[BayMoWe335]

I have very few role models, but Charlie Munger is one of them.

The entire talk is worth a listen because the man is utterly brilliant, even at the ripe age of 94, but here is his take on Bitcoin.

Start at 38:44

He might be wrong, but the way he puts complicated things so simply is just genius.

[xQx]

Charlie and Warren got very very rich by understanding _exactly_ what they were investing in; and by sticking to conservative, simple, business models.

These guys gave the dot com a very wide berth too, and missed a lot of opportunity in Microsoft, Apple and the like.

I don't think bitcoin was _ever_ going to be on Berkshire Hathaway's watchlist.

EDIT: To be clear, I'm not saying he's wrong about bitcoin. I agree with his sentiment - IMHO If you're in cryptos right now you're speculating, not investing. I'm saying that asking Warren or Charlie about bitcoin (or any other popular instrument that's been delivering 50+% returns) is a bit like asking the NRA about gun control.

[BayMoWe335]

Originally Posted by xQx

Charlie and Warren got very very rich by understanding _exactly_ what they were investing in; and by sticking to conservative, simple, business models.

These guys gave the dot com a very wide berth too, and missed a lot of opportunity in Microsoft, Apple and the like.

I don't think bitcoin was _ever_ going to be on Berkshire Hathaway's watchlist.

EDIT: To be clear, I'm not saying he's wrong about bitcoin. I agree with his sentiment - IMHO If you're in cryptos right now you're speculating, not investing. I'm saying that asking Warren or Charlie about bitcoin (or any other popular instrument that's been delivering 50+% returns) is a bit like asking the NRA about gun control.

All very true, but it was just interesting to get his take.

For what it's worth, they do now own 134,000,000 shares of AAPL so they wised up.

[KennySRFElite]

I'm one of the many Berkshire B stockholders, it's a marathon, not a race. I've done very well. I dream of Berkshire A shares.
KP

[MKSixer]

Originally Posted by cautjit

I'm one of the many Berkshire B stockholders, it's a marathon, not a race. I've done very well. I dream of Berkshire A shares.
KP

I have a former coworker who's dad left he and his brother about 20 shares of Berkshire A shares back in 2013. Can you say, "Living the good life?"

[BayMoWe335]

Originally Posted by MKSixer

I have a former coworker who's dad left he and his brother about 20 shares of Berkshire A shares back in 2013. Can you say, "Living the good life?"

Nice $6M windfall.

[wdb]

I can't listen right now but I get a whiff of respect for elders. Perhaps there's hope for America after all.

[BayMoWe335]

Originally Posted by wdb

I can't listen right now but I get a whiff of respect for elders. Perhaps there's hope for America after all.

He might be the smartest financial mind living right now and easily the smartest person living over 90.

[uniqueMR]

Buffett and Munger are legends of their era. No one will ever able replace them.

[buzz367]

Its obviously outside of the scope of what Munger and Buffet consider to have value. His answer is no surprise, it goes against what the majority of people over 40 have ever experienced in the financial markets. Crypto is a young man's game at this stage it seems. People don't understand it so they are discounting it more than they should be perhaps.

For the record, I agree crypto is an insane bubble that will burst, but I also think the long term prospects for the whole system are definitely there. In the mean time, make hay while the sun shines with as much money as you're willing to lose!

[BayMoWe335]

Originally Posted by buzz367

Its obviously outside of the scope of what Munger and Buffet consider to have value. His answer is no surprise, it goes against what the majority of people over 40 have ever experienced in the financial markets. Crypto is a young man's game at this stage it seems. People don't understand it so they are discounting it more than they should be perhaps.

For the record, I agree crypto is an insane bubble that will burst, but I also think the long term prospects for the whole system are definitely there. In the mean time, make hay while the sun shines with as much money as you're willing to lose!

Munger is insanely smart though. Don't doubt his ability to understand something like this at a fundamental level. You don't need to understand the computer science behind it necessarily.

[xQx]

Originally Posted by BayMoWe335

Munger is insanely smart though. Don't doubt his ability to understand something like this at a fundamental level. You don't need to understand the computer science behind it necessarily.

