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Palantir bought $50M in gold bars in August as cash pile grows
- blakesterz 5y agoIs it common for companies to buy gold like this? Where does someone (or in this case some company) store a big pile of gold bars?
- sigio 5y agoSame location as where they bought it from.... stored in bankvaults, just earmarked to new owners. The actual gold hardly ever moves physically.
- mywittyname 5y agoIn this case, maybe Peter Thiel's underground bunker in NZ?
- Miner49er 5y agoIt says it's in the northeastern US.
- deleted 5y ago[deleted]
- jdoliner 5y agoInteresting choice, gold has lost 5-10% of its value measured in USD over the last 10 years. One of the most inflationary periods ever and it hasn't even kept up with fiat.
- missedthecue 5y agoIsn't printed inflation exceptionally low from 2011-2021?
- chrisco255 5y agoPrinted, sure, not counting for asset inflation, energy costs, healthcare, education, housing, and all the other things that really matter. But sure, you can get a Big Mac for less than $6 still.
- pessimizer 5y agoInflation over the last 10 years averages 1.7%, which makes it probably the least inflationary 10 year stretch ever.
- deleted 5y ago[deleted]
- adventured 5y ago> Inflation over the last 10 years averages 1.7%, which makes it probably the least inflationary 10 year stretch ever. The US went through several stretches of deflation, prior to the modern fiat era. Some of those eras likely saw ten year stretches with close to no price inflation, particularly around the time of the industrial revolution (which applied enormous downward pressure to price inflation). "Prices dropped an average of ten percent every year between the years of 1930 and 1933." https://www.investopedia.com/ask/answers/040715/were-there-any-periods-major-deflation-us-history.asp https://www.investopedia.com/ask/answers/040715/were-there-a... Or St Louis Fed, 2010 "U.S. Historical Experience with Deflation" "Many people associate deflation with difficult economic times—slow growth and/or high unemployment—such as in Japan since the early 1990s or in the United States during the Great Depression. Yet, not all deflationary periods are associated with hard times. For example, in the United States from 1876-79, the price level fell on average almost 5 percent per year while average output growth exceeded 7.6 percent." https://files.stlouisfed.org/files/htdocs/publications/es/10/ES1030.pdf https://files.stlouisfed.org/files/htdocs/publications/es/10... Of course this always invites the common economics debate centered around whether inflation should properly only be considered a purely monetary phenomenon or should include more comprehensive factors (eg supply and demand pressures). Ultimately I find the only thing that really matters is to define one's terms when discussing it, for clarity.
- landemva 5y agoMy property tax doubled. Good produce, meat, and fuel prices keep rising. The 99 cent Hagen Dazs mini tiny ice cream cups in grocery freezer were 99 cents. Two weeks ago that changed to 2.49, though currently on sale for $2.29. I suppose the cups are so small they couldn't play the shrinkflation game.
- codehawke 5y agoA good hedge against inflation, I suppose? People are desperate. If learning to code, check out https://www.codehawke.com https://www.codehawke.com
- privatdozent 5y agoPalantir is unprofitable?
- missedthecue 5y agoGeneral rule of thumb is that if it's a Californian tech company that isn't FANG, it's unprofitable.
- etc-hosts 5y agoI think they moved to Denver Colorado
- brundolf 5y agoI hope so. It's a surveillance company with a neo-nationalistic streak and zero shame about how it makes its money.
- fkjhdjbd 5y ago> Its engineers were accustomed to spending profligately—the company sponsored 13-course tasting-menu lunches with lobster tail and sashimi at headquarters—calling such extravagance “Palantir Entitlement Syndrome.” https://www.wsj.com/articles/palantir-has-a-20-billion-valuation-and-a-pretty-big-problem-it-keeps-losing-money-1542042135 https://www.wsj.com/articles/palantir-has-a-20-billion-valua...
- dkdk8283 5y agoHaving worked in Mountain View in late 2000s I can say extravagant meals were extremely common. I went on corporate excursions to exotic destinations regularly with insane expense limits on top of bar or dinner events. Many of us have had a wild ride in tech, I think those days will take another 30 years or more to come back if ever.
- c7DJTLrn 5y agoI'm no economist, but companies putting their cash away into assets like this is a bad sign right? My understanding is that money flowing indicates a healthy economy of people unafraid to spend.
- missedthecue 5y agoWhen Palantir buys $50 million in gold, it means that $50 million dollars has flowed to some gold broker, who will now spend it buying something else (labor, inventory, market research, sales, etc...)
- defgeneric 5y agoStill, on the other end of the trade the capital remains parked or "hoarded" in gold. It is removed from circulation.
