5 Dumb Things said by Smart People


Written byDavid Berger

Originally posted by the Digital Currency Council.

Contrarian investing, going long when the crowd is shorting, is not a new concept. But given the current environment, where celebrities seem to have more influence than reason and high profile people have a microphone or twitter feed in front of them constantly, I’d like to propose a new investment strategy. Let’s call it “Smart People Say Dumb Things”. (Feel free to shorten that into an acronym or write it in Latin to make it sound more erudite if you’d like.)

Smart people have been saying dumb things since the beginning of time.

Typically, the smart person is an incumbent someone who has proven their intellect through success in a given industry and their dumb comment is due to a failure to understand a technological breakthrough or admit that the breakthrough will disrupt what he or she believes to be true based on experience. I’ve compiled 5 such statements below.

  • “This ‘telephone’ has too many shortcomings to be seriously considered a means of communication.” William Orton, President of Western Union, 1876
  • “Fooling around with alternating current is a waste of time. Nobody will use it ever!” Thomas Edison, 1889
  • “There is not the slightest indication that nuclear energy will ever be attainable. It would mean the atom would need to be shattered at will.” Albert Einstein, 1932
  • “Television won’t last because people will get tired of staring at a plywood box every night.” Darryl Zanuck, co-founder of 20thCentury Fox, 1946
  • “There’s no chance that the IPhone is going to get any significant market share.” Steve Ballmer, CEO of Microsoft, 2007

In 2014, incumbents have dug in their heels against a technological breakthrough known as Bitcoin. Here are two statements made by very smart people.

  • “Bitcoin is a terrible store of value. It could be replicated over and over. It doesn’t have the standing of a government.” Jamie Dimon, CEO of JPMorgan, January 23, 2014
  • “Stay away from [Bitcoin]. It’s a mirage, basically The idea that it has some huge intrinsic value is a joke.” Warren Buffet, March 14, 2014

Will Bitcoin go the way of the telephone, alternating current, nuclear energy, television and the IPhone? I don’t know. But I do know that I don’t trust incumbents no matter how smart when it comes to disruptive innovation.

David Berger, CEO of theDigital Currency Council an association that provides training, certification, and ongoing support for professionals in the digital currency economy.

* The Digital Currency Council (DCC) does not advocate on policy matters. Any policy positions taken by David Berger are his personal positions only and do not reflect the position of the DCC.