By SHEFALI ANAND

Is this a good time to buy gold?

Not according to the world's third-richest man, Warren Buffett . In fact, Mr. Buffett doesn't care for gold as an investment at all, he told an audience of around 500 people in New Delhi on Friday night, even though gold is the favored investment for millions of Indians.

Mr. Buffett said that gold, oil and art are investments that don't produce any income or product. So, investors who buy these are counting on them becoming more attractive to other people in the future. "That's a whole different game" compared to investing, said Mr. Buffett.

He said if all the gold in the world could be condensed, it would be a cube which was 67 feet on all sides -- enough to fit a large auditorium. But what can you do with this cube? "You can fondle it," said Mr. Buffett, or stare at it, but it will not produce any returns. "You're betting on the price of the asset not on the productivity of the asset," said Mr. Buffett.

He said he preferred to bet on assets that are productive, like stocks of companies or farm land which produces crops.

These productive investments have helped the 80-year-old create vast wealth for himself, valued at nearly $50 billion, according to Forbes magazine.

Mr. Buffett shared some of his other investment mantras:

Picking the right stock

Mr. Buffett reiterated that he relies on principles taught by his guru, investor Benjamin Graham, who looked for stocks which were cheap compared to their worth. (Of course, the key is to figure out what the stock is worth, which is a subjective decision.)

Mr. Buffett said he doesn't look at sectors to identify stocks.

Instead, he looks for companies whose business he understands, and where he sees income and growth potential for the next five, 10 or 20 years.

He gave the example of Coca-Cola , one of his holdings. What are the chances that Coca-Cola will be selling more products over the next several years? "It's almost a certainty," said Mr. Buffett.

In comparison, he has stayed away from some technology and social media companies like Twitter or Facebook, which operate in a fast-changing world where the future is not clear to him. Some of these companies will be very big winners but "most of them will turn out to be overpriced," said Mr. Buffett.

He said he doesn't have to be a part of all successful companies – he looks for only a few good investing ideas.

When to sell a stock?

This, he said, is a harder decision than buying a stock.

Mr. Buffett typically holds on to stocks for years and years. "I don't feel like I have to grow rich in the next day or week," said Mr. Buffett. He said that investors who track stock prices daily are being "just foolish."

If they had bought a farm or an apartment, they would not expect it to appreciate the next day but over a period of time. Why treat stocks differently?

He added that while there's no law against speculating, those investors would "make more money if they don't trade as much."

Mr. Buffett said he would sell a stock only if some better investment opportunity came about, or if something changed at the company, such as its management, which he didn't approve of.

Get the investing mindset

A good investor needs reasonable intelligence and a passion for investing, said Mr. Buffett.

More important is the ability to look at the facts of an investment and evaluate them without getting influenced by what other people think. "You can't get excited because other people are excited," said Mr. Buffett.

He said that humans are susceptible to believing that something that has happened in the recent past will continue to go on. So, every now and then, there's a craze to buy something even at very high, irrational prices. "Then all of a sudden, the music stops," said Mr. Buffett, and the investment comes crashing down.

The key is to detach yourself from such a craze. Of course, that's easier said than done.

The importance of being comfortable

Mr. Buffett usually keeps a few billion dollars as a cash cushion or "margin of safety" at his company, Berkshire Hathaway Inc., in order to tide over any potential economic or other crises. That margin also allows him to buy businesses which may become attractive during a downturn, he said.

Personally, he said, he doesn't keep much cash but says individuals should hold as much cash in their portfolio as would keep them comfortable during tough times.

"Some people might do something very foolish if they didn't have cash around," said Mr. Buffett, presumably referring to selling stocks after they have lost a lot of value.

Why stocks matter?

To fight inflation.

"Inflation is a very cruel tax," said Mr. Buffett, because it lowers the worth of your paper money.

He said one of the best ways to keep the value of your money growing is to invest in good businesses and companies which keep growing. That helps investors "maintain purchasing power no matter what happens to the currency," said Mr. Buffett.

He advised against buying long-term bonds of any government, because both inflation and printing of new currency lowers the value of these investments.

The only better way to beat inflation, he said, is when individuals improve their earning power through further education and skills. "Maximize your talent," said Mr. Buffett.

