Conceptually gold should be a helpful option. In reality though, it may not be exactly like many people may think.
Gold’s liquidity is not very good. Then people say it’s not true: bring .9999 gold with CSFB (for example) stamp on to any bank. Or it just stays in bank’s storage, change sticker on top… For that, the key is the credibility of the system (government, and bank, etc.) which if collapse, you got nothing. In US history, government confiscated all physically gold (or purchased) and made it illegal for people to own. Nowadays many countries still do that, like India maybe, or you could only trade in very restricted way.
Well we all know paper products developed to match performance of gold, are not real gold. Again, the key is whether the system will honor what it promised to deliver. When the bad time comes you got nothing, when you most need it, because a guarantee is only as good as the entities’ strength.
Now the only sure thing is to take delivery, which does have associated expenses, and it’s not exactly liquid. Remember the famous Hunt brothers silver story back in 70’s? That market is highly speculative and manipulated. In real world we all need to eat, we have bills to pay, we need cash flow. When the crisis came, the world panicked, you think the gold price (in term of USD) would immediately go up? No, it went down. Because that’s the only hard assets major banks can liquidate, and supply-demand squeezed it, again when you mostly need it. Remember the most difficult time for Russia back in 1990s? Yes, they could knock crude oil down to $9, again that market was highly speculative and manipulated.
For WB that kind of portfolio and strategy, I could understand why he doesn’t pick gold. I probably wouldn’t either if I were him. Matter of fact, it’ll be speculative or irresponsible to engage into a different game he is not good at. He tried and got burned in currency market, and stayed out of it, which is smart.
On the other hand, WB loves certain type of business which got quality goodwill thus performs well under inflation scenario and constantly generates cash. Thus when time comes, people begging him to take quality businesses over for cheap (that's the real reason, long cycle and deep pocket). It’s like when the flood disaster comes, you want to anchor to something looks strong, or Noah built a boat and floated with it? Another suspect which I didn’t verify, like all old railroad stories, BNSF should have tons of land.
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