Warren Buffett is a genius investor – in stocks. He knows how to read a balance sheet and find value in companies. But he admittedly doesn't invest in what he doesn't understand, and he doesn't "dig" gold.

In May, after gold had taken a serious tumble in April, Buffett said that he would not even buy gold "if it went to $800." Since gold doesn't throw off "earnings" based on cash flow, Buffett seemingly doesn't understand the unique value of gold. But then again, he doesn't buy tech stocks either. He has said that he doesn't understand the details of technology, so he avoids buying most tech stocks.

OK, fair enough. But why try to knock those who understand an investment and have made good money at it, and slept well at night owning a commodity that represents a desirable alternative to paper money?

Buffett answers that gold has "never interested me ... even when it was at $35." In his latest Berkshire Hathaway board meeting, he said that gold "just sits there, and you hope somebody pays you more for it."

Not really. Most gold investors are satisfied to hold gold with the hope that the price does not soar too far too fast, since that would represent a world in crisis, hurting most of their other investments.

Buffett has been wrong about gold for over 40 years, ever since it was $35 per ounce. Even with the recent price correction, gold is still up 35-fold (more than 3,400 percent) at $1,225 per ounce, performing far better than the Dow or Standard & Poor's stock indexes, or bonds, or most other investment options during Mr. Buffett's career.

About the Author: Mike Fuljenz
Mike Fuljenz is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the NLG award winning Michael Fuljenz Metals Market Weekly Report. Discover more by Clicking Here Now.