There are a lot of tall tales about the stock market. So many, in fact, that you might expect to see Paul Bunyan and Babe the Blue Ox stroll through the Wall Street Exchange. At their most benign, these myths offer some amusement. But at their worst, they can curtail you from investing altogether — leaving money on the table, instead of your wallet.
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Finding the biggest stock market myths to address them can be a challenge. So, I decided to start with one. And to find that one, I turned to ChatGPT and asked it to define the most common myth about the stock market.
As we all know, ChatGPT isn’t perfect, so you should check any information it provides against the advice of your real-life financial advisor or other experts.
According to ChatGPT, the most common stock market myth is that “the stock market is just like gambling.”
This didn’t come as a surprise. When I entered that particular phrase into Google, I got a seemingly infinite amount of material, from YouTube hits to Reddit communities to actual studies conducted by the National Institute of Health.
The top result I found was an Investopedia article titled, “Is Warren Buffett Right That the Stock Market is Like a Casino? What Investors Need to Know.” Well, dang, does Warren Buffett really believe that?
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Using the Oracle of Omaha as my throughline, I decided to do further investigation. According to the article itself, Buffett has semi-regularly made this lament in letters to investors, calling it a result of certain modern tradition trends.
“The legendary investor claims patience and research are a thing of the past,” said writer Daniel Liberto. “Now, he says, the modern investor mindlessly jumps into stocks that are popular and hopes for a quick payoff as if they were at a casino.”
Buffett is particularly concerned with the ways that mobile gaming apps can create a “casino in your pocket” or a heightened temptation to play away that allows Wall Street to profit from users’ trading fees.
So how does this align with why ChatGPT thinks that the story holds resonance with people. It says that people can believe it because “stocks can be volatile and unpredictable in the short term,” while also offering that “some traders treat it like a casino, making reckless, speculative bets (e.g., meme stocks, options without understanding them).” And the way that media dramatizes big wins and losses doesn’t help.
