Peter Thiel’s “sociopaths” know something he doesn’t know

Warren Buffett during an interview with CNBC’s Becky Quick on February 24, 2020.

Gerry Miller | CNBC

My first experience with one of the men Peter Thiel called a “sociopathic grandpa from Omaha” was in the early 1990’s.

Joe Kernen and I wrapped up a “stocks to watch” segment and discussed Berkshire Hathaway’s earnings. As part of this discussion, we chatted about our favorite companies Warren Buffettportfolio.

Mine was See’s Candy after spending 17 years of my life in Southern California where See’s was sold. Joe’s was NetJets.

Suffice to say, less than 24 hours later, two large boxes sat on my desk containing 10 pounds of See’s candy and a note: “Thanks for the mention, Warren.”

I had never met Buffett before, so I called him, thanked him for the candy, and assured him I had no intention of sharing it with my co-workers.

He laughed and told me to tell Joe not to expect a jet.

Since then, we have had a warm professional and personal relationship. I took that with me too Jamie Dimon and Larry Fink, both of whom joined Buffett on Thursday identified by libertarian investor Thiel as part of a “financial gerontocracy”. The group is holding back the further development of Bitcoin to protect its own financial interests, said Thiel.

It’s a bit of the pot calling the kettle black as Thiel uses this criticism to defend and tout his bitcoin holdings.

Also, in my dealings with none of these gentlemen have I found them to be sociopathic, backward-looking, or unwilling to accept new ideas or technologies when they might benefit from their use in mainstream finance.

Warren Buffett is arguably the greatest individual investor of our lives, Dimon our most accomplished bank CEO, and Fink, whose $10 trillion investment firm pioneered more accessible investment opportunities for the public, is the builder of the world’s greatest wealth manager.

That doesn’t mean these aging business titans are infallible, nor are they entirely without flaws or missed opportunities.

However, they are students of monetary and market history, savvy investors, and wealthy, especially Buffett, beyond our wildest dreams.

In fact, you’d have to add up the net worth of all the crypto billionaires in the world to surpass Buffett’s net worth.

Some will accuse me of giving in to these men. I’m well past the point of pandering, either in my life or in my career. In fact, I never helped at all. Never necessary.

However, what I have found among bitcoin and crypto enthusiasts or supporters is that they are trying far too hard to convince the world that a new global currency is necessary to democratize finance and help those who have little access to banks, payment systems or bitcoin investable assets.

You can do that simply by giving anyone in the world a smartphone and links to simple finance apps.

The bitcoin problem

Bitcoin remains a solution in search of a problem.

Payment systems are evolving rapidly, offering consumers many benefits, from reduced transaction costs to secure smart contract payments to faster processing and settlement, all of which are happening even as Bitcoin’s value falters.

Blockchain and Ethereum are largely responsible for this payment systems revolution, while other systems are emerging even faster that will create increasing efficiencies that will benefit consumers, with or without Bitcoin or the 12,000 other cryptocurrencies minted to date.

Thiel’s very personal attack on Buffett, Dimon, and Fink does nothing to make a pro-Bitcoin case.

On its own, bitcoin is far too volatile to serve as a unit of account, a medium of exchange, or arguably a store of value—in short, it has none of the qualities that define a currency, or even money.

I was terribly wrong about the price of bitcoin. But not so much on its use case.

It still represents a small fraction of the world monetary system. Its market value of $820 billion (whatever “currency” that means) pales in comparison to the dollars in circulation around the world and pales in comparison to the $13 trillion of the world’s pre-eminent gold reserve, which accounts for the most of the world’s preferred hard currency planet.

Thiel believes that wealthy, powerful men like Buffett, Dimon, and Fink are suppressing what he calls the “revolutionary youth movement.”

Perhaps.

Perhaps the other explanation is that perhaps, like many of us approaching or exceeding retirement age, we have experienced so many investing cycles, so many fads, manias and bubbles that we find financial highs easier and simpler to identify than we stay of course more doubtful.

And we would prefer to warn the public of their inherent risks, which they trade for personal rewards. If this is sociopathy, then let’s make the most of it!

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