Chinese entrepreneur Sam Ling and his partner spent $2.35 million n a private lunch with Warren Buffett, hoping to get some investment advice from the legendary investor over cryptocurrency issue.
Three years later, the 31-year-old businessman still uses his photo with Buffett as his phone’s wallpaper.
“Buffett is my idol,” Ling, founder and CEO of Supwin Financial Services Group based in Guangzhou, China, told CNBC in Chinese. “I have been looking up to him and studying his investment strategies for so many years. I’m a loyal fan of his.”
If there’s anything Ling learned from Buffett, he said, it is an appreciation for index funds. Ling, however, wants to apply that outlook to the digital currency realm.
“Cryptocurrencies like bitcoin are too volatile, and that’s why we are launching cryptocurrency indexes,” Ling told CNBC. “Over the past six months, our index has a lower decline than bitcoin during corrections, but has outperformed bitcoin by 50 to 80 percent during upsurges.”
Ling is launching the “BB Index” family of 26 cryptocurrency indexes.
” Actually we have different indexes to help people find the desired expected return they pursue,” said Jerry Cao, chief scientist of BB Index and a former assistant professor of finance at Singapore Management University.
“Rather than thinking, ‘Hey this cryptocurrency will rise 10 percent tomorrow,’ that’s a very short-term view,” Cao added. “What we are really thinking is to extract from the short-term movement and think about one year or five years — what will be the application of those cryptocurrencies and their underlying blockchain?”
“Buffett touched on lots of issues during that lunch, but in the end, he said, ‘Focus on what you are doing and you are already successful,'” recalled Ling. “This quote really left me with a deep impression and I followed his advice.”
However, Buffett has made it clear he believes the craze over cryptocurrencies won’t end well.
“In terms of cryptocurrencies, I can say with almost certainty that they will come to a bad ending.” But Ling disagreed with his idol this time, saying he is confident that BB Index returns will beat any traditional portfolio manager, including Buffett.
“Warren Buffett just won a 10-year bet that an index fund would outperform a collection of hedge funds over that time,” said Ling. “And I want to make a bet with him that my cryptocurrency index will outperform his portfolio over the same period.”
China’s asset management industry is set to expand five-fold to $17 trillion by 2030, that will make it the third largest market in the world.
“It’s like the internet, Wechat and mobile payment,” said Ling. “It’s just a matter of timing. When the timing is right, China will be okay with the technology and that’s when we will launch (BB Index) there.”