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Charlie Munger, Berkshire Hathaway vice-chairman, and Warren Buffett’s right hand blasted SPACs. On Wednesday, Munger said in the Daily Journal annual meeting that the "world would be better off " without them adding that the SPAC era "must end badly," whenever it will happen.

"Crazy speculation in enterprises not even found or picked out yet is a sign of an irritating bubble. The investment banking profession will sell sh-t as long as sh-t can be sold." Munger said.

SPACs a mnemonic for special purpose acquisition companies, or blank check companies are Shell Corporations listed on stock exchanges. However, SPACs acquire private companies directly, instead of going through the process of initial public offering (IPO). That said, traders are at risk of losing money since they don’t know what that particular SPAC they invested in will be buying.

In 2020, it took at least 10 months to reach the 130 SPAC mark. However, it only took 2 months in 2021 to reach 133 SPACs. Additionally, the 133 SPACs raised around $40 billion on the U.S. stock markets. The growing trend of SPACs raised an alarm among investors and traders. However, other billionaires have different opinions.

For instance, billionaire investor Chamath Palihapitiya said that SPACs make the process of initial public offering less daunting. In an interview last October, Chamath said “In a traditional IPO you can’t show a [financial] forecast and you can’t talk about the future of how you want to do things, you’re just not allowed.”

Charlie Munger Criticizes GameStop Investors

Munger had also commented on the GameStop (NASDAQ: GME) frenzy. The billionaire described GME traders as “racehorses” gamblers.

"That's the kind of thing that can happen when you get a whole lot of people who are using liquid stock markets to gamble the way they would bet on racehorses," Munger said.

"The frenzy is fed by people who are getting commissions and other revenues out of this new bunch of gamblers. When things get extreme you have things like that short squeeze. It's very dangerous and it's really stupid to have a culture that encourages as much gambling in stocks by people who have the mindset of racetrack bettors. Of course, that is going to cause trouble, as it did." He added.

In recent weeks, GameStop stock soared to a new all-time high of $486 after Redditors at WallStreetBets Reddit group invested in the stock. Consequently, amateur investors suffered exorbitant losses after the GME stock plunged back to $45 once the short-squeeze effect faded.