- missedthecue 5y agoI don't understand what you're saying. If Palantir buys $50MM in gold, they are not removing $50MM from circulation. They are giving $50MM to another entity, and receiving a piece of paper that says they own x number of gold bars in a vault somewhere. The gold doesn't move. The gold isn't doing anything different than it was before Palantir owned it. The fifty million dollars continues to flow and buy goods and services. It is not removed from circulation. If you go out and buy a bar of gold do you think you are removing money from circulation?
- Ericson2314 5y agoSomething else could be more gold if it looks like another stupid asset bubble.
- c7DJTLrn 5y agoWell, yes, obviously the money doesn't vaporise. My question is whether these companies are taking a bearish position by investing into assets (instead of employees/new ventures), and whether this could be a sign of an economic storm approaching.
- Scoundreller 5y agoGold as a hedge against inflation always confuses me. Why not buy a productive asset instead? Maybe even your own shares if they’re actually good? Why would you sell your stock if you have no need for the cash? If I wanted to invest in gold, then let me do that myself. I have many better options than Panantir.
- missedthecue 5y agoIf you were in Zimbabwe 15 years ago would you rather buy shares in the top 100 Zimbabwean companies, or gold?
- Scoundreller 5y agoDefinitely the Zimbabwean companies, their debts are about to get zero’d out.
- arodyginc 5y agoDebt wouldn't be zeroed out if it was made on external markets, right?
- Scoundreller 5y agoThen there would be no impact. If you’re a company producing stuff and Zimbabwean dinars are worth 1/10th as much, you would charge 10x as much. If you’re a shell company with Zimbabwean dinar cash assets and external USD debt, you’re screwed but you’re also not a going concern.
- mywittyname 5y agoWhy isn't shares in the top 100 world companies an option?
- missedthecue 5y agoBecause Palantir is worried about the USD (and presumbably other major currencies such as the pound and euro) devaluing. There isn't an escape from that. Mars doesn't print its own currency yet.
- LukeEF 5y agoselling stock in a loss making company to buy gold bars? great.
- varelse 5y agoMy late friend who was a BFF of Peter Thiel because they were Stanford chums, used to describe Palantir as an evil company wrapped up in Harry Potter metaphors despite taking money from them as a consultant. I see nothing but confirmation bias here. Commence the downvotes for even mentioning this.
- programmarchy 5y agoYou deserve the karma hit for mistaking Tolkien with Harry Potter.
- KptMarchewa 5y agoThere is also Anduril. I have no idea why those people love Tolkien so much.
- jazzyjackson 5y agoMaybe because the world looks like a middle earth battle between good and evil to them.
- varelse 5y agoHis words not mine and since he's dead there's no opportunity for clarification here. Also, I used to see them wandering downtown Palo Alto dressed as monks or as people from The Matrix etc. The LARP was indeed strong with these folks.
- bloodyplonker22 5y agoPeter Thiel, himself, mocked this type of behavior from Google when Eric Schmidt couldn't find anything else to do with Google's hoards of cash rather than buying back shares. Thiel likened paying a dividend to admitting that your shareholders know what to do with the money more than you. It's even worse in Palantir's case because it is supposed to be a growth company that should be reinvesting the capital into growth.
- CheezeIt 5y agoThey’ve done the exact opposite of what you’re saying. They raised money, and now they’re holding on to it.
- WheelsAtLarge 5y agoDuring the last economic downturn interest rates in a few countries fell below 0. This means that banks start to charge for holding cash instead of paying interest. I suspect that he feels that interest rates will have to fall below 0 at some point so holding gold is a good alternative to save money for future use. Another possibility is that inflation will eat up the money's value so gold is a good place to store value until needed. I say it's a good sign that Palantir does not need immediate cash and are able to meet their expenses near term. Also, Google and Plantir are in 2 different phase in their growth. Google is unlikely to need cash for growth since it's making a truckload of earnings every quarter. Palantir on the other hand is likely to need some money in the future to grow. Gold is a great alternative for Palantir but not Google.
- only_as_i_fall 5y agoNothing says growth like blowing a bunch of money on unproductive assets.
- legerdemain 5y agoPalantir is also buying up Bitcoin. Palantir is also trying to create more customers by buying startups via SPACs and giving them its software. Palantir is also largely run at the whims of its eccentric presidents-for-life and printing stock to compensate them like there's no tomorrow. Palantir is many things, and this is just one. I doubt it tells any larger truth about the market by itself.
- Scoundreller 5y agoTFA suggests they don’t hold any crypto currencies, but after 12 years of cryptocurrency, they have heard about them and talked about it over beers. > was asked on an analyst call if the company could have bitcoin or other cryptocurrencies on its balance sheet, he said, “The short answer is, yes, we’re thinking about it, and we’ve even discussed internally.”