Mastiff (Crypto: Doge) is the antithesis of the type of investment that the legendary supporter of the Warren Buffett value tends to do. Chasing the crowd in games focused on the threshing media without real fundamental value is the total opposite of its patient, extreme and completely anchored approach to buy actions.
But understanding exactly why Buffett will certainly never buy King of King of King of Currency is a precious exercise because it will help you to appreciate the timeless principles that Omaha’s Oracle uses. And in addition, there are in fact a few features that Dogecoin has that Buffett could love a lot. So let’s see how he might think about it.
There is more than one thing keeping it on the sidelines here
Buffett does not like cryptocurrencies in general. Concerning BitcoinHe said in 2014: “It is not a sustainable means of exchange. It is not a reserve of value.” He also went so far as to say that he would never buy cryptocurrency, and it seems that he intends to keep this promise.
It is difficult to blame him for not having bought Dogecoin. The meter piece on the dog’s theme has a market capitalization About 38 billion dollars, founded on a firm basis of nothing precisely, financially speaking.
It does not generate any gain, it has no useful objectives, and it is free to have fun making memes on dogs, whether you have the medal or not. There is no long term either Investment thesis That someone like Buffett could formulate to explain how and why the medal will be worth more money in the future than today.
A problem that Buffett would have in particular is that Dogecoin did not economic moat To prevent competitors in the cryptocurrency sector from simply making their own similar part, eating in its part of the value to be won by investors. And that’s exactly what happened with the launch of Shiba InuAnother coin on the theme of the dog which even presents exactly the same breed of dog for brand crimes.
As if that were not enough, it is almost impossible to develop a solid methodology to calculate the value of an asset like Dogecoin. For someone like Buffett, who is always impatient to buy assets at a lower price than their intrinsic valueIt is yet another disposition system.
However, there are at least a few things that he could find completely desirable in this room, so read the rest.
Do not reduce the value engines that really exist
Buffett is a big supporter of the purchase of companies who have a sustainable Competitive advantages This allows them to protect their margins even in the face of other players in their sector. Dogecoin is not a company, so it has no margin to protect, but it has at least one kind of competitive advantage in two forms: its brand value and its first part of the same piece for moon several times.
The Dogecoin brand is recognizable by most investors at this stage. There is only one Dogecoin, and in the sector of the same, it is the undisputed top dog.
And it costs nothing to maintain this advantage, something that Buffett would probably appreciate almost all other investments. This is part of the reason why its holders do not just throw the medal when its price does not increase.
Then there is the fact that the Dogecoin price has experienced incredible supplies more than once. Most of the pieces have their flight shot and crashed and then never exceeds their top of all time again.
But it is likely that the unique status of Dogecoin as the first piece of meme to go firmly in popular consciousness means that it will never fade completely, even if many other pieces come and go. Again, it is not necessary that he invests anything in any type of growth or marketing initiatives to fulfill these supplies, even if they are impossible to predict with precision.
In any case, the Buffett instinct is correct in that you should probably not invest in this room. Remember that there is more than one element in its investment philosophy, and that there is sometimes the value to find if you are ready to look for it in improbable places.