Kevin O’Leary Balances Munger’s Wisdom with Crypto Bets

Kevin O’Leary, the famous investor and Shark Tank star, combines the teachings of traditional finance with the current trend of digital currencies. Besides learning with Charlie Munger, he now has Bitcoin in 20% of his asset portfolio.

Munger was O’Leary’s main mentor. The late vice chairman of Berkshire Hathaway highlighted the importance of free cash flow. O’Leary’s decision follows the same path where the cash-first principle is prominent, just like Munger’s philosophy.

O’Leary bonds emotionally with Munger on every issue except crypto. Munger regarded Bitcoin as “rat poison”. O’Leary placed 20% of his assets in the crypto market. By doing this he gave the signal that he is going to be the one driving the digital currency’s destiny. As for him, Bitcoin is the most reliable option.

There are signs that O’Leary’s crypto bet will turn out to be a good one. The trend of Bitcoin is better than that of Berkshire Hathaway until 2025. O’Leary’s choiceto contradict Munger’s ideas appears to be the right one. When Bitcoin went past $60,000, the majority of sceptics were proven wrong.

The aspect that makes O’Leary’s style different from that of the other investors is that he’s not only sticking to his regular strategies and at the same time just choosing new paths. He combines cash flow investments with high-risk ones. While most of his money (80%) is in safe cash-generating assets, he allocates 20% to cryptocurrencies that can multiply in value if their prices soar.

Investing in this manner is solid. The major part (80%) provides the portfolio with stability through cash flow. The minor portion (20%) allows for the portfolio to be more exposed to the upside potential in good times for the digital currencies. Such a setup makes the entire account remain at a certain level of safety even when there are large fluctuations in cryptocurrencies.

Financial advisors have begun to realize the brilliance of the 80/20 plan in today’s volatile environment that includes inflation and conflicts. The plan acts as a shield as it maintains holdings in strong businesses but also allows for exposure to sectors such as technology which is both safe and has growth potential.