2017 Ponzi Scheme, Howard Marks' latest memo: Thankful for my son's substantial Bitcoin holdings

The essence of innovation is that new things may seem absurd, initially believed by only a few, but when it gains momentum, what initially seemed crazy eventually becomes consensus.

Despite previously describing cryptocurrencies as a Ponzi scheme in 2017, likening them to tulips and internet bubble events, and still maintaining a skeptical attitude to this day, legendary investor Howard Marks once again mentioned cryptocurrencies in his latest memo, thanking his son for holding a significant amount of Bitcoin.

Howard Marks' Message to Investors

Howard Marks is a legendary investor who accurately predicted the 2008 financial crisis and the 1999 dot-com bubble. He is the author of the famous book "Mastering the Market Cycle" and the co-founder of Oaktree Capital. In his latest investormemo, he points out:

In my 2017 memo, I expressed high skepticism towards cryptocurrencies, a topic often discussed with my son Andrew Marks, who is very bullish on Bitcoin and other cryptocurrencies. Fortunately, he holds a significant amount of Bitcoin for our family, and although my skeptical arguments have yet to be proven wrong, Andrew undoubtedly demonstrates the logical thinking required of a value investor.

"Skepticism" is the Instinct of Value Investors

Marks points out that when value investors hear "this time it's different," their instinct is extreme skepticism, which reduces the likelihood of losing money. However, in today's rapidly changing world, thinking should combine strong curiosity, openness, and previous perspectives.

The nature of innovation is such that new things may seem absurd, initially believed by only a few, but as it gains momentum, what initially seemed crazy eventually becomes consensus. Marks states:

Returning to cryptocurrencies, out of my conservative principles, I may maintain my skeptical stance based on my understanding of financial innovation and speculative market behavior. This mechanism has saved Oaktree Capital and myself many times, but it may also not help me better understand innovation. The conclusion is that I still do not have enough insights into cryptocurrencies, so I cannot hold a firm position, but with an open-minded spirit, I am actively learning.