Editor’s note: This article was first published in March 2014, just after Buffett called Bitcoin “a mirage”; its Bitcoin scepticism and its comparison with the Spanish stocks Quabit, Urbas and Codere reflect that moment. Quabit was absorbed by Neinor Homes in 2021.
Marc Andreessen, a partner at the venture capital firm Andreessen Horowitz, which manages $1.5 billion, has had some rather “unkind” words for the legendary investor Warren Buffett, calling him an “old white man who doesn’t understand technology and craps all over it” during a conference about Bitcoin.
Andreessen boasts that his investment in Bitcoin has been more profitable than the return achieved by Berkshire Hathaway, Buffett’s company, which, according to Andreessen, proves that the new era belongs to modern investors and not to the “old investors” of Buffett’s day who haven’t a clue about technology.
All of this stems from Warren Buffett’s comments about the digital currency, which he called a mirage, another tulip mania, and which he strongly advised investors against putting their money into. Andreessen has said that he intends to invest a few hundred million more in Bitcoin, as he is a firm believer in the future of this digital currency, claiming that they are serious investors who only invest in companies that are on the right track (which is a downright contradiction).
See also: Would we use a sharp fall in Bitcoin to buy?
In my personal opinion, Andreessen is an example of losing perspective after falling in love with your own investment bet, and with a good speculative investment that has worked out so far.
And as if that weren’t enough, he shows a total lack of humility in having the sheer nerve to challenge the best investor on the planet today, who has achieved an average return of 24% a year for 32 years.
There have been many idealists like Andreessen who have led retail investors into high-risk investments, assuring them that it was the future, and those investors ended up losing their shirts. But there have been very few investors throughout history who have achieved spectacular returns with conservative stocks and come through major national and global economic crises.
Could Bitcoin turn out to be fantastic? Of course, and so could Quabit, Urbas and even Codere, but that doesn’t mean I’d bet my capital on those companies.
See also: 3 dividend stocks for the long term
Featured image: Robert Scoble, CC BY 2.0, via Flickr.
