At one point this weekend, you said that Bitcoin, Charlie said Bitcoin is like rat poison, you were asked about that comment and you said it’s probably more like rat poison squared.
Charlie went on in the meeting to then basically call Bitcoin turds He is an expressive sort. Hopefully as he gets a little older, he’ll mature. I just want to ask you about that because it sparked so much controversy and particularly on Twitter and some of the places where you might expect people who are trading in cryptocurrency to be pretty loud about what they heard. What is it about Bitcoin that gets you guys so fired up?
When you buy. You look at the crop every year and what prices are, and you decide whether it was satisfactory investment. You look to the asset itself and what it produces for you. When we buy a business, we look at what the business EARNS and decide how we feel about it in terms of what we paid.
But we are buying something that at the end of the period, we not only have what we bought in the first place, but we have something that the asset produced. And when you buy nonproductive assets, All you’re counting on is whether the next person is going to pay you more because they’re even more excited about another next person coming along.
But the asset itself is creating nothing. Oh, one of the interesting things example is gold. If you go back to the time of Christ and you look at how many hours of labor you had to give up in order to buy an ounce of gold and you take it forward to now. You’ll find that compound, maybe a 10th or two tenths of 1%.
And then you have to insure during that time and make sure somebody doesn’t steal it from you, everything, but it doesn’t produce anything and productive assets, you may have, you can pay too much for a productive asset, but I bought a farm in the 1980s. And every year, look at how much it produced in soybeans and corn.
And at the end of that period, I’ve still got the farm and I’ve gotten some significant income off of it, . But if you and I buy various cryptocurrencies, they’re not going to MULTIPLY, they are not going to be a bunch of rabbits sitting there in front of us.
They’re just going to sit there and I got to hope that next time you get more excited after I’ve bought it from you and then I’ll get more excited and buy it from you. And actually we can sit in the house by ourselves and we could keep running up price. But at the end of the time, there’s one Bitcoin sitting there and now we’ve got to find somebody else and they come to an end.
I made those, that’s a greater fool theory. That’s what you’re saying. Yeah it’s buying something because you expect the pool of people who want to buy it because they want to sell it to somebody else will grow. And it’s wonderful because it does create a rising price, does create more buyers and people think I’ve got to get in on this and it’s better if they don’t understand it.
That’s the other thing about it. If you don’t understand it, you get much more excited than if you understand it. If you buy a bond and says, she’s going to pay you at 4% a year, you’re not going to get any pleasant surprises. She’s going to pay a 4% a year. But if you, if you, you can have anything you want to imagine..
If you just look at something and say, that’s magic, you can do it with shark teeth or seashells or anything. And they did it with tulips in the 17th century and Amsterdam and they’ll do it again. People that like to speculate, they like to gamble and if you can get something pretty bad, something half plausible going on, if you would bought gold in 1942, We might lose the war and we might have to run off to some other country and so let’s put our assets in gold.