Munger @ Daily Journal AGM: Part 1

Buying stocks in frenzy In fact, what a lot of shareholders actually do is crowd in buying stocks on frenzy - frequently on credit - because they see that they're going up. And, of course, that's a very dangerous way to invest. I think that shareholders should be more sensible and not crowd into stocks and buy them just because they're going up and they like to gamble. New brokerages luring amateurs Well, it's most egregious in the momentum trading by novice investors lured in by new types of brokerage operations like Robinhood. I think all of this activity is regrettable. I think civilisation would do better without it. You'll remember that when the first big bubble came, which was the South Sea bubble in England back in the 1700s, it created such havoc eventually when it blew up that England didn't allow hardly any public trading and securities of any companies for decades thereafter. It just created the most unholy mess. So, human greed and the aggression of the brokerage community create these bubbles from time to time. And I think wise people should just stay out of them. Is value investing old-fashioned? What about passive investing? Value Investing will never go ou

This article was originally published on May 24, 2021.