Warren Buffet’s partner at the Berkshire Hathaway conglomerate, Charlie Munger, compared today’s financial markets, particularly speculative trading and “meme stocks,” to “taking heroin.”
Warren Buffett’s partner in the Berkshire Hathaway conglomerate, Charlie Munger, compared to the current financial marketsin particular to speculative trading and “meme stocks”, with “take heroin”
“People love to gamble, and the problem is that it’s like taking heroin,” Munger said. “A certain percentage of people when it starts it just exaggerates. It’s that addictive. He is absolutely crazy It has gone mad. Civilization would have been so much better without him,” he added.
The 99-year-old tycoon pointed out that today’s financial markets attract two types of investors: the long-term one and the “player” who wants to bet all the time.
According to munger, the problem arises when the two categories are mixed. “However,what earthly good it does our country to make the casino part of capitalism more and more efficient, and more and more attractive, and more and more seductive? It’s insane public policy.”
However, it was shown little optimistic about the possibilities of changing it and said that he considers them “practically nil”.
One factor that he sees as a motivator for the current scenario is high liquidity of shares, which allows you to buy and sell in seconds, adding that “speculation in shares has gone crazy.”
“When I was at Harvard Law School, it was rare that they paid a million shares a day”, he clarified, referring to the daily volume of transactions. “Maybe it would happen once or twice a year. Now they trade billions of shares every day,” she said.
Both Munger and Buffet have been against other volatile investments, such as cryptocurrencies.
Source: Ambito
