Legendary investor Charlie Munger doesn’t know which is worse: Bitcoin at $50,000 or Tesla at $1 trillion

Billionaire investor Charlie Munger who is the chairman of the Daily Journal’s board headlined the Annual Meeting of Shareholders of the Corporation (DJCO) in Los Angeles on Wednesday

He fielded shareholder questions on different topics ranging from SPACs, the bitcoin frenzy, the rocketing price of Tesla, and more.

In one of the questions, the billionaire investor was asked whether he thought it was crazier for bitcoin to hit $50,000 or for Tesla to reach a $1 trillion fully diluted enterprise value, he said:

“Well I have the same difficulty that Samuel Johnson once had when he got a similar question, he said, ‘I can’t decide the order of precedency between a flea and a louse,’ and I feel the same way about those choices. I don’t know which is worse.”

Tesla has been on a roll since the beginning of pandemic last year, with its share price rising to 743% last year. Its market cap is currently $689 billion.

Tesla’s CEO Elon Musk‘s total wealth jumped from $24.6 billion in March 2020 to a record $210 billion in January 2021, making him the richest person in the world for the first time – a status he enjoyed until Tuesday when he slipped to the number two position after a 3% decline in Tesla’s share. Jeff Bezos took back the number one spot.

Bitcoin on the other hand has continued to surge to more than $50,000 over the past week after Tesla announced it bought $1.5 billion worth of the cryptocurrency.

Munger, the vice chairman of Berkshire Hathaway and Warren Buffett’s longtime business partner, was also asked about the biggest threat to banking, and whether it was bitcoin or digital wallets like Apple Pay and Square.

“I don’t think I know what the future of banking is, and I don’t think I know how the payment system will evolve,” he said. “I do think that a properly run bank is a great contributor to civilization and that the central banks of the world like controlling their own banking system and their own money supplies.”

“So I don’t think bitcoin is going to end up the medium of exchange for the world. It’s too volatile to serve well as a medium of exchange. And it’s really kind of an artificial substitute for gold. And since I never buy any gold, I never buy any bitcoin.”

Munger, 97, recommended others follow his practice. “Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it was the pursuit of the uneatable by the unspeakable,” he added.

Munger also warned that novice investors are being lured into a trading bubble through apps like Robinhood.

Talking about the recent Reddit-fueled GameStop short-squeeze, Munger said it’s “the kind of thing that can happen when you get a whole lot of people who are using liquid stock markets to gamble the way they would in betting on racehorses.”

He added that the “frenzy is fed by people who are getting commissions and other revenues out of this new bunch of gamblers. And of course, when things get extreme, you have things like that short squeeze.”

You can watch the full interview below