Wall Street Heavyweight Issues Warning: "The Stock Market Is Completely Broken... Now at an Incomprehensible Level"

"Stocks trading at prices I can't understand"

Bill Ackman, the billionaire hedge fund manager and chairman of Pershing Square Capital known as “Little Buffett,” criticized excessive speculative trading and leverage for turning the stock market into a casino.

"I feel the market is broken"

Bill Ackman, chairman of Pershing Square Capital. AP-Yonhap News

On November 3 (local time), Ackman appeared on CNBC, a U.S. business news network, and said, "Every few days, I feel that the market is broken," adding, "Stocks are trading at prices I can't understand." He added, "For long-term investors, it may be good to be able to buy at absurd prices, but I don't think it's good for the country as a whole."

"We've returned to a casino-like market, like the one we had when leverage was as high as 95%," he said, noting that "this is inherently bad for the economy and society, and it is driving stock prices sharply higher."

Ackman warned that while this market volatility could be an opportunity for long-term investors to buy at lower prices, it poses a risk to investors seeking to make a fortune overnight through short-term leveraged products, perpetual futures, and sports betting, and could ultimately lead to disastrous consequences.

"'FOMO' could turn into 'FOGO'"

Stock market indices are displayed in the dealing room at Hana Bank headquarters in Jung-gu, Seoul, as the KOSPI opened lower on the 3rd. Photo by Kim Hyunmin

This is not the first warning about the stock market. Elliott Investment Management, a hedge fund manager, previously warned that FOMO (Fear of Missing Out), the anxiety investors feel about missing out on opportunities to make profits, could quickly turn into FOGO (Fear of Getting Obliterated), the fear of suffering massive losses.

According to The Wall Street Journal (WSJ) and other outlets on November 2, Elliott said in a letter to investors in October, "Nearly every alarm signaling the arrival of a bear market is going off in the current stock market." It compared market conditions at the time to the "Roaring Twenties" just before the Great Depression of the 1930s.

"Even if just one or two of the many factors driving the bull market become disrupted, the market's upward momentum could reverse in an instant," Elliott said, invoking the term FOGO, a step beyond FOMO.

Elliott warned of circular investments between AI model developers and infrastructure manufacturers, debt-fueled capital expenditures, and the anti-AI movement. It added that if investors begin to question AI pricing or expectations for infrastructure buildout falter, the market shock could reach historic levels and be as severe as any bear market in recent decades.

This content was produced with the assistance of AI translation services.