Warren Buffett says the stock market has turned into 'gambling' — what that means for Canadians

In a wide-ranging interview with CNBC, the 95-year-old Berkshire Hathaway chair took aim at retail investors piling into the hottest stock of the moment and into same-day options contracts, comparing the behaviour to gambling rather than investing. Despite major indices hitting record highs, Buffett said meaningful buying opportunities have become harder to find precisely because so much of the market is now driven by speculation rather than business fundamentals.

“There are times when opportunities are just thrown at you so fast you … it’s unbelievable,” Buffett said. “And then there’s other times when you’re very, very lucky if you find one thing in a couple of years. And it should always be that the latter is what prevails. But since humans love to gamble so much, there’s more money in actually cultivating gamblers than there are cultivating investors.”

Quick trades versus long-term value

Buffett has built his fortune on a simple, patient rule: find a company with strong fundamentals trading below its worth, buy in, then wait — sometimes for decades — for the market to catch up. He and his longtime partner Charlie Munger preferred paying a fair price for a wonderful company over a bargain price for a mediocre one. That discipline helped grow Berkshire Hathaway into a business worth roughly US$1 trillion (~C$1.4 trillion).

That buy-and-hold approach carries a tax advantage in Canada, too, though it works differently than it does in the U.S. Gains earned inside a Tax-Free Savings Account (TFSA) are never taxed, and gains inside a Registered Retirement Savings Plan (RRSP) are deferred until money is withdrawn. Outside those registered accounts, only 50% of a capital gain gets added to taxable income — so frequent trading in a non-registered account can trigger more tax events than simply holding on would.

Many of today’s most-hyped names — SpaceX, Micron and GameStop among them — trade on U.S. exchanges, but they’re just as accessible to a Canadian investor through any self-directed brokerage account. That accessibility cuts both ways: it’s easier than ever to buy in on a whim, and just as easy to get burned chasing the crowd.

Canadians are watching the same speculative wave — and staying skeptical

Buffett isn’t alone in drawing a line between investing and gambling. A recent Ipsos poll conducted on behalf of CIBC Investor’s Edge, the self-directed trading arm of the Canadian Imperial Bank of Commerce (CIBC), found roughly 3 out of 4 Canadians (74%) view prediction markets — the event-based betting platforms drawing new attention alongside stocks — as closer to gambling than investing. More than half (57%) said those products don’t belong on investment platforms at all.

Federal regulators are watching too. The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued a joint bulletin reminding investors and the industry that event contracts and prediction markets remain subject to Canadian securities rules, even when offered through foreign platforms.

In fact, prediction markets were conditionally approved in Canada earlier this summer, and can only be used for economic indicators, financial markets and climate trends rather than sporting events, future elections or pop culture. Wealthsimple Predict is the first platform to be offered to Canadians.

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History repeats — even when Buffett is early

Buffett’s caution has gone unheeded before. During the run-up in technology stocks in the late 1990s, he refused to buy in, and critics wrote him off as out of touch. When the dot-com bubble burst, his patience — and Berkshire’s returns — looked prescient again.

Buffett’s own admission: luck, timing and a head start

Despite his reputation as the “Oracle of Omaha,” Buffett told CNBC that a lot of his success comes down to luck — just not the kind people usually assume. “I have been lucky and healthy to get to 95 ... and, fortunately, I got exposed, partly accidentally, to what I liked to do very early on,” he said, crediting early lessons from his father, who owned a stock brokerage. “That was just an accident. If my father had been a plumber, I would not have had the same advantage I had. So I was incredibly lucky.”

What Canadian investors can take from this

Buffett’s warning isn’t really about any one stock or trading app — it’s about the mindset behind the decision. A few practical takeaways:

• Use registered accounts for long-term holding. A TFSA shelters growth from tax entirely, and an RRSP defers it — both reward patience more than frequent trading does.
• Know the difference between investing and speculating. If a purchase depends on a stock staying popular rather than the underlying business performing, that’s closer to gambling than investing.
• Be cautious with prediction markets and 1-day options. These products are legal in Canada but closely monitored by the CSA and CIRO — confirm any platform offering them is properly registered before using it.
• Understand the tax cost of frequent trading. Outside a TFSA or RRSP, every profitable sale adds 50% of the gain to taxable income — a cost that adds up quickly with short-term trades.