Veteran investor reveals Buffett and Munger's golden rule for Bitcoin
Veteran investor Jon Najarian says the key to success in crypto — and any market — is sticking to timeless advice — buy when others are afraid.
In a chat with Rob Nelson on TheStreet Roundtable, Najarian said he leans on the wisdom of investing legends like Charlie Munger and Warren Buffett.
'Buy when people are panicking and sell when people are greedy,' he quoted. 'Sounds easy. A lot of us talk that, and few of us actually do it because it's hard to pull the trigger when everybody's selling.'
That advice is especially relevant to Bitcoin's recent market cycle. 'From the election, we were what, $64,000? We went to $104,000. I know a lot of people thought the very next step was $200,000,' Najarian said. 'But real traders and investors should know that's not how markets work.'
While many got excited and chased gains at the top, Najarian said the smart money took profits. 'Did it peak forever in February? No. Not at all. But again, zoom out.'
He also shared another line from Munger that's guided his approach: 'If you can't handle drawdowns, you're never going to get a big outsized return.'
For those holding Bitcoin, Najarian recommends using strategies to manage risk without having to sell. 'If I've got Bitcoin and it's running to the upside and I don't want to sell it, I'm probably either buying puts or selling a lot of at-the-money calls against [it],' he explained.
If you zoom out and think about what Munger used to say, Najarian believes there's a clear lesson for crypto investors.
'So many of us try to mitigate the downside being on the wrong side, whether it's long or short. Many of us try to mitigate that with some sort of a hedge, and I do that all the time — not 100% of the time — but usually if I've got Bitcoin and it's running to the upside and I don't want to sell it, I'm probably either buying puts or selling a lot of at-the-money calls against.'
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