Warren Buffett ups the heat on Wall Street

He thinks the world of finance has turned stocks and shares into a game of chance.  

Rolling the dice 

Warren Buffett may have built and preened a reputation of investing excellence over the years, but that doesn’t mean he doesn’t have a stern word in reserve for Wall Street’s traders. If anything, his reputation stems more from prudent investing than an all-or-nothing portfolio – and that seems to put him at odds with investing’s current mainstream.  

At his annual shareholder meeting, Buffett lambasted investment banks and brokerages, accusing them of turning Wall Street into a gambling game: “We have people who know nothing about stocks being advised by stockbrokers who know even less.” 

The house always wins 

Buffett’s anger isn’t new. He’s frequently turned a critical eye to some of Wall Street’s cowboys who, in his eyes, make a living from peddling fortunes. The “money shufflers” in question have made serious bank over the pandemic period, and this has drawn Buffett’s anti-gambling ire.  

And what truth is there to Buffett’s tirade? Certainly some. Retail investors flooded into the stock market when the pandemic first broke out and up until recently, have been fairly pleasantly riding the wave. But with interest on the rise and the global equity markets on the slide, these newbies have certainly seen better days.  

This is really where Buffett’s criticism rings true. Investing intermediaries are always cashing a cheque somewhere in the process, even when their clients are footing the risk. There’ll always be investors in the stock markets, but smart investing remains an elusive trick.