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UPDATE 1-Charlie Munger warns of market excesses, frowns on gambling mentality and bitcoin

Reuters2021-02-25

(Adds additional comments from Munger)

By Jonathan Stempel

Feb 24 (Reuters) - Charlie Munger, the longtime business partner of Warren Buffett, on Wednesday suggested the stock market environment bears signs of a bubble, reflecting a "dangerous" mentality among some investors to gamble on stocks as they would horse races.

Munger, 97, was speaking at the annual meeting of Daily Journal Corp , the Los Angeles newspaper publishing company he chairs.

He remains better known for his work at Buffett's conglomerate Berkshire Hathaway Inc , where he has been vice chairman since 1978. The Daily Journal meeting was webcast on Yahoo Finance.

Munger said the recent surge in the share price of GameStop Corp , which left some hedge funds caught in a short squeeze because they bet on a decline, reflected a horse-racing mentality toward stocks.

"It's really stupid to have a culture" encouraging such gambling in stocks, calling the frenzied buying of stocks only because prices are rising "a very dangerous way to invest."

Asked if the market now might suffer the same fate as the technology bubble from the late 1990s, Munger said: "Yes, I think it must end badly, but I don't know when."

Munger also addressed other topics, including the surging interest in bitcoin, which he would not own.

"I don't think bitcoin is going to end up as the medium of exchange for the world" because it's too volatile, Munger said.

He paraphrased the author Oscar Wilde's quotation about fox hunting to describe bitcoin, calling it "the pursuit of the uneatable by the unspeakable."

Berkshire is expected on Saturday to release its fourth-quarter and year-end results, and Buffett's widely read annual shareholder letter.

(Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama and Richard Chang)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))

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Comment1

  • yamehyameh
    ·2021-02-25
    So salty
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    • yamehyameh
      It’s really stupid to have sold airlines at the absolute bottom too
      2021-02-25
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