What is Charlie Munger's view on Fintech companies?

Here is the translation of the provided content into English, maintaining the original Markdown format:

The answer is: Okay, this is the response regarding Charlie Munger's views on Fintech.

Charlie Munger generally holds a highly skeptical, critical, and even disdainful attitude towards financial technology (Fintech) companies. His perspective is rooted in his core value investing philosophy, deep understanding of human nature, and insights into the essence of the financial industry.

Overall, he believes many fintech companies are built on hype, regulatory arbitrage, and the exploitation of human weaknesses, rather than creating genuine, lasting social and economic value.

Here are several core aspects of Munger's views:

1. Outside the Circle of Competence

Munger and Buffett insist on investing only in businesses they deeply understand. The fintech industry features rapid technological iteration and complex, ever-changing business models. For Munger, the long-term profitability and competitive advantages of these companies are difficult to predict. Therefore, most fall into the "Too Hard" pile and are simply avoided.

2. Lack of Durable Moats

A core tenet of value investing is finding companies with wide and durable "moats." Munger questions whether many fintech companies possess lasting moats.

Technology Easily Copied: A technological innovation can be quickly imitated by competitors, including traditional financial giants.
Intense Competition: The sector is flooded with capital and startups, leading to fierce competition that often devolves into price wars, eroding profits.
Low Brand Loyalty: Users may easily switch platforms merely for lower fees or subsidies, making it difficult to build a strong brand like Coca-Cola.

3. Innate Wariness of Hype and "New Paradigms"

Having lived through multiple market bubbles, Munger is wary of any new concept claiming to "revolutionize the world." He sees the fintech space as rife with speculation and hype, reminiscent of the 2000 dot-com bubble. The sky-high valuations of many companies are often based not on current profitability, but on unrealistic future expectations.

4. Questioning the Ethics and Social Value of Business Models

This is where Munger's criticism is most intense. He believes some fintech companies profit by exploiting human weaknesses (like greed and gambling instincts), which is harmful to society.

Example of Robinhood: He has repeatedly lambasted Robinhood, accusing it of using a "gamified" interface and zero-commission model to lure inexperienced retail investors into frequent, high-risk speculative trading, akin to "a casino luring gamblers." He deemed this business model "dirty" and "unethical."
Encouraging Speculation Over Investment: He believes a good financial system should encourage prudent, long-term investment, whereas many fintech apps facilitate short-term speculation and gambling behavior.

5. Regulatory Risk and Arbitrage

Munger argues that the early success of many fintech companies stemmed partly from exploiting regulatory gaps or delays – "regulatory arbitrage." They operated in areas heavily regulated for traditional banks, but with more flexibility and lower costs. However, Munger foresees that regulators will inevitably step in over time to close these loopholes. Once subjected to the same regulatory framework as traditional financial institutions, their cost advantages and business models may vanish.

6. Extreme Disdain for Cryptocurrencies

While cryptocurrencies are only a subset of fintech, Munger's views on them best represent his profound distrust of "new finance." He has used a series of sharp terms to describe cryptocurrencies:

"Rat poison squared" (his exact words)
"Venereal disease"
"Good for kidnappers, extortionists, and terrorists"
"Stupid, unethical, and socially harmful"

He sees cryptocurrencies as having no intrinsic value, being purely speculative instruments whose anonymity facilitates illegal activities, with the entire ecosystem rife with fraud and mania.

Summary

Charlie Munger does not reject all technology applied in finance. He acknowledges technology can improve efficiency and reduce costs. However, the "fintech" he criticizes specifically refers to companies with questionable business models, those that encourage speculation, exploit regulatory loopholes, have inflated valuations, and lack solid moats.

In his view, a good investment is the long-term ownership of a great business that creates real, sustainable value for society. Many phenomena in the current fintech landscape run directly counter to this fundamental investment philosophy. Consequently, his public stance is almost entirely negative.