Berkshire Annual Meeting Notes – 2 (Bitcoin)

By | May 14, 2018

This shouldn’t come as a surprise – Warren and Charlie don’t recognize Bitcoin as an investment medium. This is the modified version of how Charlie phrased at the meeting. The direct quote from Charlie was “trading Bitcoin is like trading turds”.

Indeed, the “value” of Bitcoin is solely depending on how much the next buyer is willing to pay for it. If you hold a position in Bitcoin, you can’t eat it, you can’t use it (without losing part of the principal), you can’t even touch it (which makes it even ranked behind physical gold bar, which you can fondle from time to time at your basement). It is a form from underlying Blockchain technology. It may be revolutionary – as many Bitcoin enthusiasts say – but Check or Money Order was also once revolutionary – as a form of payment other than cash. If you invest in a Check producing company at the time, you are less likely to be like Warren Buffett as a successful investor over the long run.

Bitcoin, or any crypto currencies, may make payment services much faster, safer and less expensive. It may enable Banks or Money Transmitting services (MoneyGram or Western Union) offer much better service at a fraction of the cost and time to wire money. It may have some other unique P2P exchange mechanism, that’s what makes them still relevant, not completely regarded as pure garbage. However, even Bitcoin itself limited in number, you can literally introduce unlimited number of crypto currencies, which makes the whole argument of limited supply obsolete.

In anyways, focusing your resources and energy on something that can produce income over time, and own these stuff at a sensible price. That is called value investing. That will make you ultimately successful in this business.

This will be the last time we dedicate any resource or time on Bitcoin or crypto currencies in general.

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