Warren Buffett, the renowned investor and chairman of Berkshire Hathaway, celebrated his 93rd birthday on Aug. 30. Throughout his lengthy career, he has adhered steadfastly to a value investing strategy that bears some resemblance to the “buy and hold” approach often associated with cryptocurrencies.
However, Buffett’s focus is on assets with strong earnings potential and investing in companies and sectors where he and his team possess a deep understanding of the associated risks, competition and advantages.
The question is whether such a laser-eyed strategy can outperform Bitcoin (BTC) in the long run. Moreover, investors should question why one of the greatest stock pickers of all time currently holds cash and short-term bonds as the second-largest position in his portfolio.
An interesting example of his approach is Berkshire Hathaway’s largest holding, Apple (AAPL) shares. Berkshire initially acquired these shares in early 2016 when Apple was already valued at over $500 billion, so the firm was far from being an early investor. Notably, Berkshire Hathaway continued to add to its AAPL investment in 2022, even though the stock had rallied over 500% since its initial purchase. This illustrates Buffett’s commitment to long-term investment strategies, regardless of recent price movements.
Buffet downplays nonproductive commodities as a store of value
In a February 2012 shareholder letter, Berkshire Hathaway expressed concerns about the devaluation of paper currency and discussed the limitations of gold as a store of value. It argued that gold lacks practical utility, with demand for industrial and jewelry purposes falling short of production, and its price is largely driven by fear-based sentiment, which leads to only temporary price increases. In contrast, investments in productive companies generate substantial dividends and returns.
Berkshire Hathaway also noted that regardless of whether the future currency is based on gold, seashells or paper, people will always be willing to exchange a portion of their income for goods and services.
Regrettably for Buffett, Bitcoin’s price surged by 683% in the 12…