Warren Buffett, the founder of Berkshire Hathaway and possibly the most successful activist investor of all time, has once again come out against Bitcoin and other Cryptos, calling them essentially worthless. He also dismissed what goes on on Wall Street these days as being more like gambling than actual business and real investments. His comments came during an annual meeting with Berkshire investors.
The public meeting was held in Omaha, Nebraska, and was Berkshire’s first such public gathering for its shareholders since 2019, before the Coronavirus crisis began. Shareholders were given 5 hours to ask questions of the man known as “The Oracle of Omaha.”
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Warren Buffett also told his investors that he spent $51 billion already this year. The 91-year-old explained to his investors that Berkshire Hathaway’s cash on hand dropped from $106 billion by the end of this year’s first quarter from a total of $147 billion at the beginning of the year (a $41 billion drop). Some of that cash went to Buffett’s investment in the $51 billion in stocks, as well as his firm’s buyback of $3.2 billion of its own shares.
Many would say that the markets have always been a form of gambling, but they are not in any way the same as gambling in a casino or at poker. The markets are supposed to be about investing, about buying something and holding onto to it for a while because you believe that it will eventually go up in value. When calling it gambling, however, Warren Buffett was criticizing all of the new ways that the people on Wall Street come up as investment tools.
“Wall Street makes money, one way or another, catching the crumbs that fall off the table of capitalism,” Warren Buffett said, explaining his reasoning. “They don’t make money unless people do things, and they get a piece of them. They make a lot more money when people are gambling than when they are investing.”
“Occasionally, Berkshire gets a chance to do something, and it’s not because we’re smart. It’s because we’re sane,” added Warren Buffett.
Charlie Munger, Warren Buffett’s long-time partner and Berkshire Hathaway vice chairman, agreed adding, “It’s almost a mania of speculation. We have people who know nothing about stocks being advised by stockbrokers who know even less,”
Munger went on to call the situation insane saying, “It’s an incredible, crazy situation. I don’t think any wise country would want this outcome. Why would you want your country’s stock to trade on a casino?”
On cryptocurrencies in general Warren Buffet said, “Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything. It’s got a magic to it and people have attached magics to lots of things.”
Warren buffet also promised his shareholders that his firm will last forever. “Berkshire is built to forever. There is no finish point,” he said. “The new management — and the management after them and after them — are just custodians of a culture that’s embedded.”