Warren Buffett’s long-time business partner Charlie Munger on Wednesday indicated an uptick in the stock market environment, reflecting a “dangerous” mentality among some investors to downsize the stock as they raced.
Munger, 97, was speaking at the annual meeting of the Daily Journal Corp., a Los Angeles newspaper publishing company.
He is better known for his work at Buffett’s group Berkshire Hathaway Inc., where he has been a vice president since 1978. The Daily Journal meeting was a webcast on Yahoo Finance.
Munger said that GameStop’s recent surge in stock price, which left some hedge funds in a small squeeze as they placed bets on the decline, reflected a horse-racing mentality towards stocks.
“It’s really stupid for a culture” to encourage such gambling in stocks, only to call frenzied purchases of shares because prices are rising “a very dangerous way to invest.”
Asked if the market could now hurt the same fate as the technology bubble from the late 1990s, Munger said: “Yes, I think it should end badly, but I don’t Know when. “
Munger also addressed other topics, including a growing interest in bitcoin, which he did not have.
“I don’t think bitcoin is going to end up as a medium of exchange for the world” because it’s so volatile, Munger said.
He quotes author Oscar Wilde about fox hunting to describe bitcoin, calling it “a search for the unusable by the inexplicable”.
Berkshire is expected to release its fourth-quarter and year-end results on Saturday, and Buffett widely read the annual shareholder letter.