Warren Buffett is not fond of how the markets have started to resemble a casino

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by bitkogan

“For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young,” he wrote in his annual shareholder letter.

The reality is that the stock market has always been and remains a money game.

Even if someone considers themselves an investor who, before buying a stock (and holding it for years), thoroughly examines the company’s business, management quality, macroeconomic environment, and all that, they are still placing a bet.

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A bet that the published results are accurate, unambiguous, and won’t drastically change in the future, that the quality and motivation of the management will remain unchanged over a year, two, or five, etc.

Purchasing growth stocks is, by nature, a gamble.

Buffett’s advice to speculators is undoubtedly wise: Remember who is really making money from your gambling—the House.

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However, the simplicity and accessibility of market operations, which dismay the Maestro, have radically cheapened them. In his younger days, commissions were so high it’s debatable when the House earned more, especially in relative terms.

Regarding potential risks, such as the rapid spread of panic sentiments, nothing akin to Black Monday has come close in the digital age.

 

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