Buffet, Bitcoin and Beyond Meat

Is Warren Buffett a vegan? I’d be happy to bet my bottom dollar on him being an omnivore especially as it is widely reported that he munches daily on the fodder provided by the likes of McDonalds and Dairy Queen and still managed to live to 88 and counting.

Ok – right now you’re thinking I’ve gone a bit off track – so let’s steer back a little to the right side of the road.

It is also widely reported that Buffett has proclaimed that real investors should not invest in stock market launches, or Initial Public Offerings (IPO’s) as they are commonly called these days.

Admittedly, according to Buffett, he did briefly consider investing in Amazon, Uber and Lyft all companies with little or no track record but failed to reach agreement with them. They then, as we now know (isn’t hindsight a wonderful thing!), went on to make their other initial investors quite tidy sums!

In fact the last time Warren Buffett invested in a stock market launch was almost 65 years ago, when he was just 25 years old, back in 1956 when the Ford Motor company started selling its stock.

So it would seem that one of the ‘Kings’, if not ‘The King’, of the investment world has lost out on quite a few pieces of the action through sticking to this key principle of his investment strategy i.e. not investing in untried and untested companies – as he has said himself: “ You can go around making dumb bets and win. … It’s not something you want to take as a lifetime policy, though.”

Now in 2019 we have one of the hottest stock sales to hit the markets, in fact Beyond Meat (BM) - the self-proclaimed ‘future of protein’ - has hit the ground running so fast on Wall Street that its share value has almost doubled that of Bitcoin so far this year (see, I said I’d eventually get back on point!).

Are there other comparisons to be drawn between the two? There sure are, especially if you are able to think laterally.

From a much broader viewpoint Bitcoin was the digital product, digital saviour if you like, that offered much needed promise for some that it could ‘save the world’ from the tyranny of the big banks. Beyond Meat is now seen by many as a plant-based saviour to a separate, but similarly minded, group of people that it could reduce meat-eating, promote better health and reduce carbon emissions.

So where does that leave Bitcoin investors by comparison? After all wasn’t Bitcoin an unheard of untried and untested ‘commodity’ 10 years ago when it launched? Is Beyond Meat the new Bitcoin? Or is it just another IPO, an over-hyped unicorn that investors are racing towards in the hope of getting rich quick?

You may recall that it wasn’t until February 2011, almost one year after launch, that BTC reached parity with the USD and it now sits at a shade under 12,000 USD – yet we have BM at 164 USD today.

From my standpoint neither BTC nor BM have been of great interest as their appeal lies more with speculators and insiders, especially those that have got in early (isn’t that always the case) but not a wise investment for serious investors.

BTC has been too volatile over the years, although it would seem to be currently tracking through another of its up-cycles (see my previous analytic comment on this from 23rd April here).

On the other hand, BM is not a unique product that can’t and won’t be copied by the traditional food companies’ once/if they decide to acquire makers of plant-based foods and/or launch their own alternative protein products, using their size and scale to gain market share – right now it is just benefiting from being first to market.

So once again I have to agree with Buffett that wiser investors stick to only buying shares of stock in companies with a proven track record of making money – after all that’s what pays our bills!