As two legendary figures in the investment world, Munger has passed away, and Buffett has also stepped down. In the final years of their investment careers, both expressed negative views on Bitcoin, which provided a theoretical basis for many who either did not understand or did not want to spend time understanding Bitcoin, saying, 'Look, masters like Buffett and Munger do not favor this thing, so it must be unreliable'—thus allowing them to comfortably avoid research. People are like this; if Buffett and Munger say that people who drink are fools, then even if a certain drunkard is their disciple, he will say, 'Fuck that, old Deng is not always right; at least he doesn't understand alcohol.'
It's normal for Buffett not to like Bitcoin; he also doesn't like gold. He says those things do not generate cash flow, meaning you have to rely on later buyers to buy at a higher price to profit, rather than the 'business value' generated by the thing itself. Do you agree that gold is another form of Bitcoin? At this point, many people disagree again because they actually have two pieces of gold.
Buffett was already over 80 and 90 years old when discussing Bitcoin; he was about to enter the final years of his investment career. What reason does he have to gamble on something in a new field? New fields need to mature; at least it takes decades. The internet, for example, did not enter the fast lane until over 20 years later, while Bitcoin was only 5 years old when Buffett first mentioned it. For Buffett, Bitcoin and everything in the entire Web3 circle are things he no longer needs to understand in the final journey of his life.
But you are different; you may only be in your 30s or even 20s, and you still have 50 or 60 years of investment career ahead of you. The entire lifecycle of Web3 may span your remaining investment career. If you don't buy today, what about tomorrow, or ten years from now? If it becomes mainstream, just like the internet, where everyone has a bit of Apple stock and Nvidia stock, can you afford not to have it? Each generation has its own things; even if you completely copy Buffett's work, even if your entry point is the same as his, over a 20-year period, it is nearly impossible to outperform the index. This still relies on later awakenings, and only after buying Apple did things take off.
Everyone knows that investment should be within one's own circle of capability. So what is the range of capability? Is it that once you understand the market in your 20s, you can forever stay in that circle and no longer invest outside of it? Of course not. The circle of capability must continually expand to increase the range of choices. For Buffett's lifecycle, his 'understanding of business' capability circle is already sufficient, but you are not; the changes you will experience in the coming decades are things that Buffett, with his eyes closed, cannot see or need to experience.
Moreover, with his fund size, why should he pay attention to Bitcoin? It's practically inaccessible. If that's the case, what is the significance of him trying to understand it? Duan Yongping is also like this; although the funds he manages are not as large as Buffett's, he still manages tens of billions of dollars, and he has another 30 years of investment career, but he does not need to understand Bitcoin either, because he can't buy in. Unless the market cap of $BTC increases five to ten times, it won't be too late to understand it then, right? But you are different; it cannot accommodate big funds, so how could it not accommodate your money?
There is a gap in your ages, a gap in your fund sizes, and a gap in the profit goals you need to achieve, so the targets and fields you need to understand should naturally differ—what you should benchmark against is how they treated the new opportunities that emerged in their time when they were young. How did they achieve returns that surpassed other participants in those areas? Instead of, as a young person, copying the work of aging elders or managing elders with massive fund sizes.
The circle of investment capability is not innate; everyone starts from zero and expands their circle. So when should you continue to expand, and when is it okay to shrink your investments to your own capability range? Four actions correspond to four scenarios: must expand, must not expand, can expand, and should expand.
When there is a target or field you must understand, you must expand; but when this new thing is absolutely isolated from you, and there will be no relationship for a long time, you should not waste time trying to understand it—for example, Buffett's fund size, their remaining investment age, etc., this is what must not be expanded.
So what if it's something that 'can' intersect, but 'does not necessarily' have to intersect? Then it is 'can expand'; but if you judge that this expandable or non-expandable thing will eventually intersect with you, then you should 'expand' now.
The original text is from: Cai Leilei
