{"id":21809,"date":"2023-09-01T18:11:20","date_gmt":"2023-09-01T18:11:20","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/bitcoin-continues-to-outperform-warren-buffetts-portfolio-and-the-gap-is-set-to-widen\/"},"modified":"2023-09-01T18:11:22","modified_gmt":"2023-09-01T18:11:22","slug":"bitcoin-continues-to-outperform-warren-buffetts-portfolio-and-the-gap-is-set-to-widen","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/bitcoin-continues-to-outperform-warren-buffetts-portfolio-and-the-gap-is-set-to-widen\/","title":{"rendered":"Bitcoin continues to outperform Warren Buffett\u2019s portfolio, and the gap is set to widen"},"content":{"rendered":"
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.\u00a0<\/p>\n
However, Buffett\u2019s 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.<\/p>\n
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.<\/p>\n
An interesting example of this approach is Berkshire Hathaway’s largest holding, Apple (AAPL) shares. The company initially acquired these shares in early 2016 when the company was already valued at over $500 billion, so they were far from being early investors. Notably, Berkshire Hathaway continued to add to its AAPL investment in 2022, even though the stock had rallied over 500% since their initial purchase. This illustrates Buffett’s commitment to long-term investment strategies, regardless of recent price movements.<\/p>\n
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. They 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-driven sentiment which leads to only temporary price increases. In contrast, investments in productive companies generate substantial dividends and returns.<\/p>\n
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. <\/p>\n
Regrettably for Buffett, Bitcoin\u2019s price surged by 683% in the 12 months following his critical comments on the viability of non-productive commodities as a store of value. Moreover, on a 4-year horizon, Bitcoin’s gains amounted to a staggering 9,014%.<\/p>\n
To compare the performance of Berkshire Hathaway’s stock holdings to Bitcoin, considering Buffett’s focus on earnings and yield, which is fundamentally different from the characteristics of commodities like gold or Bitcoin, we calculated Berkshire Hathaway’s stock performance using a factor of 3 to simulate a leveraged position.<\/p>\n