Berkshire Hathaway CEO Warren Buffett castigated Wall Street for supporting speculative behavior in the stock market, effectively turning it into a “gambling parlor.”
Buffett, 91, spoke during his annual shareholder meeting Saturday about one of his favorite targets for criticism: investment banks and brokerages.
“Wall Street makes money, one way or another, catching the crumbs that fall off the table of capitalism,” Buffett said. “They don’t make money unless people do things, and they get a piece of them. They make a lot more money when people are gambling than when they are investing.”
Buffett bewailed that large American companies have “become poker chips” for market speculation. He cited the surge in the use of call options.
“That’s why markets do crazy things, and occasionally Berkshire gets a chance to do something,” Buffett said.
“It’s almost a mania of speculation,” Charlie Munger, 98, Buffett’s long-time partner and Berkshire Hathaway vice chairman, chimed in.
“We have people who know nothing about stocks being advised by stockbrokers who know even less,” Munger said. “It’s an incredible, crazy situation. I don’t think any wise country would want this outcome. Why would you want your country’s stock to trade on a casino?”