The Stock Market Is Cultivating Gamblers and Not Investors, According to Warren Buffett. What That Means for Anyone Considering Buying Into Flashy IPOs.
Initial public offerings won't unlock instant wealth for retail investors.
Overview
In a July interview with CNBC, former Berkshire Hathaway CEO Warren Buffett warned that investors are increasingly turning into gamblers. "It's tough to find values when everybody is preferring gambling," he said. He added, "But since humans love to gamble so much, there's more money in, in actually cultivating gamblers than there are cultivating investors."
The type of behavior the Oracle of Omaha is talking about, like making excessively risky "bets" in hopes of achieving massive one-time windfalls, can be found across the stock market. But it can be especially abundant with initial public offerings (IPOs). And with a few potential big-name companies, like Anthropic and OpenAI, potentially going public over the next year, some may get lured into a gambling mindset.
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Originally published at www.fool.com.