Warnings are mounting that the stock market has transformed into a giant "casino."
Bill Ackman, CEO of Pershing Square, who is often called the "Little Buffett," recently said in an interview with U.S. broadcaster CNBC, "With excessive leverage and speculative trading, I feel like 'the market is broken' every few days," strongly criticizing that "stocks are trading at incomprehensible prices."
Ackman pointed out that "the market has returned to the casino floor of the era when extreme leverage reaching 95% was applied," noting that such short-term betting and volatility can be buying opportunities for long-term investors, but pose a serious threat to society as a whole and the economy.
He is not the only hedge fund titan issuing warnings.
Elliott Investment Management, which manages $80 billion in assets, also stated in a letter to investors sent in October, "Almost every warning alarm signaling the arrival of a bear market is sounding," comparing the current stock market situation to the "Roaring Twenties" just before the Great Depression of the 1930s.
Elliott specifically warned that FOMO (Fear of Missing Out), the psychology of jumping in out of fear of missing out on profits, could transform into FOGO (Fear of Getting Obliterated), the terror that one's account could be ruined in an instant.
Amid a situation where circular investments by artificial intelligence (AI) companies and debt-dependent capital expenditures are inflating a bubble, the analysis suggests that if expectations for AI profitability or infrastructure construction weaken, the harshest market shock in decades could arrive.
As veteran Wall Street investors successively turn on warning lights, caution regarding the uncertainty of the overheated stock market continues to grow.
(Reported by Lee Hyeon-yeong | Video by Lee Da-in | Design by Lee Su-min | Produced by SBS Digital News)
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