The gorge between the investment world seems cavernous to me on the eve of the Berkshire Hathaway (BRK-A) pilgrimage so many millionaires make each year, and god bless them as they bask in the riches for the risks they took 10 or 20 years ago.
You always hear the catcall of if you had invested $1000 in Berkshire 10 years ago, it would be $1M today, yes, if anyone invested in 2009 at the bottom of the investment cycle fading a TARP bailout you would have bought the bottom of the move in stocks.
But you would have been one of the few buyers, in fact, it took Uncle Sam, and Berkshire Hathaway to bail out an economy (The big banks) on the brink of collapse into a housing crisis of epic proportions, where broker led greed eliminated Bear Stearns and Lehman Brothers, and it is no surprise that 2009 was when Bitcoin started to gain real traction amoung investors as the public (baby boomers) were exiting the stock market at an alarming rate .
Investors just got shafted by bankers and brokers and this made many examine money flows, and asked why T+3 in the stock market was an archaic disaster, and raised questions about centralised FIAT currency. The rise of Bitcoin began once TARP was signed – at least for me.
I look now at this portfolio (below) and can see the shift coming slowly even for these “cigar butt” investors who have been great investors for decades. But passing on digital currencies for Buffett and Munger is nothing more than them talking (jawboning) thier own position. Beating up Bitcoin is required for them because they (BRK-A) are under invested in digital currency. Frankly at this stage the investors in BRK-A dont care because they are old and rich, and may as well be from another planet, 2019 investors should be scared to death of a stock market long in the tooth and headed to an election, stocks have much larger risk than digital currency.
The Berkshire Hathaway of today is in Litecoin, Bitcoin or Bitcoin Cash at the culmination of Crypto Winter around $3200 (or here) currently trading $5277 an equal 10 years after TARP, but know that the turning point in any asset may it be a stock, real estate, oil or a metal happen – when it is hated – not when it has confidence.
It will be great to look back shorting 1 share of BRK-A at $327,650.00 and buying 63 Bitcoin at $5270 for dollar neutral comparison purposes, and noting one was conducted in a liquid orderly market which was unregulated and decentralised while the other was regulated, illiquid looking like an Equity Winter was on the horizon.
Full disclosure: I have been long Bitcoin since 2015, and have no position in BRK-A or any other Berkshire holdings.