[2018-02-15] Warren Buffett’s longtime sidekick says Bitcoin is ‘noxious poison’

[fonenumba]

Bitcoin’s surge to fame and fortune this year has forced the question of whether cryptocurrencies are viable out of Reddit threads and into the world of mainstream finance. It’s become the most-asked question of any serious investor or analyst, and the opinions range from “this might be interesting” to something a lot less polite.

As it turns out, you can put Charlie Munger, the vice chairman of Berkshire Hathaway and Warren Buffett’s long-time number-two, in that second category. During a question-and-answer at a shareholder meeting for the Daily Journal, a LA publisher that he’s the director of, Munger called Bitcoin “totally asinine” and a “noxious poison.”


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CNBC reported Munger’s comments, which came in response to a question asked at the shareholder Q&A. He labelled the current Bitcoin price explosion as “totally asinine,” and said that the currency itself is “noxious poison.” So, not a fan.

Buffett himself isn’t a fan of crypto either, although his opinion appears to be a little more nuanced. “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” the chairman and CEO of Berkshire Hathaway told CNBC last month.

“When it happens or how or anything else, I don’t know. If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”

http://bgr.com/2018/02/14/bitcoin-warren-buffett-quote-reddit-charlie-munger/

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[bbc.reporter]

Yes, it's a noxious poison because they are not holding it. If they did, I reckon they would be its biggest supporters in Wall Street.

Also, I'm starting to doubt in how Warren Buffet is presented by the media. I do not reckon he reached his status purely because he is a good investor. I speculate that it's also possible that he can be Wall Street's biggest market manipulator.

[secondgarlic]

Why is Warren Buffett like this? I mean a lot of the major players in the current economic environment are against bitcoin, but Warren Buffett appears to hate bitcoin with a passion, and I can't explain why this is the case. Perhaps he had a bet with one of his wealthy investor friends regarding what the price is going to be, so he is trying to manipulate the price as a goof?

[tee-rex]

Buffett himself isn’t a fan of crypto either, although his opinion appears to be a little more nuanced. “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” the chairman and CEO of Berkshire Hathaway told CNBC last month.

“When it happens or how or anything else, I don’t know. If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”

Buffett is obnoxiously famous for his elusive answers which basically come down to simple "I don’t know". It seems to have become his trade mark or distinguishing feature. Whenever someone asks him a loaded question, he is quick to react in this way. But let's give him credit he has some understanding of the markets after all even if he represents "old money".

[Appuned]

Yes, it's a noxious poison because they are not holding it. If they did, I reckon they would be its biggest supporters in Wall Street.

Also, I'm starting to doubt in how Warren Buffet is presented by the media. I do not reckon he reached his status purely because he is a good investor. I speculate that it's also possible that he can be Wall Street's biggest market manipulator.

That is right. Buffet buys things that could give him foreseeable cash flow. The bitcoin or Bitcoin Cash could not provide that.

[Samarkand]

Why is Warren Buffett like this? ...

The linked article refers to Munger (an associate of Buffett) and not Warren Buffett himself.

He did make the same claim in 2013 (http://www.valuewalk.com/2013/05/charlie-munger-bitcoin-rat-poison/) when
Bitcoin was trading for less than 2 % of its current value. He missed out on the investment of his
- and likely our - lifetime and therefore it is obvious why he is using pejorative language like this.

[aso118]

Traditional, old-school finance professionals just don't seem to get a handle around Bitcoin. That is why they feel that it is something to be avoided. By calling it a noxious poison,  Charlie Munger expresses his disdain for it and hopes that others will come around to the same view.
It is funny that people like Warren Buffet and Charlie Munger feel the need to comment on Bitcoin, even though they think it is not important.

[cr1776]

Bitcoin’s surge to fame and fortune this year has forced the question of whether cryptocurrencies are viable out of Reddit threads and into the world of mainstream finance. It’s become the most-asked question of any serious investor or analyst, and the opinions range from “this might be interesting” to something a lot less polite.

