Berkshire Hathaway’s Warren Buffett warns investors not to gamble on stocks as ‘it’s not as easy as it sounds’

Stock trading platforms that allow people to buy and sell stocks for free, such as Robinhood, are encouraging gambling, Buffett says

Omaha, Nebraska-based Berkshire on Saturday reported first-quarter earnings of US$11.7 billion compared to a loss of US$49.7 billion a year earlier

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Berkshire Hathaway chairman Warren Buffett said that most people will fare better by owning an S&P 500 index fund instead of betting on individual stocks. Photo: Reuters

Published: 12:37pm, 2 May 2021Updated: 12:37pm, 2 May 2021

Billionaire Warren Buffett warned people not to think investing is an easy way to make a fortune as he answered a variety of questions at Berkshire Hathaway’s annual meeting on Saturday.

Buffett said it can be tough to pick the long-term winners. He pointed out that in 1903 there were more than 2,000 car companies, and nearly all of them failed even though cars have transformed the country since then.

“There’s a lot more to picking stocks than figuring out what will be an incredible industry in the future,” said Buffett, who is known for his remarkably successful investing record. “I just want to tell you that it’s not as easy as it sounds.”

Buffett has said that most people will fare better by owning an S&P 500 index fund instead of betting on individual stocks. He said many of the novice investors who jumped into the market recently and drove up the value of video game retailer GameStop are essentially gambling.

Warren Buffett said that novice investors who jumped into the market recently and drove up the value of video game retailer GameStop are essentially gambling. Photo: Reuters

Buffett said the stock trading platforms that allow people to buy and sell stocks for free, such as Robinhood, are only encouraging that gambling.