The Weekly Nibble: Warren Buffett and Bitcoins

Here are some of the most interesting articles that have appeared in the Motley Fool Singapore’s website this week.

1. Is Risk-Free Investment Really “Risk-Free”?

Many of us may have the belief that socking money away in the bank is the least risky way for us grow our money. That is far from the truth.

With banks now giving an interest of less than 0.5% on our money, it doesn’t get us anywhere to building our wealth.

Furthermore, when we take into account the invisible-money-eating beast called “inflation”, we have a negative return by leaving money in the bank.

The solution, then, would be to invest in passive index funds that help to grow our wealth at rates higher than inflation.

Do check out Stanley Lim’s article to find out more.

2. 2 Ways a Humble Notebook Can Simplify the Way You Invest

The handy notebook – an instrument vastly neglected with the proliferation of technology.

In his article, Chin Hui Leong tells us why a notebook can be the “most important thing in an investor’s toolkit”.

Using excerpts from Jason Zweig’s book, Your Money and Your Brain, Chin also explores how we can go around certain biases that we may inherently have with the help of the notebook.

3. Does Bitcoin Make a Good Currency?

The buzzword in the financial markets now is “Bitcoin”. The cryptocurrency has seen its price surge by more than 200%. However, is there value in such cryptocurrencies?

Unlike stocks, we are unable to value cryptocurrencies. The monetary value assigned to a cryptocurrency depends entirely on the ability to sell it to another person at a higher price in the future. This is speculative in nature and unlike businesses, it doesn’t produce cashflow.

Warren Buffett, who made his wealth by investing in stable businesses, warned during an interview with CNBC to “[s]tay away from it [bitcoin]. It’s a mirage, basically”.

He added:

“It’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.