Investor Charlie Munger unhappy with booming crypto market, backs China ban

• Munger said that he wouldn’t participate in this “insane” crypto boom calling it crazier than the dot-com bubble.
• He added, “the people who are creating cryptocurrencies are not thinking about the customer, they are thinking about themselves”.

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Charlie Munger, the legendary investor and vice-chairman at Berkshire Hathaway, is clearly unhappy about the booming state of the cryptocurrency market. Addressing Australian investors at the Sohn Hearts and Minds conference on Friday, December 3, Mr Munger made a couple of harsh comments about cryptocurrencies.

The legendary investor said that the current climate is crazier than the dot-com bubble. During his conversation with Dr Mark Nelson of hedge fund Caledonia, Mr Munger said that he wouldn’t participate in this “insane” crypto boom.

Related: Warren Buffet’s right-hand man calls cryptocurrencies ‘disgusting’

Interestingly, Munger also backed China’s decision to ban digital assets entirely. As reported by The Sydney Morning Herald, Munger said:

I’m never going to buy a cryptocurrency. I wish they’d never been invented. I think the Chinese made the correct decision, which is to simply ban them. My country – English-speaking civilisation – has made the wrong decision.

I just can’t stand participating in these insane booms, one way or the other. It seems to be working; everybody wants to pile in, and I have a different attitude. I want to make my money by selling people things that are good for them, not things that are bad for them. Believe me, the people who are creating cryptocurrencies are not thinking about the customer, they are thinking about themselves.

Munger’s views on global markets

The global markets have been rallying significantly this year with the Dow Jones and the S&P 500 trading at their all-time highs. Commenting in general on the broader global markets, Munger said that even the valuations of some of the quality-listed companies look far-fetched.

He further noted that the investment environment was “a little more extreme” based on his decades of experience. Munger added:

I think the dot com boom was crazier in terms of valuations than even what we have now. But overall, I consider this era even crazier than the dot-com era.

Interestingly, Munger also backed China’s recent clampdown on the country’s top tech companies. He backed China’s attempts to clamp down on “some of the exuberances” of capitalism. “I think they were right to cut back on some of the exuberances that come… with capitalism,” he added.

Berkshire Hathaway has some major investments in China including a car manufacturer BYD Co. Ltd. Munger remains positive about the company’s long-term growth. However, he added that every capitalist was less enthusiastic about China than they were a year back.

Munger also noted that the high company valuations and share price made value investing at this point even more difficult. “Of course it’s possible, but you have to pay a great deal more for the good companies now,” he said.