Editor’s note: This article was first published in November 2017, when bitcoin had just passed 7,000 dollars and Buffett was 87; the wind, solar and other clean energy investment figures it cites are as reported at that time.
As he does every year, Warren Buffett invites business school students to Omaha to clear up their doubts and answer all kinds of questions and concerns they have. He usually covers a wide range of topics, and this year the students did not want to miss the chance to get Buffett’s opinion on cryptocurrencies in general and bitcoin in particular.
As you might expect, Buffett believes cryptocurrencies will end badly.
He said that people get excited about big upward price moves, and Wall Street goes along with it.
Remember that bitcoin has passed the 7,000-dollar mark and is currently the “mother cryptocurrency”. But Buffett remains very sceptical of cryptocurrencies, saying:
“You can’t value bitcoin because it’s not a value-producing asset.” He admits he doesn’t know how high the price of bitcoin will go, but he described it as a real bubble.
Buffett’s words come at a time when others who uttered the word “bubble” have ended up backtracking and even entering the cryptocurrency market. But a man like Buffett, 87 years old, who has already seen and studied many other bubbles, recognises the same pattern in bitcoin.
See also: Warren Buffett’s 16 best investing tips
In fact, every time someone talks about a bubble and the price of bitcoin shoots up again, some people attack whoever said the dreaded word. But that is precisely what bubbles are about. If there is one thing we have learned about bubbles, it is that they burst when people are at their most confident, when the people who were late to jump on the bandwagon of rising prices start to come in.
Buffett also took the opportunity to talk about clean energy, one of his biggest investment bets. He has around 17 billion dollars invested in wind and solar power, and another 4 billion in clean energy projects.
He believes coal plants’ days are numbered and that many cities will become self-sufficient through wind power within a few years.
And with a young audience, career advice could not be left out. At 87, he says he wakes up excited to go to work. His advice was to be enthusiastic and do what you love, and to look for the job you would do even if you didn’t need to work.
Buffett also talked about the importance of surrounding yourself with the right people.
See also: 17 surprising facts about Warren Buffett that not everyone knows
By interacting with people you admire and spending time with people who are better than you, he said, you can learn and improve yourself; a wonderful group of friends is the greatest asset.
He also stressed once again that temperament is much more important than IQ.
He ended his talk with a piece of advice: don’t forget that what makes life enjoyable is being creative and being with people you admire.
See also: 8 life lessons from Warren Buffett
Featured image: Gastev (Mirko Tobias Schaefer), CC BY 2.0, via Wikimedia Commons.
