Would Warren Buffett Buy Greenland?

One of Warren Buffett’s earliest letters to investors has an interesting way to think about potential sovereign real-estate purchases.


Photo:

rick wilking/Reuters

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.

Write to Spencer Jakab at spencer.jakab@wsj.com

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