Investors have a trend of following what is hot, and one method of buying good stocks is by “whale hunting.” This is where investors follow the same stocks as the stock market mavens. For those who are chasing the next thing, there may be no larger whale than Warren Buffett.

Berkshire Hathaway Inc. (NYSE: BRK-B) released its full equity portfolio on Friday after the markets closed. On top of showing sales in many bank stocks, the biggest surprise was that gold-mining giant Barrick Gold Corp. (NYSE: GOLD) was a new position. Buffett has never been that much of a real gold bug himself. After all, gold may not be as imperative to the economy on a daily basis as some might suggest, and the shiny yellow metal itself pays no dividend, and it is hard to say where the true value is.

While a total position of about 20.92 million shares worth about $563 million as of June 30 is a lot of money for anyone but the mega-billionaire members, this is a small drop in the bucket for Buffett. In fact, the more than $200 billion portfolio had a 71% concentration spread over only four stocks.

With a position of $563 million, the first instinct was to think that this was purchased by one of Buffett’s portfolio managers rather than as a big new position that Buffett came up with on his own. But, looking at the two entities within the Berkshire Hathaway umbrella, Warren E. Buffett was listed twice and the National Endemnity Co. subsidiary was the other entity listed within the larger block of shares.

One question is why Buffett’s team chose Barrick Gold over Newmont Corp. (NYSE: NEM). After all, Newmont has generally been the larger of the two gold miners by market cap. It is still a very close race, and Newmont’s revenues of $9.74 billion in 2019 and Barrick’s revenues of $9.71 billion also are quite close. Newmont’s operating income of $1.541 billion compares with Barrick’s 2019 operating income of $2.481 billion. The reality is that Newmont looks better on some metrics than Barrick, while Barrick looks more attractive on others.

While Newmont has had a higher market cap for some time after each company made their big mergers in early 2019, both Barrick and Newmont were last seen at between $52 billion and $53 billion in market cap. The reason was because Barrick’s stock gain was over 10% on the post-Buffett news, while Newmont and the other gold-mining stocks generally were up closer to 3% or 4% on Monday morning.

Buffett loves to receive dividends, even if he won’t pay one out himself. Newmont has a better dividend yield than Barrick, at about 1.5% and 1.1%, respectively.

Barrick’s second-quarter earnings release noted that its net debt was down almost 25% to $1.4 billion and that it had no significant maturities until 2033. Barrick’s realized gold price in the second quarter averaged $1,725 per ounce, with an all-in sustaining cost of $1,031 per ounce. Barrick’s second-quarter operating cash flow exceeded $1 billion and its free cash flow was $522 million.

Newmont’s averaged realized gold price was $1,724 per ounce in the second quarter of 2020, but gold production was down due to coronavirus lockdowns causing temporary closures at some of its mine sites. Its all-in sustaining costs were $1,097 per ounce in the second quarter, and Newmont generated $668 million of cash from continuing operations and $388 million of free cash flow. On its balance sheet notes, Newmont ended its June quarter with $3.8 billion and listed approximately $6.7 billion in total liquidity.

Buffett and his team could have looked at other metrics in determining that they should own Barrick rather than Newmont, but in the end it just could have boiled down to picking the slightly smaller market cap. While this sounds crazy, Buffett’s team choosing all the major airlines (and Buffett making an addition himself) could even make the answer simply a guess or a coin toss.

As for Buffett’s long-term disdain for gold, what if the team at Berkshire Hathaway Inc. (NYSE: BRK-A) just thinks the future math now looks favorable? With all-in sustaining costs closer to $1,100 per ounce and current prices still above $1,950 per ounce, there might be a lot of future cash flow that was just too good to pass up on.

Shares of Barrick were up 11.5% at $30.10 on Monday. They have a 52-week range of $12.65 to $30.69, and the market cap is $53.6 billion. Newmont shares traded up 4.4% to $66.70, in a 52-week range of $33.00 to $72.22 and with a $53.5 billion market cap.

Where the big move was seen was in the VanEck Vectors Gold Miners ETF (NYSEARCA: GDX), which was up 5.5% at $42.56. That pulled up all the mining stocks that are inside the fund. This exchange-traded funds has a 52-week range of $16.18 to $45.78. Newmont and Barrick are the largest components, with a 13% and 12% weightings, respectively.

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