...

This year?  Last year for sure, and pretty much ever year since 2009, but so far 2018 is the exception!

If they’d ‘bought’ in July 2010 (or before or quite a while after) their rate of return would’ve dwarfed that of BRK

[Xavofat]

Yes, it's a noxious poison because they are not holding it. If they did, I reckon they would be its biggest supporters in Wall Street.

Well, not buying an asset which they're aware of would imply that they don't think it's a good investment opportunity for them.  Expressing this certainly doesn't classify as "market manipulation" by itself.

Since Warren Buffet hasn't spread objectively false information, it would be unreasonable to assume that he's manipulating the market.

Regardless, this isn't Warren Buffet himself.  He can't be guilty by association - he hasn't done much other than express his skepticism about the price.

[Mikhail 777]

What else does this old man from the last century have to do?) Except for pouring poison) if he saw this technology ten years ago and put his money into bitcoin, he would not have said so now)

[tee-rex]

What else does this old man from the last century have to do?) Except for pouring poison) if he saw this technology ten years ago and put his money into bitcoin, he would not have said so now)

Warren Buffet is not a speculator. He is what is called value investor, someone who doesn't invest in assets which are driven and can generate profits only through hype and ballyhoo. Apart from that, it is easy to be wise after the event. Obviously, anyone in his right mind would buy bitcoin in 2009 if he knew for certain that the price would rise as high as it did. But this has nothing to do with investing or even speculating which involves a great amount of risk.

[1Referee]

We just have to accept that they either don't want to be part of a technological advancement, or just can't see the importance of a completely new multi trillion dollar asset class. Bitcoin and basically crypto in its entirety throws all traditional market values in the bin like it's nothing, and that's a bitter pill to swallow for these dust farters. If we're like 10-20 years away from now, we're living in a completely different world, different economy standards, different valuation standards, which is something Buffet & Co will probably not be able to deal with. Nokia has always been the absolute king in GSM land years ago, where they kept refusing to adapt to the newer standards and requirements of a rapidly changing world, which resulted in them sinking to the lowest possible bottom. It's perhaps a bit off as comparison, but it just indicates how important it is to adapt to the newer standards, regardless of who you are.

[tee-rex]

We just have to accept that they either don't want to be part of a technological advancement, or just can't see the importance of a completely new multi trillion dollar asset class. Bitcoin and basically crypto in its entirety throws all traditional market values in the bin like it's nothing, and that's a bitter pill to swallow for these dust farters. If we're like 10-20 years away from now, we're living in a completely different world, different economy standards, different valuation standards, which is something Buffet & Co will probably not be able to deal with. Nokia has always been the absolute king in GSM land years ago, where they kept refusing to adapt to the newer standards and requirements of a rapidly changing world, which resulted in them sinking to the lowest possible bottom. It's perhaps a bit off as comparison, but it just indicates how important it is to adapt to the newer standards, regardless of who you are.

There were quite a few companies in the past that had kicked the bucket unable to change and adapt. But does it mean that just on this account you can actually say something like "Bitcoin and basically crypto in its entirety throws all traditional market values in the bin like it's nothing"? Bitcoin doesn't create anything on its own, you still need factories and farms to produce goods and foods. Buffet & Co chose to stick to "traditional market values", not to Bitcoin and crypto. These values are here stay, whether you like it or not.

[cellard]

Yes, it's a noxious poison because they are not holding it. If they did, I reckon they would be its biggest supporters in Wall Street.

Also, I'm starting to doubt in how Warren Buffet is presented by the media. I do not reckon he reached his status purely because he is a good investor. I speculate that it's also possible that he can be Wall Street's biggest market manipulator.

Warren Buffet made his wealth by basically getting in at the bottom of the stock market itself... then he just held long time. He has been wrong in the past about many other investments, but he's seen as a god by most people because they only see the ratings on Forbes.

Bitcoin is subversive in it's nature and some people can't see the value on that. His whole empire depends on the well being of the USD and he knows Bitcoin can be a threat to it at some point, so he isn't going to support something unless he got in at the bottom.

