"This Is Gambling": 'God of Investing' Pulls Out of Stocks, Signals Shift Amid Sighs

"It is neither investing nor speculation; it is gambling."

Warren Buffett, Chairman of the Board at Berkshire Hathaway and known as the "God of Investing," has warned that the market is turning into a gambling den due to the frenzy surrounding ultra-short-term investments.

According to CNBC on the 15th (local time), Chairman Buffett pointed out that the market is overheating as speculative funds pour into leveraged investments and ultra-short-term options, driven by expectations for the artificial intelligence industry.

Criticizing the current market, Buffett stated, "There are times when an unbelievable number of great opportunities appear at once, but more often, it is a stroke of luck to find even one company worth investing in every few years, and that kind of market is actually more normal."

He added, "In a market where everyone prefers gambling, it becomes much harder to find good, undervalued companies."

As if to signal caution against the overheated market, Berkshire, led by Buffett, has maintained a net selling position in stocks for 14 consecutive quarters.

On the other hand, the company has been increasing its cash reserves. As of the end of the first quarter of this year, Berkshire's holdings in cash and short-term Treasury bills reached a record high of 586 trillion won.

The KOSPI has also been fluctuating recently due to the frenzy for ultra-short-term investments.

Volatility has increased as trading volume has flocked to single-stock leveraged products for Samsung Electronics and SK Hynix, which reflect twice the price volatility of the underlying stocks.

Circuit breakers, which had only been triggered six times in 27 years, have been activated five times since the launch of single-stock leveraged products in May. Similarly, of the 37 sidecar triggers this year, 19 have occurred since May.

Following criticism that these products are exacerbating volatility, the government announced supplementary measures for single-stock leveraged products on the 16th.

The minimum deposit required for leveraged investment will be raised from 10 million won to 30 million won, and the policy of recognizing up to 70% of stock holdings as deposits will be changed to accept only cash.

The trading unit, currently available for one share, is also planned to be expanded to 20 shares. The government stated that it would consider additional measures if necessary.

Reported by Kim Jin-u | Video by Ryu Ji-soo | Design by Lee Jeong-ju | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.