If I Could Pick Stocks for Warren Buffett Today, I’d Choose This One Crypto Gem

Warren's Missing Crypto Bet—And Why It's Costing Him Billions

The Oracle's Blind Spot

While Buffett sticks to railroads and soda cans, digital assets quietly eat traditional finance's lunch. The crypto market's relentless surge exposes a fundamental gap in the old guard's strategy—they're playing checkers while blockchain plays 4D chess.

Numbers Don't Lie (Unlike Some Fund Managers)

Bitcoin's 150% yearly run dwarfs every S&P 500 stock. Ethereum processes more daily transactions than Visa. Yet most Wall Street veterans still treat crypto like Beanie Babies—missing the entire digital revolution happening under their noses.

The One Asset Buffett Should Own

Forget Coca-Cola—decentralized protocols now generate more revenue than Fortune 500 companies. The winning pick combines institutional-grade security with DeFi yields that make bond returns look like pocket change. It's the trade of the decade, and traditional finance is too busy charging 2% management fees to notice.

Wake Up Call: Your Portfolio Is Already Obsolete

While Buffett's disciples debate price-to-earnings ratios, crypto natives stack satoshis. The gap between analog investing and digital assets keeps widening—soon it'll be too late to bridge. Maybe that's why hedge funds quietly allocate 5% to crypto while telling clients to avoid the 'risk'.

Image source: The Motley Fool.

This article, therefore, isn't an arrogant explanation of how I could better invest Buffett's billions. To the contrary, I want to explain why I believe that(MELI 4.00%) WOULD be a perfect addition to Berkshire Hathaway's portfolio, based on everything that I know about the Oracle of Omaha.

Go big or go home

As of this writing, Berkshire Hathaway has a market capitalization of just over $1 trillion and it has $340 billion in cash and short-term investments on the balance sheet. This means that if Buffett is going to make a needle-moving investment, it needs to be an investment in a big company.

In his 2023 letter to Berkshire Hathaway shareholders, Buffett lamented, "There remain only a handful of companies in this country capable of truly moving the needle at Berkshire." Consider that if Berkshire invested in a company valued at $1 billion, it could go to $10 billion and outperform the. But that gain would barely register for Berkshire, since it's worth over $1 trillion.

To find a stock for Buffett, I stuck with businesses valued at over $100 billion. As of this writing, MercadoLibre is valued at about $120 billion. That's big enough to qualify for Berkshire's investing universe.

MercadoLibre is the e-commerce and financial giant of Latin America. And some readers might object to this idea considering that in 2023 Buffett also wrote, "Outside the U.S., there are essentially no candidates that are meaningful options for capital deployment at Berkshire." But note that Buffett didn't exclude all international stocks, but rather said that there were essentially no options. MercadoLibre is one of the few exceptions in international markets that's big enough for Buffett's attention.

Value and growth

For Buffett, investing is all about value. In fact, in 1992 he wrote, "The very term 'value investing' is redundant" because for him, every investment should be a value investment.

On the surface, MercadoLibre wouldn't seem to conform to the principles of value investing. After all, it trades at a price-to-sales (P/S) ratio of about 5 and a price-to-earnings (P/E) ratio of about 58. On both counts, there are plenty of cheaper-looking stocks out there.

MELI PS Ratio data by YCharts

However, Buffett doesn't determine good value in the stock market by solely using these popular valuation metrics. These metrics measure past results and don't account for future growth.

Value investors can't neglect to account for business growth. As Buffett wrote, "Growth is always a component in the calculation of value" (emphasis his). And fortunately, MercadoLibre delivers when it comes to growth.

MercadoLibre's revenue grew by 38%, 37%, and 49% in 2024, 2023, and 2022 respectively. Few businesses have grown at such a high rate.

What truly makes MercadoLibre compelling from a growth perspective is its ongoing opportunity. Between economic growth, the adoption of e-commerce, and growth in digital financial products, the company could continue to expand for the next decade or more.

When factoring in its penchant for growth and its large market opportunity, MercadoLibre stock is still a good value today.

But can MercadoLibre compete?

In 2007, Buffett wrote, "Long-term competitive advantage in a stable industry is what we seek in a business." I'd say that e-commerce is certainly a stable industry. It's unfathomable to think that people will buy fewer things online in the future. But does MercadoLibre have a moat?

I believe it does. MercadoLibre has built an extensive shipping and logistics network, which is uncommon in Latin America. Over half of its shipments can now be delivered the same day or next day, which is an impressive feat. And it's something that can keep its more than 70 million active buyers in the platform.

This growing base of buyers is key for MercadoLibre's future growth. Right now, the business is growing with third-party listings, subscription products, and advertising demand. All of these things are bolstered by a fast-growing user base. And it's reasonable to expect the user base to grow because MercadoLibre has an advantage when it comes to logistics.

MercadoLibre is a big business with competitive advantages and a large opportunity for future growth. This is why I believe it would make a nice addition to Berkshire Hathaway's portfolio.