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Warren Buffett opposes gambling in casinos and the stock market


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Gambling in the stock market goes beyond mere speculation. One of the habits Buffett has especially spoken out against as a form of gambling is borrowing money to buy stocks. The Financial Industry Regulation Authority (FINRA) reports that investors have started to buy more and more stocks on margin, meaning they're borrowing money to buy them.


In September, investors had more than $654 billion in margin debt. That's an increase from August when the number was in the $645 billion range. If this trend continues, there could be a new record for margin debt soon. The current record was set in January 2018 when investors held $665.7 billion in margin debt. Buffett has said there's no reason to buy stocks on margin unless they are "in a hurry to get rich and willing to go broke." He also advises investors to "get rich slowly."


Buffett has also said in a CNBC interview in 2017 that China's stock market sometimes has casino-like characteristics because it is relatively young compared to U.S. stock markets. The Shanghai Stock Exchange opened in 1990, while the New York Stock Exchange has been in operation since the late 18th century.


Warren Buffett is often referred to as the "Oracle of Omaha," so investors would do well to listen to his advice about the stock market and gambling. Many people could probably say they have gotten rich from listening to Buffett's wisdom on investing.



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Guest longinvestor

Great reminder. Trust the vast majority of folks to make it harder than necessary. Of course, we’re dealing with the human condition.

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