coca-Cola will be within reach in restaurants, grocery stores, stadiums, refrigerators and vending machines for decades to come. The Company has built something remarkable in the unprecedented reach of its brand and brand awareness. Coke has a market value of USD 231 billion, and with the trend continuing to recover, 2021 should be another year of returns. Hats off to Atlanta!
Blackrock Gold - gold hunt in Nevada
Similar to Warren Buffet, one can also take a closer look at Blackrock Gold Corp., a junior explorer focusing on gold & silver in North America. Led by an experienced board of directors, the Company is focused on its Nevada portfolio of multiple properties consisting of low sulphidation epithermal gold and silver projects. They are all located along the established Northern Rift in north-central Nevada and the Walker Lane trend in western Nevada, a precious metal deposit known for centuries.
A few days ago, additional high-grade gold and silver intercepts were discovered in a highly prospective target area at the Tonopah West Project. Drilling at the Denver, Paymaster and Bermuda (DPB) zones returned three meters of 10.5 grams per tonne gold and 1.2 grams of silver along the Merton Vein, which Blackrock says has exciting potential for a 290-meter dip. Other holes returned 297 g/t silver equivalent over 12.2 metres within the Bermuda-Merton vein and 285 g/t silver equivalent over 4.5 metres at the Paymaster discovery. This is a good place to pop the corks during the Advent season.
Andrew Pollard, President & CEO, commented, "As more high-grade results continue to roll in from our DPB target, this zone is now really starting to take shape, highlighting significant resource potential. Drilling continues to confirm our geologic model and, as we're now establishing continuity and mineralization of the many tightly spaced veins in this corridor, all of which remain open, we're putting together an extremely aggressive plan that will see us fast track to deliver an initial resource estimate before the end of 2021. (...) With more drill results pending in the short term, from both our Tonopah West and Silver Cloud projects, we look forward to significant news flow to end the year.
The value currently has a capitalization of only CAD 68 million at a price of CAD 0.64 per share and has seen prices of CAD 0.07 to CAD 1.61 within a year. Gold should, in our opinion, after the turn of the year pick up again, and Blackrock can then once again climb its highs.