Warren Buffett Warns Investors as the Stock Market Sounds an Alarm. History Says This Will Happen Next.
Warren Buffett says traders as treating the stock market like a gambling parlor.
Overview
Through decades of disciplined investing, Warren Buffett turned Berkshire Hathaway from a struggling textile manufacturer into one of the largest companies in the world. Under his leadership, Berkshire Class A shares returned 19.7% annually over six decades, while the S&P 500 (SNPINDEX: ^GSPC) gained 10.5% annually.
Buffett, now 95, stepped down as Berkshire's CEO last year, but he recently shared a grim warning with investors during a CNBC interview. "We've never had people in a more gambling mood than now." Buffett also said traders were treating the stock market like a casino.
Details
Of course, Buffett has regularly warned about the dangers of gambling in the stock market, so investors may be inclined to brush aside his latest words of caution. Unfortunately, there is a very good reason to take him seriously. The S&P 500 is incredibly expensive by historical standards. So expensive, in fact, that the index has never delivered a positive three-year return from its current valuation.
Source
Originally published at www.fool.com.