Charlie Munger Warns of Market “Frenzy”; disapproves of gambling mentality, bitcoin, SPAC By Reuters

© Reuters.  Fiserv Earnings inline, Revenue Beats In Q2

2/2 © Reuters. FILE PHOTO: FILE PHOTO: GameStop business information is displayed in the Robinhood 2/2 app

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.”

Disclaimer: Fusion Media wishes to remind you that the data contained on this website is not necessarily accurate or in real time. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges but by market makers, so the prices may not be accurate and may differ from the actual market price, which means that prices are indicative and are not appropriate for commercial purposes. Therefore, Fusion Media assumes no responsibility for any business losses you may incur as a result of the use of this data. Fusion Media or anyone involved with Fusion Media will not accept any responsibility for loss or damage as a result of reliance on information, including data, quotes, charts, and buy / sell signals contained on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.