Warren Buffett Warns Investors Are in a Gambling Mood, Flags Risky ETF Trends

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Warren Buffett warned that investors are in a more gambling mood than ever before, speaking at the 2026 Berkshire Hathaway shareholder meeting. He pointed to the proliferation of leveraged single-stock and complex option-income exchange-traded funds, with nearly 700 new ETFs launched so far in 2026 and roughly 200 categorized as leveraged or inverse. Since the start of 2025, more than 200 ETFs have been launched under the synthetic income label, including zero-days-to-expiration option strategies and products quoting distribution rates of 100% or more. Buffett also noted that the Shiller CAPE ratio, which divides the S&P 500 price by 10-year average inflation-adjusted earnings, is near an all-time high, indicating U.S. stocks are historically expensive. He advised long-term investors to focus on quality, diversification, and strategies aligned with their objectives and risk tolerance.

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