Stock Market Margin Debt Tops $1 Trillion: Is Warren Buffett's "Casino" Warning Starting to Bite?

In his 2023 letter to shareholders, Warren Buffett reminded Berkshire Hathaway investors that major market panics "won't happen often -- but they will happen." They are a fact of life in markets ultimately made up of humans -- humans prone to getting caught up in waves of "feverish activity" and "foolishness."And while this has always been the case, Buffett was particularly concerned with the level to which the modern market appeared "casino-like," pointing out that "the casino now resides in many homes and daily tempts the occupants." Now, two years later, as the S&P 500 (SNPINDEX: ^GSPC) sets new record highs, the total margin debt in the U.S. stock market -- a direct measure of how much risk investors are willing to take and an excellent proxy for investor sentiment -- has surpassed the $1 trillion mark for the first time ever. In recent months it's grown at a pace not seen since major "conflagrations" (as Buffett calls them) of the past like the the global financial crisis of 2007-2009. Investors are borrowing more to invest. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool