Former California Governor and Hollywood icon Arnold Schwarzenegger has confirmed he does not invest in Bitcoin or any other cryptocurrencies, stating he follows the investment philosophy of his mentor Warren Buffett: 'I don't invest in things I don't understand.'
Schwarzenegger: No Bitcoin, No Crypto
In an interview with the New York Times published Thursday, Schwarzenegger addressed his stance on Bitcoin directly. 'No, I don't invest in them. I am like Warren Buffett. I don't invest in things I don't understand,' he said, echoing the legendary investor's famous 'circle of competence' principle.
Buffett, the CEO of Berkshire Hathaway, has long been one of Bitcoin's most vocal critics. He famously called the cryptocurrency 'rat poison squared' in 2018, while his business partner Charlie Munger compared it to 'rat poison' and 'turds.' At Berkshire's annual shareholder meeting earlier this month, Munger didn't mince words: 'I hate the Bitcoin success. The whole damn development is disgusting and contrary to the interest of civilization.'
A Lifelong Mentorship
Schwarzenegger's deference to Buffett is rooted in a personal and professional relationship spanning over two decades. When Schwarzenegger ran for California governor in the 2003 recall election, Buffett served as his senior financial and economic advisor. The actor-turned-politician has repeatedly described Buffett as 'the greatest investor ever, my mentor, and my hero,' adding that 'Warren has a common-sense approach to business issues and an integrity that is unmatched. That's the same way I want to approach governing. Warren always tells it the way it is.'
Buffett also advised Schwarzenegger when he hosted 'The New Celebrity Apprentice' in 2016. The deep trust between the two men makes it unsurprising that Schwarzenegger would adopt Buffett's cautious view on Bitcoin.
The Buffett-Munger View on Crypto
Early this month at Berkshire Hathaway's annual meeting, Buffett avoided direct commentary on Bitcoin to avoid upsetting investors who long the digital asset. However, Munger delivered a blistering critique: 'I hate the Bitcoin success. The whole damn development is disgusting and contrary to the interest of civilization.' The pair have consistently warned against speculative assets they consider outside their understanding.
Schwarzenegger's decision to steer clear of Bitcoin raises an interesting question for investors: In an era when Bitcoin has reached all-time highs and major institutions are adopting crypto, does rejecting an asset class solely because it lies outside one's circle of competence still represent prudent investing? Or does it risk missing out on transformative innovation?
Do you think Schwarzenegger should follow Buffett's strategy and stay away from Bitcoin, or should he take the time to learn about cryptocurrencies before making a decision? Let us know in the comments section below.