Ethereum and Dogecoin have been sizzling hot of late, outpacing Bitcoin and other cryptocurrencies, enriching many young speculators who’ve been “HODLing” their tokens. Before you think about jumping aboard the Ethereum or Dogecoin bandwagon after the fact, though, you should know that Warren Buffett’s right-hand man Charlie Munger still hasn’t changed his tune on Bitcoin or the like. In fact, he thinks that the recent run in Bitcoin and all the sort is “disgusting.”
Charlie Munger slams Bitcoin — again
Warren Buffett himself dodged questions about cryptocurrencies — a topic he clearly hates — during last weekend’s annual meeting with Berkshire Hathaway shareholders, but Munger didn’t hold back.
Munger called Bitcoin “disgusting and contrary to the interests of civilization.”
Harsh words, but the man was never one to sugarcoat his statements.
Given Bitcoin’s use in illicit transactions and that it consumes a good amount of energy in the process of mining, I can’t say I disagree with Munger.
Beginner investors tempted by cryptocurrencies like Ethereum, Dogecoin, or Bitcoin, I believe, would wise to follow Charlie Munger’s words of wisdom by watching the cryptocurrency mania safely from the sidelines. But if you’re keen on gambling with money you’d be willing to part with, go ahead and place a bet on Bitcoin, Ethereum, Dogecoin, XRP or whatever digital token is “sexy” through the eyes of crypto fanatics. Just be sure you’ve got an exit strategy.
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Be careful when speculating on hot cryptocurrencies like Ethereum and Dogecoin
You hear about all the young people being minted as millionaires through their crypto speculation. But what you seldom hear about are the folks on the wrong end of the trade: the people who chased cryptocurrencies and got burned when the trade went bust.
In the game of greater fools (that’s based on The Greater Fool theory, which has nothing to do with us here at The Motley Fool), there will be big winners, and many, many losers. Unfortunately, by the time you hear of the newly minted millionaires in the mainstream media, it’s likely way too late to join in on the trade.
Today, the hottest cryptocurrencies are Dogecoin and Ethereum. They’ve been hotter than Bitcoin. And I’d imagine many people are tempted to scratch their gambler’s itch by jumping aboard the crypto bandwagon now that there’s a flood of new headlines praising the latest round of people who’ve been made rich off the latest rally.
Instead of giving into the temptation, I’d much rather take a page out of Charlie Munger’s playbook and look to buy boring stocks and forget about them for years, if not decades at a time.
Forget Ethereum: Boring is beautiful in an environment like this
Right now, Fortis (TSX:FTS)(NYSE:FTS) is looking pretty attractive, as the market continues to broaden out and value stocks are made great again at the expense of growth stocks. Fortis is a bond proxy that’s more likely to zig when the markets zag, all while rewarding investors with a rich, growing dividend (currently yielding 3.7%).
I view Fortis as the anti-Bitcoin or the anti-Ethereum.
Rest assured, nobody is going to be chatting about their Fortis shares at the watercooler, as it’s one of the least eventful names in the entire stock market. Nobody is going to get rich off of it overnight. But for those looking to invest for the long term and not gamble, Fortis ought to be at or around the top of your shopping list, as the market waters get that much rougher going into the summer season.
Fortis stock has been treading water for two years now, but as euphoria turns into defensiveness, I’d say Fortis is one of the names that could be ready to make up for lost time.
Ethereum is one of the sexiest assets right now. Fortis is arguably one of the least sexy. If you’re looking to achieve above-average, risk-adjusted returns over the next 10 years and beyond, I think it’d be wise to go with the unsexy play in Fortis. While the name won’t make you filthy rich like crypto could, FTS stock will help you build wealth and stay rich over time.
I have no idea which cryptocurrencies will be around in 10 years from now. But I do think that Fortis’s intrinsic value (and dividend) will have increased considerably over the timespan.
Stay Foolish, my friends.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joey Frenette owns shares of Berkshire Hathaway (B shares) and FORTIS INC. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends FORTIS INC and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short June 2021 $240 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares).