Warren Buffett Says Today's Investors Are Making This Big Mistake

The stock market might be soaring, but the Oracle of Omaha is not impressed. In an interview with CNBC on Wednesday, Warren Buffett lamented what he characterized as a lack of opportunity for value-seeking investors in the stock market today.

The former Berkshire Hathaway CEO criticized the rise of speculative trading that resembles recreational betting more than fundamentals-based investing. “It’s tough to find values when everybody is preferring gambling,” he said.

This isn’t the first time Buffett has criticized a burgeoning derivatives market that is increasingly divorced from traditional Wall Street approaches to wealth-building. At Berkshire Hathaway’s annual shareholder meeting in May, he called the stock market “a church with a casino attached” in an interview with CNBC during the meeting.

“We’ve never had people in a more gambling mood than now. But that doesn’t mean that investing is terrible. It does mean that prices for an awful lot of things will look very silly,” he said.

While there have always been amateur stock-pickers, the number of retail investors skyrocketed during COVID-19 and has been notching record highs ever since. The disruption of lockdowns that disconnected huge numbers of people from their jobs and routines prompted millions to go online and discover the world of financial markets.

Pandemic-era meme stock crazes sent stocks like GameStop on wild swings, while more recent hype around high-flying stocks like SpaceX pulled in an even wider audience.

A JPMorgan Chase analysis found that the amount of money retail investors sunk into the market jumped by 50% from 2023 to 2025. What’s more, a growing share of these new participants are young adults: In 2024, 37% of 25-year-olds used investment accounts, up from just 6% a decade earlier.

Prediction markets drive a growing volume of trades increasingly untethered from market fundamentals. These platforms are nominally derivatives markets overseen by the Commodity Futures Trading Commission, or CFTC. But instead of buying options for coffee or copper, as commodities traders have for years, users of apps like Kalshi or Polymarket trade contracts tied to “yes or no” outcomes for future events in sports, geopolitics, finance and more.

Although loose regulation of prediction markets has raised concerns about insider trading and teens gambling, adoption continues to grow by leaps and bounds.

'That's not investing,' according to Warren Buffett

In his May interview with CNBC, Buffett correctly pointed out that many prediction market users aren’t "investing" in any conventional sense. "There’s nobody that can explain why they’re buying an option for one day," he said. "If you’re buying one-day options, or selling them... that’s not investing, it’s not speculating, it’s gambling."

While both Wall Street traders and prediction market bettors are ultimately trying to make money, the latter often don't have a strategy beyond a get-rich-quick aspiration.

But a lack of strategy doesn’t stop them from spending. Trading volume on prediction markets Kalshi and Polymarket has skyrocketed in recent months, ballooning from less than $5 billion in September 2025 to roughly $24 billion in April, nearly a fivefold increase, according to an analysis from the Pew Research Center.

This year's FIFA World Cup supercharged that momentum, with U.S. fans projected to bet $2.5 billion on prediction markets over the course of the tournament.

Retail turnover in stocks and ETFs, which reflects both buying and selling, is hovering near record highs, according to VandaTrack. The financial data and analytics platform looked at trading activity going all the way back to 2012 and found that turnover is at the 99.7th percentile.

In other words, speculating investors are flipping assets at a blistering rate — the exact opposite of Warren Buffett's legendary buy-and-hold patience that made him a billionaire.