Buffett, Bitcoin, and Nonsense

Buffett said if he was offered all the Bitcoin in the world for $25, he would not buy it.

“IF he was offered all the Bitcoin in the world for $25”… What would have to be true
about Bitcoin if Buffett was offered all of it for $25? It would have to mean that no
one who actually owns it thinks it is worth more than $25…

I take the comment this way, which is simpler:
This is an asset that he believes has no merit as an investment: no possible income, no predictable future realizable value.
Others may come to different conclusions, but that’s what Berkshire’s management has concluded–fair enough.
Given that stance, the price on offer doesn’t matter, it’s an unwise allocation of capital at any price.
A purely “Rule #1” line of reasoning: don’t put money into something that you think might be a zero.

Foregoing potential upside isn’t ever a problem–there are always plenty of other investment fish in the sea.

Personally I’m a little more open minded, more along the lines that there’s a price for almost anything.
I’m willing to put small wagers on wildly dangerous securities–but only very small positions.
I would never put meaningful capital at risk in BABA, but I’m happy to take a flutter on a cheap call option at the right price.
There likely isn’t a good case for this habit, as the position size has to be so low that the absolute dollar upside on offer is barely worth the bother.
But it keeps me entertained, at (one hopes) a positive long run return on the small capital committed to this class of thing.

Jim

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The chace, which is an inevitable instinctual thing, will leave crypto and Tesla and go elsewhere. Look elsewhere and be early.

I think argue against bitcoin from ‘value’ point of view is wrong headed, because ‘currency’ and ‘gold’ by themselves also have no or little value. The value resides on ‘belief’ by a significant group of people. In case of ‘currency’, ‘belief’ derives from government authorization. In case of ‘gold’, ‘belief’ derives from thousands of years serving as both currency and wealth storage.

The real argument is that no entity other than the government should be allowed to issue any ‘pseudo’ currency because it undermines the integrity and stability of the financial system, as Charlie said it.

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