Buffett: I have never seen people with such a gambling mentality as they have now.

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BlockBeats News, May 3rd, Warren Buffett, in an interview with CNBC, compared “the market to a church with a casino attached,” distinguishing traditional value investing from the current enthusiasm for short-term options trading, as well as the rising interest in market prediction.

He said: “People can switch back and forth between the church and the casino. I would say there are more people staying in the church, but the casino has become very attractive now.”

He added: “If you’re buying or selling one-day options, that’s not investing, nor is it speculation, it’s gambling.” Buffett stated that this “gambling-like” market sentiment has now reached a peak. He said: “We’ve never seen people with such a gambling mentality as they do now.”

He also mentioned a recent case involving an American soldier: the soldier allegedly used confidential information related to military operations in Venezuela to profit about $400k in market predictions. The U.S. Department of Justice is currently prosecuting this case. Buffett said: “Without insider information, no one can explain why someone would buy one-day options, for example, just because they know when we will enter Venezuela, and make over $400,000… The volume of such trades is simply unbelievable.”

Berkshire Hathaway held its annual shareholder meeting on May 2nd — the first meeting since Warren Buffett handed over the CEO role to Greg Abel earlier this year. Before the meeting, Berkshire’s latest financial report showed its cash reserves had reached a record close to $400 billion.

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