Warren Buffett Warns Investors as the Stock Market Sounds an Alarm. History Says This Will Happen Next.
Yahoo Finance ·
Through decades of disciplined investing, Warren Buffett turned Berkshire Hathaway from a struggling textile manufacturer into one of the largest companies in the world. Under his leadership, Berkshire Class A shares returned 19.7% annually over six decades, while the S&P 500 ( ^GSPC 0.45% ) gained 10.5% annually. Buffett, now 95, stepped down as Berkshire's CEO last year, but he recently shared a grim warning with investors during a CNBC interview. "We've never had people in a more gambling mood than now." Buffett also said traders were treating the stock market like a casino. Of course, Buffett has regularly warned about the dangers of gambling in the stock market, so investors may be inclined to brush aside his latest words of caution. Unfortunately, there is a very good reason to take him seriously. The S&P 500 is incredibly expensive by historical standards. So expensive, in fact, that the index has never delivered a positive three-year return from its current valuation.
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