Munger: investors are advised not to buy bitcoin or gold

Source: Charles Munger, 97, a close friend of Mr. Buffett and vice chairman of Berkshire Hathaway, responded to a number of hot topics during a Q & a session at the shareholders’ meeting of his newspaper company daily journal on Wednesday. On the one hand, Mr. Munger has issued a stern warning about the frenzied trading activity driven by retail investors, and attributed part of the bubble to commission free trading platforms such as Robin Hood. Mr Munger said retail investors were lured by the so-called free trading software. Robin Hood has been accused by many commentators that it has played a game on investment behavior through its application. The platform and other online securities companies rely on a controversial practice, that is, payment for order flow as their profit source instead of commission. “No one should believe that Robin Hood’s deal is free,” Munger said. The craze is driven by people who get commissions and other income from this new group of gamblers. ” Munger added: “it’s stupid for this culture to encourage people like to bet on a racetrack to gamble in stocks as much as possible It’s a dirty way to make money. ” Munger even compared the current trading frenzy with the 1720 South China Sea bubble, saying: “as a result, human greed and the radicalization of the brokerage business can cause these bubbles from time to time. I think wise people should stay away from them. ” Asked whether “bitcoin reaches $50000” or “Tesla’s fully diluted corporate value reaches $1 trillion”, Munger said: “I met Samuel Johnson (18th century British writer) Johnson, who once said, “I can’t decide the priority between fleas and lice,” and I have the same view on both. I don’t know which is worse. ” Tesla shares soared 743% last year, although they have fallen about 3% so far this year. Its market value is currently about $689 billion. Bitcoin hit a peak of $57844.3 in the past week after Tesla announced its purchase of $1.5 billion. Munger was also asked what was the biggest threat to the banking industry, bitcoin or digital wallets like apple pay and square. “I don’t think I know what the future of banking will be, or how payment systems will develop,” he said. I do believe that a well run bank has made a great contribution to civilization, and central banks around the world like to control their own banking systems and their own money supply. So I don’t think bitcoin will become a global medium of trade. It is too volatile to be a good medium for trading. It’s actually an artificial substitute for gold. And since I never buy any gold, I never buy bitcoin. ” Munger said daily journal won’t hold bitcoin like Tesla did, and he advised others to do the same. He said that bitcoin hype is like Oscar Wilde’s description of the British fox hunting – the pursuit of the uneatable by the unspeakable – a group of speechless people chasing a group of inedible prey (no one eats fox meat). In addition to the above topics, Munger also said that there is no bubble in US Treasury bonds and that value investment “never goes out of date.”. Mr Munger said his response to market turmoil was to spend it safely. In view of the SPAC (Special Purpose Acquisition company) market, Munger believes that spac prosperity is a “stimulus bubble” signal. He said the world would be a better place without spac.

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