Columns · investing

The Oracle of Qaqortoq

On his 89th birthday, I asked a question that the Oracle of Omaha is well-equipped to answer: How would we value Greenland?

Warren Buffett ’s 89th birthday is a good occasion to revisit a question that has been weighing on financial minds lately—what price to put on Greenland.
As far as we know, President Trump hasn’t contacted the Oracle of Omaha on the question of valuation, much less negotiating tips. But one of Mr. Buffett’s earliest letters to investors has an interesting way to think about such outlays. He quipped that Queen Isabella of Spain, who gave Christopher Columbus the equivalent of $30,000 to find the New World, could have instead invested it at 4% interest and had $2 trillion by 1963—nearly $18 trillion today.
Denmark spurned an offer from President Harry Truman of $100 million in 1946 to sell Greenland. It is unlikely that a then-17-year-old Buffett, already a budding value investor, would have made the offer. The same sum invested in the S&P 500 would have compounded since then, with dividends reinvested, to a whopping $163 billion.

Denmark may have missed a huge opportunity, but don’t judge too harshly—the future author of “The Art of the Deal” was only born that year.

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