Beans, bullets and bomb shelters
How a man I sat beside, and a market I never saw coming, turned me from a sceptic of gold into a student of it.
Early in my career, in the late 1990s, I sat a few feet from a man who believed in gold. Every morning he arrived, set down his coffee, and let the office know that today was the day to buy it. And every morning I had my answer ready. Buy beans, I would say. The next day, buy bullets. The day after that, bomb shelters. The list was endless, and so was my certainty. Gold, to me, was for the end-of-the-world crowd, the people waiting in a basement for a collapse that never came.
He took it well. He was from a mining town in northern Ontario; he had grown up around the metal and understood it in a way I did not trouble myself to. I mistook my ignorance for sophistication, which is the most expensive mistake a young man in this business can make.
What I had, though I could not have named it then, was a bias. I had decided what gold meant before I had done a single hour of genuine work to find out, and after that I heard only the things that agreed with me. Every doomsday newsletter that quoted a gold enthusiast confirmed my view. The quiet, serious case for it never reached me, because I was not listening for it.
Then the tech wreck came.
I remember the screens, red from top to bottom, and the question everyone in that office was asking in some private way: how did I miss this? Not how did the market fall, but how did I, a person paid to look after other people's money, not see it coming? The senior advisers had missed it. The fund wholesalers who took us to lunch had missed it. Managers with five-star records and serious mandates had missed it. One balanced fund won manager of the year with a return of -22%; that was the kind of year it was. And the part that has stayed with me is that the information had been there the whole time. If you had looked, truly looked, you could have found it.
Some had. A prominent research analyst had said, while a celebrated technology stock traded near $125, that it was really worth $2. I had seen the note. I ignored it. A well-known value manager had refused to own the technology names at all, and had bought gold instead while it sat under $300 an ounce and oil near $12. For his trouble he lagged the market for a stretch, his clients' advisers called for his head, and he was let go. He was right. He was simply early, which in this business looks identical to being wrong, right up until it does not. I ignored him too.
What I could not ignore, once the dust had settled, was a question that had crept up on me and would not leave. I managed money. People handed me the product of their working lives and trusted me to keep it safe. And one day it struck me, with something close to horror, that I did not actually know what money was. Where did it come from? What gave it value? Why was a slip of paper, or a number on a screen, worth anything at all?
Have you ever lost the spelling of a simple word? One you have written ten thousand times, and for a moment your mind will not produce it, and you stare at it sure you must be the only person alive who cannot manage something so basic. That was the feeling. I assumed everyone around me knew the answer and that I alone had missed the lesson. Impostor syndrome, we would call it now, and mine was off the charts. I felt like a fraud, and an irresponsible one at that.
So I went looking, and it did not take long before the search for what money is led, again and again, back to gold. I laughed when I saw it coming. There he was again, my old neighbour, beans and bullets and bomb shelters. But this time a few things landed, and they landed hard, and they got through a skull that had spent years being deliberately thick. How that happened is a story for its own page.
I tell this one only to make a small point. The strongest case against gold I ever heard was my own, and it was built entirely of things I had never once examined. The fix was not cleverness. It was going back to first principles, starting not from what everyone around me believed about money, but from what was actually, verifiably true, and building up from there. If I had to do that in public, at the cost of some pride, then anyone can. It starts with a single plain question: what is the money you are holding, and what is it actually worth?