(Markets Insider) Billionaire investor Howard Marks warned that reckless day trading could lead to disaster in a CNBC interview on Tuesday.
Some people "think it's a gambling game, and they think of it like betting on football," the Oaktree Capital boss said.
"That's not a great thing."
Marks pointed to the "leader of the punters" - Barstool Sports founder Dave Portnoy -and his claim that stocks only rise.
"If there's been buying and if stocks are being held by people who believe that they only go up, I think that bodes ill," Marks said on CNBC.
While the investor acknowledged those types of traders are in the minority, he argued it's "not healthy to have people who are buying stocks for fun."
"It reminds me of the people who were day trading in 1999 and declaring day trading a 'can't miss' strategy," Marks said. "The tech stocks crapped out in 2000."
Portnoy poked fun at Marks' comments in a tweet on Tuesday, accusing him of resenting day traders' success compared to veteran investors such as Warren Buffett.
"Another poor sad billionaire is mad that people are making a ton of money besides him and Warren," he said. "Poor old Howard."
Marks' comments echo those of "Shark Tank" star Mark Cuban, Omega Advisors boss Leon Cooperman, Wealthfront's investment chief Burton Malkiel, and "Mad Money" host Jim Cramer, who have all warned day traders against getting carried away.
Trading platforms' shift towards zero commissions, coupled with the closure of casinos and the suspension of live sports during the coronavirus pandemic, have driven people to the stock market for entertainment.
However, some of the new crop of day traders have bought shares in bankrupt companies and made other risky bets, raising eyebrows in the investment community.