Buffett's Asset Cubes

Guillermo Rauch shares Warren Buffett's mental model for evaluating investments and how it applies to his own investment philosophy.

Buffett's Asset Cube Mental Model

• Warren Buffett presents a thought experiment comparing two hypothetical cubes:
  • One cube containing all the gold on the planet
  • Another cube containing all productive farmland in the US and all its companies
• The model asks which cube you would rather own
• Buffett implies the productive assets are superior to the static gold

Guillermo's Investment Philosophy

• Rejects the false dichotomy - "I wanna own both"
• Balances investments between:
  • Productive assets that grow over time (primarily Vercel, his company)
  • Bitcoin as a foundation similar to gold
• Places "bet on myself" by investing primarily in his own company (Vercel)
• Maintains Bitcoin as a percentage of net worth for stability
  • Sees Bitcoin as the "rock solid foundation" he lacked in Argentina
  • Values Bitcoin's reliability and trustworthiness

Historical Context

• Relates to the "energy dollar" concept discussed by Ford and others
• This historical idea proposed currency based on production of joules/energy
• The concept aimed to create a "more rock solid currency" that "attracts reality"
• Parallels between this historical concept and modern cryptocurrency

Future Vision

• Envisions a potential future where "everything is denominated under the hood"
• Believes in a system where everything is "rebased on top of this system"
• Combines productive growth assets with stable store-of-value assets