What is investing all about?
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Tom Stevenson is an investment director with Fidelity Worldwide Investment.
Warren Buffett's annual letter to the shareholders of Berkshire Hathaway is always a most useful investment analysis.
You might remember, for example, that last year he was particularly bullish about the United States when everyone else was looking nervously at its recovery and the long-term impact of the financial crisis.
He talked about his "all-in wager" on the US economy - the $34-billion investment he made in the American railroad - and how his "elephant gun" was primed and aimed at other large US acquisitions.
You might also remember the US stockmarket was one of the strongest in the world last year.
This year, he is equally bullish about the US economy, repeating his belief that its best years lie ahead, but the highlight for me this year is his reminder of just what investing is all about.
Buffett has become one of the richest men in the world by deploying simple and repeatable long-term investment strategies.
He has bought reliable companies that generate strong cash flow and invested the income they generate to buy more of the same.
He avoids low-yielding investments that become hostages to inflation and steers clear of speculative investments that rely on rising demand from other investors to lift their value. Instead, he prefers productive investments that generate cash and profits.
He explains this theory beautifully by comparing owning all the world's gold - worth around $9 trillion - to an alternative investment of a similar value comprising all the crop land in the US and 16 Exxon Mobils.
Because the gold will never produce a penny of income, your only hope of a return is the gamble that the metal will become more desirable and rise in value on the basis of speculative demand.