Charlie Munger has been Warren Buffet’s loyal lieutenant. He is often critical of anything that challenges the stock market’s traditional logic. Investors who spent more than traditional stock on the COVID-19 market created a buzz and triggered a flood of criticism.
Stock Market is as addictive as gambling
Investors don’t always target traditional stock anymore. They end up buying high risk shares in an attempt to make quick profits. Munger doesn’t like this high-risk investment. He said that it is more similar to gambling than any other type of investment.
He said it’s almost like an addiction. Munger said that gambling is a popular pastime. Munger explained that there are two types of investors today in the stock market: those who are interested in long-term investment and investing accordingly, and those who are more inclined to spend more and quickly without considering the risk factors.
Munger likes long-term investors and he doesn’t approve of those who “do” casino gambling. Munger rhetorically asked, “Now, what earthly benefit is it for our nation to make the casino portion of capitalism more efficient, more attractive, more seductive, and greater?
Treating the stock market like a casino may not be a good idea, but the man cannot see a way out. Munger believes that this kind of behavior will continue to be part of the status-quo and dictate the behavior of less risk-averse investors . Munger also said that investors may have misunderstood stock markets.
Stock Exchange Floors: Property Market Lessons
Munger stated that investors are learning from the property market, where real estate can often be purchased and sold faster. This logic was applied to the stock market and many were able to quickly divest their portfolios.
He said that the stock market’s addictive nature has already cost many people a lot of their money. He cautioned investors that they should be careful when choosing stocks to invest in. Munger has previously provided similar critical reviews of other assets. He blasted cryptocurrency as ” stupid gaming” in February. This is what he wanted.