The Jar On The Shelf
Choosing participation over disappearance
Gold and silver may have caught your attention recently as their prices experienced a meteoric rise. Or caught your eye during a precipitous fall. Or turned your head as they surged anew.
And with Bitcoin, the so-called “digital gold,” maybe it was the silence that grabbed you as it skipped the rise and almost halved in price, with nary a peep from its devotees.
Curious about the hullabaloo? Or wondering whether these assets hold the keys to retirement?
The answers might be found in a glass jar, along with two Nobel medals in a chemistry lab in Denmark.
The Jar on the Shelf
In 1935, while imprisoned in a Nazi concentration camp for exposing Germany’s secret rearmament, Carl von Ossietzky was awarded the Nobel Peace Prize. Hitler became so enraged he banned all Germans from accepting Nobel Prizes going forward.
Five years later, when Germany invaded Denmark, Hitler’s proclamation created a deadly dilemma. The Niels Bohr Institute in Copenhagen was safeguarding two solid-gold Nobel medals engraved with the names of German physicists: Max von Laue, who had openly opposed Nazism, and James Franck, who was Jewish.
Once symbols of honor, discovery likely meant death.
Fortunately for von Laue and Franck, a senior chemist named George de Hevesy was employed at the Institute. Raised Jewish before converting to Catholicism, de Hevesy understood the risks, especially for Franck. Nazi raids had a way of finding everything. He knew the medals shouldn’t be locked away or even buried.
De Hevesy chose a novel, and perhaps only, approach to saving the two men: making the medals disappear.
Gold is famously unreactive. But de Hevesy, whose life’s work focused on chemical transformations, knew it could be dissolved by using a precise combination of nitric and hydrochloric acids.
He filled a glass jar with the acids, added the medals, and watched as they dissolved into a bright orange liquid. Next, he placed the jar high on his laboratory shelf, alongside dozens of other jars, in plain sight.
After the war ended in 1945, de Hevesy returned to his laboratory and found it in disarray. Sitting exactly where he left it was the jar. Untouched.
He reversed the chemical process, precipitating the gold back into solid form. He then delivered the gold to the Royal Swedish Academy of Sciences in Stockholm, where it was recast into new medals and re-engraved with the original names.
In 1952, the Nobel Prizes were awarded for a second time to von Laue and Franck.
Gold survived by vanishing.
Two men survived because de Hevesy refused to disappear.
The Chemistry of Investing
De Hevesy combined acids to transform those medals. The chemistry of investing is less exact but similar, combining a range of investments into a portfolio tailored to individual circumstances.
The bedrock of optimizing this risk/return combination is productive assets: stocks, bonds, and real estate.
Why?
Because productive assets are tethered to economic activity. Stocks generate profits. Bonds provide interest. Real estate produces rents. Fundamentals fluctuate with the economic cycles, but prices remain anchored to the value these assets produce.
Today and tomorrow.
That’s not to say that productive asset prices are immune from periodic and sometimes severe declines. They are. It’s just during market downturns, human ingenuity doesn’t stop. In a portfolio of thousands of companies, less productive ones disappear. Newly productive ones take their place. Maturing bonds disappear. New issues take their place. The ongoing process of disappearance and reappearance allows them, as a whole, to renew and compound over time.
Gold, silver, Bitcoin, commodities, and currencies are non-productive assets. They offer no cash flows or earnings; no dividends, interest, or rents. Prices are not tethered to activity, but to sentiment—the belief that someone else will pay more tomorrow. When that belief fades, the floor disappears.
As a result, the prices of non-productive assets tend to be erratic, experiencing spectacular volatility in the short run and stagnant performance over the long run.
On the final day of January, silver crashed 31% and gold plunged 11%. Yet, both remain up nearly 20% year-to-date. Silver has moved more than 2% in a single day twenty-four times since the year began.
Digital gold has fared worse. Bitcoin lost 13% in January alone. It is down 20% in the last three months and nearly 50% since setting a new high only four months ago.
Such is the nature of fast-up, fast-down assets.
The intellectual toll is alarming. The emotional toll is nauseating.
History suggests the toll rarely pays off.
In 1980, gold hit a high of $850 and silver peaked near $50. Twenty years later, in 2000, gold sat at $280 and silver at $5. Most investors would have lost confidence. Some might have lost sleep. Those who held on lost 80% in purchasing power over two decades.
“An investment is only as good as our ability to avoid bad choices while we own it.”
Today, gold hovers near $5,000 an ounce. Silver is close to $80, nowhere near its inflation-adjusted price of $190.
Yet, gold’s ascent is a matter of perspective. What if you had sold an ounce of gold and bought into the productive assets of the S&P 500 Index in 1980?
You’d have roughly $150,000 today.
The point isn’t to pick on these non-producers. It’s not personal. Gold has centuries of history. Silver has industrial demand. Bitcoin is a legitimate financial phenomenon. None of them are going away.
It’s just that when mixing assets in the jar of your portfolio, it’s prudent to forgo the ones that let purchasing power vanish. Steer clear of assets that don’t lift return but impose a tax: an emotional one.
Productive assets remain the keys to retirement. Not because they avoid volatility, but because they reward long-term participation—delivering the growth that non-productive assets historically have not.
Participation Over Disappearance
Gold survived by disappearing onto a shelf, waiting for time to pass. Three men, brought together by Nobel medals, did not. They could have withdrawn. Instead, they continued to participate, to contribute, and to shape the future.
James Franck emigrated to the United States and became a professor at the University of Chicago. During WWII, he worked on the Manhattan Project and co-authored the Franck Report, urging restraint on the unannounced use of atomic weapons. He lived until 1964.
Max von Laue remained in Germany despite being watched closely. After the war, he stayed engaged in rebuilding German science, helping restore institutions rooted in openness and humility. He died in 1960, widely respected for his principled resistance.
After fleeing Nazi-occupied Europe, George de Hevesy settled in Sweden. In 1943, he was awarded the Nobel Prize in Chemistry. After the war, he returned to academic life, making contributions until his death in 1966.
These three Nobel laureates acted with moral conviction and created lasting value. They were productive assets in the deepest sense.
May we too choose participation over disappearance.
In our portfolio.
In our life.