Warren Buffet and Ray Dalio
Ray Dalio and Warren Buffett have diverse views on gold. Buffett isn’t very fond of gold and has bashed the precious metal again and again. In his latest shareholder letter, Buffett once again made his dislike of gold clear. He thinks the metal can’t return more than stocks (SPY) in the long run.
In contrast, Ray Dalio’s love for gold is well known. His hedge fund, Bridgewater Associates, maintained its stake in the SPDR Gold Shares ETF (GLD) and the iShares Gold Trust ETF (IAU) during the fourth quarter of 2018 at 3.91 million and 11.31 million shares, respectively. Dalio recommends investors put 5%–10% of their portfolios in gold (GLD).
But there’s one asset over which hedge funds managers’ views somewhat converge.
Disdain for bitcoin
Many prominent investors have a strong dislike of bitcoin (BTC). Jeffrey Gundlach, who believes Bitcoin could easily rise 25% and return to a $5,000 price point, still doesn’t advise investing in it. As we highlighted in Gundlach sees 25% Upside in Bitcoin, Still Advises to Get Out and as reported by CNBC, he said, “I don’t recommend anything with bitcoin, really … but if you really want to speculate, I think it could make it to $5,000. Talk about an easy 25 percent.”
Bridgewater Associates founder Ray Dalio has also stated that Bitcoin is a bubble. According to CNBC, he said, “It’s not an effective storehold of wealth because it has volatility to it, unlike gold.”
Warren Buffett doubles down on bitcoin
Warren Buffett, Berkshire Hathaway’s (BRK-B) chair, has been critical of cryptocurrencies (XBT). In his interview with CNBC on February 25, Buffett doubled down on his attack against Bitcoin. He said, “Bitcoin has no unique value at all.” He added, “It attracts charlatans,” and, “If you do something phony by going out and selling yo-yos or something, there’s no money in it — but when you get into Wall Street, there’s huge money.”
Bitcoin lost more than 70% of its value in 2018. Like any bubble, we saw market valuation soar for little-known firms on the mere announcement of cryptocurrency mining. Fear of missing out on an investment that was surging exponentially drove people to cryptocurrencies. Semiconductor stocks (QQQ)(INTC) including Advanced Micro Devices (AMD) and NVIDIA (NVDA) were expected to benefit from rising demand for blockchain technology.