Day trader's Buffett boast is danger signal for some market vets

An influential day trader's proclamation that he's better than Buffett at stock investing right now has some market vets thinking the market has become overly speculative during the dramatic rally from its late-March lows, making it vulnerable to another sell-off.

Dave Portnoy is the founder of Barstool Sports, a sports and pop culture blog. 

In March, he picked up day trading to help fill the gap left by the absence of sports, and betting on sports, as the nation went into quarantine.

Since then he's been live streaming as "Davey Day Trader Global" to 1.5 million Twitter followers about his successes during the run-up.

Now, in the words of a Bloomberg profile headline, Portnoy is "Leading an Army of Day Traders," many of them thought to be millennials buying on no-commission web sites like Robinhood.

His mantra for those followers: "Stocks Only Go Up."

On Monday, after reeling off the recent price gains for some airline and cruise stocks he had profited from, he asked, "What do you do if you listen to old man Buffett? 'Get out of the airlines.' Idiot. What an idiot."

"Unbelievable. All I do is make money... Literally the easiest game I've ever been a part of... I'm just printing money."

On Tuesday, while acknowledging Buffett has had an incredible investing career, "a hall of famer," Portnoy said, "There's nobody who can argue that Buffett's better at the stock market than I am, right now."

"Listen, he's an old man. His time passed him by. I'm sure he's nice. But how can you debate facts?"

In the comments to his posts, there is a very active debate between Portnoy's fans who see him as part of a new generation of superstar investors and Buffett defenders, who note his long-term success.

Even though MarketWatch columnist Howard Gold wrote last month that "the curtain is coming down on the Buffett era," this week he questions Portnoy's declaration of victory as sounding like "he’s auditioning to host a revival of 'The Apprentice.'"

"The day trading is definitely a sign of the times... You can 'OK boomer' me all you want, but I’ve seen this movie many times and it never has a happy ending."

On "Power Lunch" today, former CNBC anchor and current contributor Ron Insana made a similar point, saying he thinks the market has "gotten wildly too frothy."

"When somebody tells Warren Buffett that's he's washed up, after having earned $85 billion over the course of his career, we've gotten to the point where, you know, we're in silly season, and that got me very nervous about the state of the market." 

It is, as Portnoy says, a fact that since he started playing the investing game, he's outperformed Buffett.

It's also a fact that if you're playing a long-term game, (and that's not necessarily what Portnoy is doing), the score won't be tallied up until, well, the long term.

Speaking of long periods of time

On "Squawk Box" this morning, Becky Quick shared a very old, and rarely seen, clip of Warren Buffett commenting on a "flash crash" for stocks in May, 1962, when he was 32 years old.

In it, Buffett warns against seeing Wall Street as an infallible barometer of what's coming next.

"The stock market has been a good forecaster from time to time in the past. It's also been a rather poor forecaster occasionally. 

"For example, the four or five years, the stock market has been booming along, presumably forecasting better business, which has really not materialized."

Here's Becky with the context and the clip.

BUFFETT AROUND THE INTERNET

Some links may require a subscription

BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP STOCK HOLDINGS 

Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of March 31, 2020, as disclosed in the company's May 15 13F SEC filing, except for Bank of New York Mellon, which is as of April 8, 2020 and U.S. Bancorp, which is as of May 12, 2020.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

-- Alex Crippen, Editor, Warren Buffett Watch