Write to Ms. Anand at shefali.anand@wsj.com, or follow her shefalianand .

Write to Shefali Anand at shefali.anand@wsj.com

Buffett Warns: The Dollar Will Decline

Buy big British businesses -- not bonds.

Let the word go forth: On Friday, March 25, 2011, Warren Buffett predicted the decline of the U.S. dollar.

In a speech given in New Delhi (where he's hunting up some cheap Indian stocks), the chairman of Berkshire Hathaway warned investors to avoid "long-term fixed-dollar investments" such as 10-year U.S. Treasury bonds. Buffett worries that the $2.3 trillion in new money our government has pumped into the economy, when combined with interest rates so low they're practically giving money away, are combining to dilute the value of the dollar.

As a result, Buffett warns: "If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not."

What's more, he's matching actions to words. Over the last couple of years, Buffett has been selling off longer-dated bond holdings, shifting assets into cash and shorter-dated paper. Berkshire's holdings of debt dated longer than 10 years dropped 31% over the past 18 months, while Berkshire's cash holdings leapt 56%.

What's it mean to me?
Of course, if you're visiting the Motley Fool, you may not care too much about bonds. By and large, Fools are a stock-focused folk -- but Buffett's musings on the value of a greenback have implications for companies, too.

Consider for a moment what a weak dollar means for companies like Intel and Cisco, which sell high-tech goods around the globe. The weaker the dollar gets relative to currencies in other countries where the companies operate, the cheaper their wares start looking to foreign buyers. Plus, when paid in foreign currency, profits earned outside North America buy many more greenbacks once repatriated to U.S. shores -- boosting dollar-denominated profits.

It's also interesting to see what these companies are doing with their cash. Quick! When a company has cash on hand, what does it usually do with it? That's right -- it invests the cash, either in short-term paper (so short that it's often denoted "cash and equivalents"), debt of slightly longer duration ("short term investments"), or in longer-term debt. And if you take a look at their balance sheets, both Intel and Cisco are practicing what Buffett preaches: Intel keeps more than twice as much "cash" on hand ($16.8 billion) as it stores in long-term investments. Cisco has a whopping $40.2 billion of its wealth parked in shortish-term investments -- and just $873 million invested in longer-term securities.

What's an investor to do?
Figuring out where to park a spare $40 billion to keep its value from eroding -- that's a problem a lot of us wouldn't mind having. But fear not, intrepid investor. Buffett believes you're still better off putting money in stocks than in any other investment today. Because "it's very easy to take away the value of fixed-dollar investments," intones the Oracle of Omaha, "I would much rather own businesses."

Why? Well put yourself in the CEO's chair once again. When you see the value of the dollars that you get for your goods shrinking, what do you do? Demand more dollars. Raise prices. Profit from inflation.

Great minds think ... similarly
This echoes comments made by hedge fund guru John Mauldin in his recent book Endgame. You see, whether it takes his projected "5 years, 10 years or 20 years," Buffett believes the U.S. government must ultimately inflate the U.S. dollar in order to reduce its debt burden and increase its exports. For now, the Fed denies having any such intention, but not everyone has such compunctions -- so why wait for the U.S. Why not start investing in companies profiting from inflation today?

As the U.S. dithers on how to simultaneously deal with its debt while performing emergency surgery on a weak economy, Mauldin sees our cousins across the pond embarked upon a full-scale assault on the value of their own currency. As the Bank of England works to cut spending and "inflate away" its debt, Mauldin muses that "the combination of loose monetary policy and tight fiscal policy should be bad for sterling but good for U.K. large-cap stocks."

Don't buy bonds. Buy big British businesses
Taking Buffett's advice, and Mauldin's, to heart, I've run a few numbers on a few of these UK-based businesses for you. Here are just a few

opportunities that caught my eye:

Seems to me, the U.K. market offers a little something for everyone. Dividend seekers can happily cash 5.9% dividend checks from National Grid. Growth seekers will thrill to the near-17% hypergrowth at ARM. Bargain hunters will no doubt love the ultra-low P/E at AstraZeneca.

Seriously, folks -- with stocks this good, who needs bonds?