[tee-rex]

Yes, it's a noxious poison because they are not holding it. If they did, I reckon they would be its biggest supporters in Wall Street.

Also, I'm starting to doubt in how Warren Buffet is presented by the media. I do not reckon he reached his status purely because he is a good investor. I speculate that it's also possible that he can be Wall Street's biggest market manipulator.

Warren Buffet made his wealth by basically getting in at the bottom of the stock market itself... then he just held long time. He has been wrong in the past about many other investments, but he's seen as a god by most people because they only see the ratings on Forbes.

Bitcoin is subversive in it's nature and some people can't see the value on that. His whole empire depends on the well being of the USD and he knows Bitcoin can be a threat to it at some point, so he isn't going to support something unless he got in at the bottom.

I'd say that his empire is built on the US economy rather than the US dollar as such. Basically, for him it doesn't matter what the USD exchange rate is as long as the American economy is kicking. I don't he holds any important amount of his wealth in dollars or other fiat currencies. If the US economy prospers, so will Buffett and his investments.

[coolcoinz]

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Yup, that's a very important piece of information. So worthy of the news section You've posted this without reading the content, haven't you?

On topic, Buffet's team looks so angry about all the new millionaires popping out thanks to cryptocurrencies and about them missing the train back in 2013-2016 when the prices were so low they could have multiplied their fortune. They are probably putting some money into anti Bitcoin propaganda along with the banks. It won't work though. In time they will lose credibility.

[Samarkand]

....

On topic, Buffet's team looks so angry about all the new millionaires popping out thanks to cryptocurrencies and about them missing the train back in 2013-2016 when the prices were so low they could have multiplied their fortune. ...

I don´t think cryptocurrencies were ever a potential way to multiply the money for people, who are as wealthy
as Buffett. You have to remember that the market cap of Bitcoin was less than 10 billion $ at this point and there
is no way someone as wealthy as Buffett could have invested a non-negligible amount of money in a market
that used to be as tiny as Bitcoin was back in the day.

There is a reason why he doesn´t invest in pennystocks either and rather owns stocks like Coca-Cola.
He needs something with a high market cap, because it simply is unfeasible for someone as wealthy as Buffett
to invest in low market cap investments.

[tee-rex]

On topic, Buffet's team looks so angry about all the new millionaires popping out thanks to cryptocurrencies and about them missing the train back in 2013-2016 when the prices were so low they could have multiplied their fortune. They are probably putting some money into anti Bitcoin propaganda along with the banks. It won't work though. In time they will lose credibility.

I don't think they are so much angry at bitcoin or anything to that tune. They might rather get angry at people who are constantly nagging them with silly questions about crypto. Well, what they can think silly. Besides, thinking that they can be putting some money into antibitcoin propaganda is completely beyond the limits of reason if you ask me. It is likely just your perception bordering on wishful thinking.

[btc_angela]

What do you expect from both of them? They really don't understand how crypto is and how they can earn money from it (which Warren B. is very good at), but bitcoin is not their cup of coffee. So it really makes sense for them to bash it because its either they miss the boat or they really hate something that is purely speculative.

There's also a trend that those who are attacking bitcoin really thought in the beginning that it will just go down and crashed. Unfortunately they have missed the opportunity to profit millions that's why they don't like to join the bandwagon today and will try their best to bring it down.

[tee-rex]

What do you expect from both of them? They really don't understand how crypto is and how they can earn money from it (which Warren B. is very good at), but bitcoin is not their cup of coffee. So it really makes sense for them to bash it because its either they miss the boat or they really hate something that is purely speculative.

Bitcoin might not be their cup of tea, of course, but even if it were it is just too small for the investors of their scale as Samarkand correctly pointed out in his post above. They have been in the business for many decades, actually for half a century already, and they don't buy hype. What crypto could give them really? They would be wasting their precious time with it if not money, and precious should read literally here given their age.