Financial and Economic Management Assignment - Buffett & Bitcoin

This assignment delves into the financial insights of Warren Buffett, focusing on his investment strategies and perspectives on Bitcoin and Kraft Heinz. The analysis includes Buffett's role as CEO and Chairman of Berkshire Hathaway, his views on Bitcoin's value and impact on the financial industry, and his assessment of the Kraft Heinz Co. acquisition. The paper examines the potential of Bitcoin to disrupt the economy, the challenges of its regulation, and the decentralized nature of financial transactions. The assignment references key sources such as Market Watch and the Wall Street Journal, providing a comprehensive overview of Buffett's financial acumen and his stance on emerging financial technologies. This analysis provides valuable insights into financial management, investment strategies, and the evolving landscape of the global economy.

Running Head: FINANCIAL AND ECONOMIC MANAGEMENT 1
FINANCIAL AND ECONOMIC
MANAGEMENT

FINANCIAL AND ECONOMIC MANAGEMENT 2
Exercise 1
Warren Buffet is mainly an American business investor, philanthropist, and speaker who
serve mainly as the CEO and Chairman of Berkshire Hathaway. The buffet is regarded as one
of the most successful investors in the world and his net worth is approximately US$84.9
billion computed until February that makes him the third wealthiest person in the entire
globe. Warren Buffet owns a huge variety of the business via his massive conglomerate,
Berkshire Hathaway, Inc. The New England Textile was mainly grown by Buffet into a
booming firm with a market cap over $527 billion.
Warren was born in Omaha, Nebraska and his nationality is American. He is the investor who
has a lot of effect on the market. From the very early days, only Buffet developed an interest
in the business and investing in his youth. It is said that he first invested at the age of just
eleven. The Giving Pledge was founded by Warren Buffet in the year 2009 with Bill Gates it
is the place where the millionaires give at least half of their fortunes. Furthermore, Buffet is
also seen contributing to the causes related to politics. However, Buffet's interest in the stock
market and also investing dated back to his school days where he spent most of the time in
the consumer's lounge regional stock brokerage near the brokerage office of his father.
The article highlighted that Warren Buffet said that 3G Capital and Berkshire Hathaway Inc.
was overpaid in the year 2015 when they helped the Kraft Heinz Co to come into existence,
but Buffet has no such plans for selling. After a CNBC interview, it was disclosed that about
$2.8 billion loss towards the Berkshire was contributed by the Kraft Heinz in the year 2018
(Market Watch, 2019).

FINANCIAL AND ECONOMIC MANAGEMENT 3
Exercise 2
As per the article it has been highlighted by Buffet that Bitcoin has no such unique value at
all and he is also quite sympathetic towards the individuals who own Bitcoin.
Bitcoin tends to affect the business to some extent as it is a new concept that may or may not
last but it has the possibility to change the face of how the money is exchanged by the
individuals. In terms of safety and security, it can be said that Bitcoins are making it one of
the most anonymous and safe transactions that an individual and the businesses can have.
Replacing a business with the Blockchain technology will mainly result in a lot of disruption
in the financial services industry but also a lot of enhancement in the efficiencies. Yes, the
Bitcoin also has the potential to affect the economy also. Bitcoins are the disruptive economic
innovation that has the potential for revolutionizing the present economic structure and alter
how the financial institutions and bank operations. On the contrary, it is said that Bitcoins is
disrupting the economy. With the emergence of the Bitcoin, the financial transactions are
decentralized on a huge scale. This type of decentralized transactions has no recourse to the
US Dollar. One of the main challenges that are faced by the Bitcoin is they are hard to
regulate because of their anonymous nature. Hence, personally, I agree with the statement
made by Warren Buffet in this article that Bitcoin has no such value (Friedman, 2019).

FINANCIAL AND ECONOMIC MANAGEMENT 4
References
Friedman, N. (2019, 25th February). Warren Buffett: I Overpaid for Kraft Heinz. Retrieved
from https://www.wsj.com/articles/warren-buffett-i-overpaid-for-kraft-heinz-
11551098035?mod=hp_lead_pos6
Market Watch, (2019, 25th February). Warren Buffett says bitcoin has ‘no unique value at
all’. Retrieved from https://www.marketwatch.com/story/warren-buffett-says-bitcoin-
has-no-unique-value-at-all-2019-02-25?siteid=yhoof2&yptr=yahoo