Zoho founder and former CEO Sridhar Vembu has reaffirmed his long-standing faith in gold as a reliable hedge against cryptocurrency. In a latest post on X, Vembu said that he “is not interested in crypto”. The Zoho founder added that his preference for gold stems from its stability and historical resilience during periods of financial uncertainty. He also positioned himself in contrast to several tech leaders who have championed digital assets as the future of finance.“I have long been in the “gold as insurance against currency debasement” camp, for over 25 years now. Over the long term, gold has held its purchasing power in terms of commodities like petroleum, and gold has held its own against broad stock market indexes. No, I am not interested in crypto,” Sridhar Vembu writes in the post. Vembu’s comments come at a time when global investors are once again turning to gold amid concerns over inflation, currency fluctuations, and geopolitical tensions. Meanwhile, the crypto market has remained volatile despite institutional interest and regulatory progress in some regions.In his post, Vembu also shared screenshots of excerpts from a post by investor and author Lyn Alden that are as follows:“Professor Aswath Damodaran maintains records of the performance of various assets classes going back to 1928. If you had invested $100 in T-bills starting in 1928 and compounded them through 2023, you would have $2,249 by the end of 2023. If you had taken more volatility risk and instead invested in longer duration T-bonds, you would have turned $100 into $7,278.That seems great at first, except for the fact that this is entirely due to dollar debasement along the way. If you had simply put $100 into gold, you would have turned $100 into $10,042. The number of dollars in the U.S. broad money supply increased by more than 400x from 1928 through 2023.”“Professor Hendrik Bessembinder compiled some of the most comprehensive datasets on this phenomenon.For his U.S. study, he found that among 26,000 identified stocks between 1926 and 2019, more than half failed to outperform T-bills. But the reality is even worse than that. Just 4% of all stocks accounted for basically all stock market returns in excess of T-bills; the other 96% of stocks collectively matched T-bills as a group. And just 86 stocks accounted for half of all excess returns.In other words, the majority of U.S. stocks historically underperformed T-bills, and then another big minority of stocks generated only minor excess returns over T-bills, and then a very small sliver of massive outperformers represented nearly all stock market excess returns over T-bills. And as the previous section showed, T-bills underperformed gold. And so, the vast majority of stocks failed to outperform the purchasing power of a piece of yellow metal.And that’s for the United States, which had the best-performing stocks of the past century. For non-U.S. equities, the numbers are even worse. For his global study, Bessembinder studied 64,000 stocks from across the world over a three-decade period and found an incredible concentration of returns.”
About the Author
