Bitcoin Is Rat Poison Squared, According To Warren Buffett
Warren Buffett is arguably the best investor of all time. He started with zero and became the richest man in the world. Along with Charlie Munger, he has built the biggest investment empire, Berkshire Hathaway. That’s not an easy achievement by any means. Many have tried and failed where he succeeded.
Some of the strategies that made him so successful are value investing, long-term exposure, understanding the industry, and buying when everyone is selling.
He made his money mostly with banks and junk food industries. Back in the 60s and 70s, these gave the best returns, he made his bets and got rewarded handsomely for it.
But the past doesn’t equal the future…
We live now in a different world. I don’t think investing in Coca Cola or Citibank is a brilliant idea anymore. Times change, technology is disrupting about every sector and what used to be safe is now risky and vice versa.
Take the oil industry for example. Do you think it will thrive in the next ten years? I doubt it.
Environmental concerns, electric cars, and geopolitical instability make this industry extremely risky. Everybody can see this and the money is fleeing fast.
Yet, when the Omaha Oracle was asked in an interview years ago if he would invest in Tesla, he laughed it off, dismissing the question as stupid. Tesla is now worth more than all car companies in the world combined. Oops.
Warren Buffett doesn’t like technology. He never invested in Microsoft, Google, Facebook, or Tesla, and only invested briefly in Apple and Amazon. Too little, too late. He has admitted this was a huge mistake.
Out of the top 10 largest companies in the world by market cap, 8 are in the technology sector. How can you be a great investor and miss 8 of the best deals ever? Even a monkey would have done better by throwing darts at a chart.
Everyone’s an expert in hindsight but still. Companies like Google, Amazon, or Tesla are clearly the future. If you miss technology, you miss everything. It would have been difficult to foresee this 20 years ago, but now…
All Buffett’s successes have been supported by the financial system — banks, governments, investments funds, the Fed — so it’s understandable that he is grateful to them and wants things to continue as they are. If ain’t broke don’t fix it, sort of thing.
The truth is that Warren and Charlie have benefited from bailouts, revolving doors, regulatory agencies, and handouts.
The system might not be broken for him and his mates, but it’s pretty broken for everyone else. Employees are losing purchasing power, taxes are going up, inflation is rampant and everyone (but him) is getting ripped off by the banks.
One of the pillars of his investment career has been the banking industry. He borrowed billions to invest, almost for free, made a fortune, and didn’t pay any tax. He benefited from monopolistic, anti-competitive policies, bailouts, and revolving doors. Meanwhile, you and I were left to pay the bill.
Buffett is right about one thing: Bitcoin is rat poison. And guess who is going to get killed first: the rats.
When you belong to the elite, everything is easy because the system is rigged in your favor, so you do anything to maintain the status quo and keep enjoying the free flowing money into your pocket.
The US Dollar
Buffet investments have been very US-centric. After all, most of the greatest companies in the world are American. The Dollar has been his favorite currency despite the ups and downs and he sees no reason to change that. I’m alright, Jack — sort of thing.
So when a new form of money threatens the supremacy of the mighty greenback, people get nervous and Buffet gets angry. Nobody has more to lose than him with the demise of the almighty dollar. It’s understandable that he will do anything in his power to try and stop that.
When an industry is disrupted by technology, new players come and take over the old guard. We’ve seen it many times — the music industry, the phone industry, the travel industry, the book industry, and so on.
Blockbuster didn’t see Netflix coming. Nokia didn’t see the iPhone coming. The automotive industry didn’t see Tesla coming. Kodak didn’t see digital photography coming… and Warren Buffet didn’t see Bitcoin coming.
Buffett still uses a flip phone. I wonder if he still rents VHS tapes from Blockbusters, uses film photography, or travels by carthorse. Would you invest in any of those?
Bitcoin is rat poison and disgusting according to Buffett and his mate Charlie Munger. Are they right?t or are they too biased and self-serving to accept that a new financial era is approaching fast?
Given Buffet’s background in technology, it’s no surprise that: 1) he doesn’t understand it and 2) he doesn’t like it.
If you offer diamonds to a monkey, he would dismiss them and rather have a banana, it’s only natural. But the best professional investor of all time should make an effort to try to understand the fundamentals of a technology that is threatening to change the world as we know it.
If you are in finance and dismiss a currency that is clearly taking over the world, you are committing financial suicide. Samurais dismissed gunpowder as inelegant. That didn’t work out too well for them.
Bitcoin could succeed or it could fail, but right now, at $1 trillion market cap, it’s the 10th most valuable asset in the world and it could soon replace gold as a reserve currency. Ignoring this is not only irresponsible, it is stupid.
Mr. Buffet, I’ve read all your books and also Charlie’s. I have learned a lot and benefited from your wisdom. But right now, I just can’t comprehend how you and Charlie could be so oblivious to the tsunami that it’s coming.
The dollar is melting, the financial system will be turned upside down, the banks are becoming obsolete. Meanwhile, you chose to stay in denial and drive your investors to the precipice. I just don’t get it.
I’m not saying you are wrong and I’m right. I’m just saying that at least you should study this asset and the probabilities of this new technology succeeding.
Denial is a bad place to be when you are by the sea and a tsunami is coming. You better look for shelter before it’s too late.
I don’t want to dismiss Mr. Buffett as the old Giza who’s lost the plot but…
If somebody missed the Internet, smartphones, electric cars, and China, maybe he will also miss the biggest financial technology ever invented. Just saying.
Warren Buffet and Charlie Munger are the best investors of all time. No question about that.
However, even the best sometimes make mistakes, are blindsided by their own narratives, and suffer from silo effects. But still, there is no excuse.
Mr. Buffett, this time I’m not going to listen to you. I’m going to risk it and buy a little bit of rat poison, don’t worry, I won’t eat it, I’ll put it in a safe place and hold it forever. I rather do that than remain in a sinking ship surrounded by a sea of denial.
I do have a favor to ask you though. Many small investors look up to you and follow your advice. Please, don’t express a strong opinion about something that it’s so foreign to you. You are going to look like a fool in a few years. Maybe you don’t care but I do. For many, Bitcoin is the biggest investment opportunity in their lifetime. A one-off chance to show the 2 fingers to the banks and the financial industry that’s been ruining their life since…forever. Let them have a chance, they’ve suffered enough.
I could be wrong. Maybe it’s me holding on to a sinking ship. But at least I’ve taken the time to study the industry and make an informed decision. I recommend you do the same, Mr. Buffett.
There is a lifeboat available to you and your investors. Get on board before the Titanic is fully submerged. Now it is not too late, but later it will be.
Not financial advice. I leave that to the experts like… Buffet and Charlie…but only in their area of expertise!