99 year old man says cryptocurrency is for idiots
Charlie Munger also thinks semiconductors are a terrible business, Taiwan's safe from China, Elon Musk is 'peculiar'
When a 99 year old man says that "cryptocrapo" is for "idiots" and banning it is not a bad idea, many might think it's an "Old man yells at cloud" moment.
But this actually happened on Wednesday and the almost-centenarian was Charlie Munger – vice chair of Berkshire Hathaway and one of the most successful investors of all time. So his opinion about what he also calls "cryptoshit" carries some weight regardless of his age.
Munger once described Bitcoin as "disgusting and contrary to the interests of civilization" and revisited the topic when asked during the annual shareholders meeting of the Daily Journal Corporation, a US publishing company he chairs.
As Munger's opinions are widely sought, the meeting is now streamed [video].
The Register tuned in to hear Munger say "You can think of hardly nothing on Earth that has done more good to the human race than currency. National currencies were absolutely required to turn man from a successful ape [into] human civilization because it enabled all these convenient exchanges."
The semiconductor industry is very peculiar: with each new generation of chips you throw in all the money you previously made
"So if somebody says I'm going to create something that sort of replaces the national currency it's like saying I'm going to replace the national air. It's asinine, it isn't even slightly stupid it's massively stupid and of course it's very dangerous."
"Governments were totally wrong to permit it and of course I'm not proud of my country for allowing this crap."
"The guy who made the correct decision on this is the Chinese leader [who] took one look at crypto and he says 'Not in my China.' Well there isn't any crypto in China he's right and we're wrong."
Speaking of China, Munger offered his opinion that the prospects of the Middle Kingdom invading Taiwan have fallen greatly since Russia's illegal invasion of Ukraine. In Munger's estimation, China felt Russia's invasion would succeed, but has changed its assumptions after Ukraine's successful defense.
"I think it's off the table … for a long, long, time," he said, and that makes investment in China more attractive.
It also means worries that China could disrupt global semiconductor supply chains are reduced. But Munger isn't keen on semiconductors because they're too capital intensive.
"The semiconductor industry is a very peculiar industry: you have to take all the money you've made and with each new generation of chips you throw in all the money you previously made, so it's compulsory investment of everything … to stay in the game," he said.
"Naturally I hate a business like that. At Berkshire we like a whole lot of surplus money to come in that we can do something else with."
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Asked about Taiwan Semiconductor Manufacturing Company Limited (TSMC) – which just delivered Berkshire Hathaway a fast and tidy profit – Munger said he thinks the company "may be a good buy at these prices."
Munger was also asked what he thought of Elon Musk's leadership of Twitter, particularly with reference to his attitude to content moderation.
"Elon Musk is a very talented man but also peculiar, and so I don't buy him, and I don't sell them short. I just say well he's a very unusual person," Munger said, before praising his role turning Tesla into the market leader for electric vehicles and calling him a "genius." But Munger then mentioned Chinese EV-maker BYD as a challenger and an example of how "tough" capitalism is for its players.
Munger returned to that theme of competition by citing the now very old example of Kodak having missed – and been destroyed by – digital photography.
But he also made the case for his approach to investing, and life, being valid on grounds that he's never exercised regularly "except when the Army Air Corps made me do exercise."
"For the first 99 years I've gotten by without doing any exercise at all," he added, and when prompted said he has no plans to change that.
Perhaps he is an old man yelling at a cloud after all. ®