A Story about Gold

I was an ex-Navy Regular. When I was a trainee at the Institute of Maritime Operations and Systems (IMOS), my Encik (aka Warrant Officer) told me one of the most memorable tales he ever experienced.

It was during Vietnam War and Vietnamese refugees were fleeing from the war by sea.

My Encik and his Ship was assigned to redirect those refugees to other countries that may accept them. Singapore generally does not accept refugees due to the limited landmass.

Not all refugees’ ships or boats were well prepared and stock up with enough provision. Some of these refugees offer to buy provisions from my Encik’s Ship. They were willing to trade a small piece of gold for a bag of rice.

I do not know if my Encik’s Ship sold their food stock for that gold and if they do, what do they do with the gold, and who gets to keep it.

But there are a few lessons I learn from this tale.

Gold is valuable internationally

I don’t have to tell you that. But I sincerely believe it is important to have some physical gold. Yes, Singapore is safe. However, it is good to have your gold.

Like those Vietnamese refugees, in times of really deep troubles and chaos, gold may be something that can you get a bit out of trouble, like buying food from a foreigner.

Preparation is important

In the refugees’ case, a lack of preparation can be fatal. I assumed my Encik’s ship did sell some food to them, and thus it cost the refugees a high price. I can’t help to imagine that what if they encountered pirates instead of his ship. Or what if they weren’t allowed to sell food to them either?

As such, the refugees’ survival was questionable.

Being prepare may help them better, and improve their chances of survival.

Or at least they don’t have to pay a higher price for food.

Be mentally prepared to see tragedy

Although it isn’t related to finances, I took a mental note that since I was working for the military, I may encounter some tragedy.

I am lucky that all of my friends that I met in the Navy are still safe and sound to date. I hope even more in the future. But some unfortunate accidents happened during my career. However, I sincerely believe I am getting the better end of the Navy experience.

Value investing view

Of course in the context of Value investing, gold isn’t a good idea.

As Warren Buffet why in his 2011 Shareholder letter:

“Gold … has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end” — Buffett, letter to shareholders, 2011

I agree with it.

Gold can’t produce anything. If I would want to increase my wealth, assets that produce income are in a better position to help me with that, as I am about the compound with the income given.

However, I still own some physical gold. Although I highly doubt Singapore will go to war or experience hyperinflation any time soon, a small amount of gold maybe helps in an unforeseen circumstance. Who knows? What if I need to survive and gold may help to pay or buy my way out of trouble?

If I can’t survive, I can’t be rich right?