By Jonathan Stempel (Reuters) – Charlie Munger, Warren Buffett’s longtime business partner, warned on Wednesday that the stock market is showing signs of a bubble, reflecting a “dangerous” mentality among some investors about betting on stocks. as they would with horse racing. Munger, 97, lamented the recent craze for GameStop Corp (NYSE :), in which hobby investors were encouraging each other online to buy the game retailer on platforms like Robinhood, catching some hedge funds in a short bind. . “It‘s really stupid to have a culture that encourages so much action play by people who have the mindset of racetrack gamblers,” he said. “A lot of them are frantically buying stocks, often on credit, because they see that they are going up, and of course that is a very dangerous way to invest.” When asked if the market looked like the dot-com bubble of the late 1990s, Munger said, “Yeah, I think it must end badly, but I don’t know when.” Munger spoke at the annual meeting of the Daily Journal Corp, the Los Angeles newspaper publisher he chairs, which aired on Yahoo Finance. He is best known as the vice chairman of Buffett’s Berkshire Hathaway (NYSE 🙂 Inc conglomerate since 1978. Munger said investors should not buy gold or bitcoins, noting that the latter was too volatile to become a “medium of exchange for the world. “. He paraphrased author Oscar Wilde’s quote on fox hunting to describe bitcoin, calling it “the search for the inedible by the unspeakable.” Munger also expressed his disdain for the growing demand for special purpose acquisition companies, or SPACs, that raise money from investors and then merge with private companies to go public, in “blank check” deals. “The world would be better off without them,” Munger said. “This kind of crazy speculation in companies that haven’t even been found or selected yet is a sign of an irritating bubble,” he said. “It’s just that the investment banking profession will sell shit as long as shit can be sold.”
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