Warren Buffett, Chairman of Berkshire Hathaway's Board of Directors, warned on May 15 that 'when everyone prefers gambling, it's hard to find value,' as concerns mount that Korean stocks face similar speculative risks. Buffett told CNBC the market atmosphere has shifted toward short-term speculation rather than long-term investment, noting that 'humans love gambling so much that it's more profitable to cultivate gamblers than investors.' The warning comes as Korea's credit margin balance hit a record 37.2 trillion won on the 8th—an 18 trillion won increase from the same day last year—while single-stock leverage ETFs for Samsung Electronics and SK Hynix launched May 27 have drawn significant retail inflows, prompting the Financial Supervisory Service to announce stricter oversight on the 6th.
Buffett Warns US Stocks Resemble Casino as 0DTE Options Surge
Buffett told CNBC on May 15 that 'there are times when opportunities pour in unbelievably, but there are also times when finding one good investment opportunity every few years is lucky. A normal market is the latter.' He criticized the surge in same-day expiration options (0DTE) spread by platforms like Robinhood as 'gambling, not investing.' In May, Buffett compared the stock market to 'a church with a casino attached.'
According to CryptoBriefing on May 5, 0DTE options accounted for 48% of retail options trading. Investing.com reported US margin debt reached a record $1.42 trillion in May. CNBC noted retail investors are flocking to AI semiconductor stocks, recently listed SpaceX shares, various options, and leveraged ETFs, while prediction markets like Kalshi and Polymarket are growing rapidly with bets on sports, political events, and stock price directions.
Korea Credit Margin Balance Hits Record 37.2 Trillion Won Amid Leverage ETF Boom
Korea's credit margin balance—a key 'debt investment' indicator—reached 37.2 trillion won on the 8th, the highest on record, according to the Korea Financial Investment Association. This represents an increase of over 18 trillion won compared to the same day last year (20.1 trillion won). The balance subsequently declined for six consecutive trading days, dropping to 34.8 trillion won on the 13th, the lowest level in about three months. Credit margin balances typically rise alongside stock prices, and the recent decline is attributed to a KOSPI correction.
Single-stock leverage ETFs for Samsung Electronics and SK Hynix, launched May 27, have shown concentration effects. These products amplify individual stock returns by multiples and have absorbed substantial retail funds since launch, intensifying capital concentration between KOSPI and KOSDAQ, according to market analysis. Like US 0DTE options—which can become worthless due to volatility just before expiration even if the direction is correct—single-stock leverage ETFs structurally resemble high-risk products as they directly amplify daily volatility of individual stocks.
FSS Announces Tighter Supervision on Excessive Leverage Marketing
Financial authorities have responded to the surge in debt investment. The Financial Supervisory Service announced at the 3rd Consumer Risk Response Council held on the 6th that it will strengthen management and supervision of business practices inducing excessive debt investment and excessive marketing by leverage ETF operators.
An FSS official stated, 'We asked for management from an investor protection perspective regarding excessive credit solicitation, insufficient risk disclosure, and cases where unsettled trades are executed without the investor's knowledge.' The official emphasized that while risk management systems are operating according to best practice standards, they should be operated flexibly for investor protection rather than formally and mechanically. Securities firms are also rolling out measures such as credit purchase restrictions and margin rate increases.
FAQ
What did Warren Buffett say about the US stock market on May 15?
Buffett told CNBC on May 15 that 'when everyone prefers gambling, it's hard to find value,' warning that the market atmosphere has shifted toward short-term speculation rather than long-term investment. He stated that 'humans love gambling so much that it's more profitable to cultivate gamblers than investors' and criticized same-day expiration options (0DTE) as 'gambling, not investing.'
How high did Korea's credit margin balance reach?
Korea's credit margin balance hit a record 37.2 trillion won on the 8th, according to the Korea Financial Investment Association. This represents an increase of over 18 trillion won compared to the same day last year (20.1 trillion won). The balance subsequently declined for six consecutive trading days, dropping to 34.8 trillion won on the 13th.
What action did the Financial Supervisory Service announce on the 6th?
The FSS announced at the 3rd Consumer Risk Response Council held on the 6th that it will strengthen management and supervision of business practices inducing excessive debt investment and excessive marketing by leverage ETF operators. An FSS official stated the agency asked for management regarding excessive credit solicitation, insufficient risk disclosure, and cases where unsettled trades are executed without the investor's knowledge.
