Warren Buffett and Charlie Munger.
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Charlie Munger called bitcoin “rat poison” to protect casual investors from losses, Guy Spier said.
Warren Buffett’s business partner likely doesn’t tell shrewd investors to avoid crypto, Spier said.
The Aquamarine Fund boss cautioned against copying Warren Buffett and Munger too closely.
Warren Buffett’s business partner, Charlie Munger, branded bitcoin as “rat poison” in 2013. Guy Spier, a value investor and one of the pair’s disciples, recently said on the “We Study Billionaires” podcast that Munger was probably trying to protect everyday investors — and might not be as dismissive of cryptocurrencies as he seems.
“Many people are approaching the world of crypto in not a very smart way,” Spier said. “He’s probably absolutely right that they’re far more likely to lose a lot than they are to make their fortune on a hill.”
Spier compared the crypto space to a busy poker room, and the savviest crypto investors to poker players who maximize their odds of success by joining the right table.
“Maybe there’s only 1% of those tables that are worth playing at, but the people that I know are very likely to find their place,” he said, adding that Munger probably doesn’t tell elite investors to avoid bitcoin at all costs.
Spier, who runs the Aquamarine Fund, partnered with investor Mohnish Pabrai to place the winning bid of $650,000 for Buffett’s annual charity lunch in 2008. While Spier initially tried to copy every aspect of the Berkshire Hathaway CEO’s approach to investing and life, he eventually realized that it wasn’t necessary, and instead focused on developing his own style.
“We’re not going to become good investors by eating peanut brittle and drinking Coca-Colas or Cherry Cokes all day long, even though it’s fun to do,” Spier said, referring to Buffett’s taste for See’s Candies and sodas.
Spier recalled a top investor trumpeting Apple to him during one of Berkshire’s annual meetings in the mid-2000s. The Aquamarine boss dismissed the stock tip as, like Buffett, he largely avoided tech stocks. However, Berkshire built a stake in Apple a decade later, and has more than quadrupled its money on the bet since then.
On a similar note, Spier underlined the difficulty of identifying the best investments today, as they’re unpopular almost by definition. He added that the next generation of winners might seem expensive to the untrained eye, but people who have done their research will realize they’re actually cheap.
“If all you’re doing is looking at the leaders in the S&P 500, you’ve already missed the boat,” Spier said.
Markets, MI Exclusive, Markets, Stocks, crypto, Guy Spier, Aquamarine Fund, Warren Buffett, Charlie Munger, Berkshire Hathaway, value investing, Bitcoin, Apple
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