Jim Cramer says Warren Buffett is wrong about investors being addicted to ‘gambling’ — they’re addicted to the S&P 500
.May 6, 2026
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Warren Buffett sat in the audience at Berkshire Hathaway’s annual meeting in Omaha last Saturday — for the first time in six decades — and still managed to frame the argument everyone else is now fighting about.
Buffett, who announced his retirement as CEO of Berkshire Hathaway last year, told CNBC’s Becky Quick that markets have never felt this speculative. “We’ve never had people in a more gambling mood than now,” he said (1).
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Jim Cramer, CNBC’s Mad Money host, doesn’t agree with him.
Cramer pushed back on X and argued that Buffett is pointing at the wrong behavior. “We are addicted to S&P 500 buying no matter what,” Cramer wrote. “We have been taught to love ETFs no matter what kind. If individual stock investing hadn’t been so denigrated it would be less of a casino (2).”
Buffett makes his case
Buffett spoke with Quick during the lunch break, comparing today’s markets to “a church with a casino attached” and said the casino side has grown very crowded (3). According to him, while more people remain in the church than the casino, the casino has gotten very attractive.
He called out one day options (also known as zero‑days‑to‑expiration or 0-DTE), as an example of the problem. 0-DTE (4) are short‑term contracts bought and settled within a single trading session, which means someone can place a bet on a stock’s direction in the morning and collect or lose by market close.
Buffett explained that these aren’t really about owning a business or even making a thoughtful, longer‑term bet; they’re more like placing quick wagers on tiny price moves over just a few hours. “That’s not investing. It’s not speculation. It’s gambling, just totally,” he told Quick (5).
He also made an example of the U.S. Army soldier Master Sgt. Gannon Ken Van Dyke, who is accused of making $400,000 on a prediction market by betting on a military raid to capture Venezuelan President Nicolás Maduro that he knew about beforehand. He was charged by the Department of Justice (6) in April and has pleaded not guilty.
Buffet’s point is that this shows what’s wrong with where market behavior has drifted. “And the quantity of those things is just incredible,” Buffett said. “So we’ve never had people in a more gambling mood than now.”
Berkshire has responded to the current environment by accumulating cash rather than deploying it into stocks it considers overpriced. The company ended Q1 2026 with $397.4 billion in cash and Treasury bills (7). Buffet believes the time to act is when markets are in panic, not when they’re elevated and speculative. “Well, the most likely time to buy things is when nobody else will answer their phones,” he said.
He also said of the 60 years he’s been in business, only about five were “really juicy” with buying opportunities, and this isn’t one of them.
Cramer’s response on X isn’t that markets are fine. It’s that the real gambling is happening inside the index funds (the products most Americans treat as the safe and responsible choice).
He argues that passive investing has become automatic. People pour money into S&P 500 ETFs month after month, regardless of whether the underlying prices make sense and regardless of what individual companies are worth. He argues that it’s a habit that could have consequences.
For example, the Vanguard S&P 500 ETF (VOO) (8) alone drew in $143 billion in 2025, which was about 10% of all new money that went into U.S. ETFs that year. Instead of picking individual stocks, investors just throw money into these ETFs without knowing what they’re investing in.
The overall ETF industry pulled in $1.46 trillion, the highest annual total ever recorded. Investment Company Institute (ICI) data also found that long-term index funds took in more than $109 billion in February 2026 alone, three times more than $34.68 billion of active funds that same month (9). And a lot of that cash is chasing the same handful of big index funds, which means they just keep buying the same big stocks over and over.
The top 10 holdings in the S&P 500 now represent more than 41% of the entire index, according to S&P Dow Jones research (10). So when someone buys a standard S&P 500 fund thinking they’re getting broad diversification, they’re really just making a heavily weighted bet on a handful of big tech companies — whether they realize it or not.
Cramer’s broader point is that denigrating individual stock picking pushed investors into indexes, which concentrated money in a handful of mega‑caps, so the index started acting more like a bet on those few giants than on the whole market.
What this means for your money
Buffett and Cramer are diagnosing different patients. Buffett’s concern on zero-day options, prediction markets and meme-stock squeezes is real, but it mostly applies to a specific kind of investor who is actively seeking out short-term trades and wins. The average person contributing to a 401(k) isn’t trading 0-DTE contracts.
Cramer’s concern on the other hand, is that if you hold a standard S&P 500 index fund, you already have a portfolio where technology stocks make up roughly 30% of your equity exposure — a concentration that Artisan Partners’ research (11) compared to conditions last seen during the dot-com bubble. Buying the same ETF every month without ever examining what you own or what you’re paying per dollar of earnings isn’t exactly the low-risk move the label implies.
That doesn’t mean you should ditch index funds. Buffett has spent years saying the S&P 500 is the right vehicle for most individual investors, and that advice hasn’t changed. The question Cramer is raising is whether years of being told to “just buy the index” has created a different kind of unexamined risk, one hidden inside the most conventional advice in personal finance.
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CNBC (1),(3),(5),(7); X (2); Investopedia (4); U.S. Department of Justice (6); Morningstar (8); Investment Company Institute (9); S&P Global (10); Artisan Partners (11)