I don't doubt that - but he makes a blanket statement in the attached video which is untrue and demonstrates he doesn't understand bitcoin - I expect, because he doesn't want to.

He says 'you can't believe no new bitcoin will be created. The incentives to create more coins is too great. Someone will find a way.'. This is untrue.

Without a hard-fork, it is technically impossible for anybody to make more bitcoin. There IS nothing stopping an almost unlimited supply of bitcoin clones.

Litecoin and Bitcoin Cash are perfect examples of bitcoin clones, which are superior in some ways (transaction times & fees), but inferiour in others (after 10 years of operation the size of the blockchain might be unmanageable).

The _only_ thing Bitcoin has ahead of all the altcoins is the Bitcoin "brand". Time will tell if that's worth $500, $5,000, or $50,000.

IF Charlie had taken the time to wrap his head around blockchain, he would've said something along the lines of:

[introduction basically the same as what he said. There's a lot of noise in life, it's a fad, it's a bubble, stay away.]

It's interesting. It's got a lot of potential. Gold is only worth something in the modern era because we've collectively agreed that it is a valid store of value. If the world turned its back on Gold and it was suddenly rated at utility value only, it would be worth a fraction of what it is today. If you think about countries which use USD to trade in rather than their local currency, there's the potential for these digital coins to replace USD, which is going to be very interesting.

But the technology behind Bitcoin is what is valuable, bitcoin in its self is not. The scarcity of Bitcoin which everyone is investing in is artificial, because the technology can be duplicated, and has been already in many "altcoins". Because all you're investing in is the Bitcoin brand, and its value is 100% determined by everybody's faith in that brand and not actually by a unique underlying product or protected market position; you are not value investing, you are either trading the pattern, trading the sentiment or outright speculating.

Berkshire Hathaway got to where it is today because we ignored all this sort of noise, and invested in assets which held an underlying value. I challenge anyone in this audience to tell me how they've calculated the underlying value of Bitcoin with the sort of confidence that one would with say, Coke.

[BuiltnBoostedZ]

The systems, markets, currency, credit....only work if you believe in them. If you look at the most basic ideas of these things, crypto is no different. Ever dollar you spend now is imaginary. Every stock you buy is imaginary. All your debt is imaginary. If everyone collectively stop believing paper money is valuable...it'll just be paper. Much like the Gold reference in a previous post. Will it boom or will it fail? That depends on how many believe in the system.

[wdb]

Originally Posted by BuiltnBoostedZ

The systems, markets, currency, credit....only work if you believe in them. If you look at the most basic ideas of these things, crypto is no different. Ever dollar you spend now is imaginary. Every stock you buy is imaginary. All your debt is imaginary. If everyone collectively stop believing paper money is valuable...it'll just be paper. Much like the Gold reference in a previous post. Will it boom or will it fail? That depends on how many believe in the system.

Not quite. I buy Coke stock because I have faith in the company to create value. I buy treasury notes because I trust that the government will see to it that the interest will be paid. Bitcoin has no underlying construct upon which I can put my trust. It's a ghost, a wisp of ether, hoping against all logic that it's self-induced scarcity will somehow create value.

[BayMoWe335]

Originally Posted by BuiltnBoostedZ

The systems, markets, currency, credit....only work if you believe in them. If you look at the most basic ideas of these things, crypto is no different. Ever dollar you spend now is imaginary. Every stock you buy is imaginary. All your debt is imaginary. If everyone collectively stop believing paper money is valuable...it'll just be paper. Much like the Gold reference in a previous post. Will it boom or will it fail? That depends on how many believe in the system.

Totally wrong. Companies produce real output. Bitcoin is literally worthless besides peoples’ belief it will go higher. It also ignores the fact a better system can supplant bitcoin or current cryptos as the new digital currency which will send competing cryptos to zero.

I believe there will be one crypto currency and probably will be created by banks or governments. Good luck picking the winner.

[Mr Carrots]

Bank crypto? That sounds like ripple, lol. Not that its done much lately.

Basically its a game of chance and being in on trends early enough. Some of my coins went up 20 x , some barely moved.

Only invest what you can stand to lose and read the forums the Kids read