Buffett: I've never seen people with such a strong gambling mentality as now

On May 3rd, during an interview with CNBC, Warren Buffett described the market as a “church with a gambling aspect” — drawing a clear line between traditional value investing and the current fervor for short-term options trading and growing market speculation. “People can switch back and forth between the church and the casino,” he said. “I’d say more people are in the church than the casino, but the casino has gotten really attractive lately.” He added: “If you’re buying or selling one-day options, that’s not investing — nor is it speculation. It’s gambling.” Buffett noted that current “gambling-like” market sentiment has hit a peak. “We’ve never seen people with such a strong gambling mindset as we do right now,” he stated. He also cited a recent case involving a U.S. soldier who allegedly used classified information tied to a military operation in Venezuela to make roughly $400,000 in the options market. The U.S. Department of Justice is currently prosecuting the case. “Without insider info, no one can explain why someone would buy one-day options — just because they knew when we’d be going into Venezuela — and make over $400,000,” Buffett said. “The volume of these trades is simply incredible.” Berkshire Hathaway held its annual shareholders meeting on May 2nd — the first since Warren Buffett handed over the CEO role to Greg Abel earlier this year. Ahead of the meeting, Berkshire’s latest financial report showed its cash reserves had hit a record high, nearing $400 billion.