Charlie Munger Says Gambling on Stock Market Impossible to Fix

Charlie Munger, Warren Buffet’s faithful lieutenant, has often been critical of anything that defies the stock market’s conventional logic. The COVID-19 market brought around a buzz among investors who splurged on anything but traditional stock and with this – they unlocked a torrent of criticism.

Stock Market Proves as Addictive as Gambling

Even when investors target conventional stock these days, they end up buying high-risk shares in the hopes of turning a quick profit. This high-risk behavior does not sit well with Munger, who has said that this type of investment is more akin to gambling than anything else.

It’s like an addiction, he said. “People love gambling, and the trouble is, it’s like taking heroin,” Munger argued. He explained that today’s investors in the stock market are two main types – those who are in for the long-term and invest accordingly and those who are more inclined to spend more money and spend it rapidly without factoring in the risk factors.

The long-term investors are the ones that Munger approves of and those who “do casino gambling,” are those whom he thinks should quit. “Now, what earthly good is it for our country to make the casino part of capitalism more and more efficient, and more and more attractive, and more and more seductive,” Munger asked rhetorically.

While no good may come of treating the stock market as a casino, the man sees no way past that. Munger is convinced that this type of behavior is going to remain very much part of the status quo and continue to dictate the behavior of less risk-averse investors. He also explained that some investors had misunderstood the stock market.

Property Market Lessons Flop on Stock Exchange Floors

Munger said that some investors were taking lessons from the property market – where real estate can be bought and sold quicker – and brought the same logic to the stock market, with many to divest from their portfolios fast.

The man added that the addictiveness of the stock market has already been costing many people a lot of money and cautioned that investors should be prudent in choosing what stocks to buy in the first place. Munger has offered similarly critical accounts of other assets in the past. In February, he blasted cryptocurrencies as “stupid gambling” as is the man’s want.