In the latest Berkshire Hathaway Annual Meeting, Charles Munger discusses how stocks are being traded on a casino basis just like your favorite online casinos. Everyone agreed that the budget process was vital, and that some type of financial planning and record keeping was also required for every casino. The majority of those polled agreed that the casino sector is distinct from the hotel, restaurant, and industrial industries, but they do have certain similarities and if you’re interested in playing in online casinos don’t play till you read this so you can find the best options for this. They also acknowledged that the accounting process for record keeping and budgeting must essentially adhere to certain pre-established standard accounting procedures. Nonetheless, many casino executives believed that the whole process was inefficient and should be improved. This common denominator or statement piqued my interest.
Here’s an excerpt from the meeting:
Munger: Well it happened, it’s almost a mania of speculation that we now have. We have computers with algorithms trading against other computers. We’ve got people who know nothing about stocks being advised by stock brokers who know even less. I understand the commission though!
It’s just an incredible crazy situation and it’s weird that we ever got a system where all this activity is all mixed up with a lot of legitimate long-term investment.
I don’t think any wise country would have wanted this outcome. Why would you want your country’s stocks to trade on his favorite casinos basis to people who are just like the people who play craps and roulette in the casino? I think it’s crazy but it happened.
You can watch the entire discussion here:
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