Miller Value Partners
- Bill Miller compared his bitcoin bet to his lucrative Amazon wager over 20 years ago.
- The billionaire investor said Coinbase could become as valuable as Tesla.
- Miller advised investors to value assets based on their long-term potential.
Bill Miller trumpeted bitcoin, touted Coinbase, and compared his cryptocurrency wager to his Amazon bet during the dot-com crash in a recent conversation with author William Green.
The billionaire investor and Miller Value Partners boss said he bought Amazon stock at an average cost of $17 more than 20 years ago, and bitcoin at an average price of about $500 before this year. He also plugged Chinese technology stocks, warned the vast majority of altcoins won’t survive, and outlined how he picks winning stocks.
Here are Miller’s 10 best quotes from the conversation, lightly edited and condensed for clarity:
1. “I’m willing to go over the waterfall with this one too.” – Comparing his belief in bitcoin today to his faith in Amazon stock when the dot-com bubble burst.
2. “Bitcoin is a lot less risky at $43,000 than it was at $300. It’s now established, huge amounts of venture-capital money have gone into it, and all the big banks are getting involved.” – Miller advised investors who lack a deep understanding of crypto, and who aren’t hugely confident in its future, to only allocate 1% of their portfolios to it.
3. “There are 10,000 various tokens and stuff floating out there. The chances of more than a handful of them being worthwhile is very, very small. Bitcoin, ethereum, and a few others are probably going to be around for a while.”
4. “Coinbase could be the default position for growth investors. Tesla has a $750 billion market cap in a mature industry that is never gonna grow very fast, just because it hoovered up the technological change. Coinbase could easily have a $500 billion or $1 trillion market cap as a disruptive company in a rapidly growing, changing industry.”
5. “If you buy Coinbase or anything else, don’t get too worried about a quarter or two, or even a year or two. If you’re going to get shaken out by how the stock trades in three months or six months or nine months, you probably shouldn’t own it.”
6. “I think of bitcoin as digital gold. The key is the demand for this particular type of protection against financial catastrophe.” – Miller asserted that bitcoin could surge 10-fold in value if investors accept it as a haven asset, and suggested that would only be the start of the crypto realizing its potential.
7. “Alibaba is good value, JD.com is good value, Baidu is good value. These are important companies, and China wants them to be national champions. The valuations now are certainly not demanding for the kind of growth they’re likely to experience.” – Miller noted that he doesn’t necessarily expect those stocks to outperform over the next three, six, or nine months.
8. “People are not good at predicting the future because it’s too complex and it’s unpredictable. Why try and predict anything? It’s totally futile.” – Miller advised investors to stay bullish as the market has historically risen over time, but to always ensure they can survive a crash.
9. “GAAP earnings are not the same as value creation. There’s a reason they’re called ‘generally accepted accounting principles’ and not ‘divinely inspired accounting principles’ or ‘immaculately conceived accounting principles.’ You gotta look at things in more than just one way.” – outlining how he justified investing in Amazon when it was unprofitable on a net-income basis.
10. “The traditional value-investing approach is buying businesses at a discount to what they’re currently worth. The emendation I would add is buying them at a discount to what you believe they’re likely to be worth with a sufficient margin of safety.” – Miller said that approach spurred him to invest in Amazon and Facebook, as well as Google during its IPO.