Buffett warns: Market gambling sentiment is the "strongest in history"! Many asset prices seem extremely absurd

At the annual meeting, Warren Buffett said bluntly that the current market has an unprecedented level of gambling sentiment, and he used the analogy of a church connected to a casino to describe the current state of investing and speculation. He specifically pointed to same-day expiring options and prediction markets as drivers of the current wave of speculation.

On May 2, Warren Buffett made sharp remarks about the current financial markets at Berkshire Hathaway’s annual meeting. “We have never seen people in a more intense gambling mood than now.” According to Fortune, during the lunch break at the meeting, Buffett likened today’s financial markets to a “church connected to a casino,” distinguishing traditional value investing from the present enthusiasm for short-term options trading and prediction markets. He added, “This doesn’t mean investing is terrible, but it does mean that many things’ prices will look extremely absurd.”

“Church connected to a casino”: Buffett separates speculation from investing

Buffett is 95 years old and has just handed over the CEO reins to Greg Abel. At the meeting, he used the metaphor “church with a casino attached” to distinguish between two ways of participating in the market. Value investing (the church) focuses on company fundamentals and long-term holding; speculation (the casino) chases short-term price swings, detached from companies’ profitability.

Buffett also specifically singled out “one-day options” and “prediction markets” as representatives of the current speculation wave. One-day options allow investors to bet on the direction of individual stocks or indexes before settlement on the same day, and in recent years trading volume has grown explosively; prediction markets, meanwhile, let users place bets on election, sports, and macroeconomic data outcomes. Buffett did not deny the value of these tools themselves, but he expressed concern about their role as the mainstream mode of participation.

“Unprecedented gambling sentiment”: direct comments on the market mindset

Buffett’s exact words: “We have never seen people in a more intense gambling mood than now.”

This line stands out especially in the context of Berkshire’s cash position hitting a record high—when the company’s asset allocation is dominated by cash, avoids buying targets with stretched valuations, and aligns operational actions with verbal warnings.

He also added an overall assessment of the market: “This doesn’t mean investing is bad. But it does mean that many things’ prices look extremely absurd.” The tone remains measured—neither predicting a crash nor denying the overall investment logic—only pointing to the distortions in the current valuation structure. For investors tracking Berkshire’s moves, this is Buffett’s direct description of the mindset behind “why the company is holding record-high cash.”

Follow-up to watch: Abel’s succession and Berkshire’s capital allocation

The next point to watch is Berkshire’s specific capital allocation actions after Abel takes over—whether it continues to maintain a high cash level or starts deploying capital. Buffett has handed over decision-making authority to Abel, but he retains the chairman role. Therefore, market attention is on whether Berkshire’s overall judgment of U.S. stock valuations changes during the succession transition period.

• This article is reprinted with permission from: 《Chain News》
• Original title: 《Buffett: Investing and speculation coexist in the same market, warning of unprecedented gambling sentiment》
• Original author: Elponcrab