You’re scrolling through Instagram when a reel pops up. “Top stock to buy now. Target Rs 500. Stop loss Rs 420.”
On your screen, there’s a confident voice, a few charts, maybe even screenshots of profits. It feels convincing, especially for a 30-second video.
You watch it, maybe save it. For many, that’s enough to take the next step and invest.
This is no longer unusual. A growing number of young investors are discovering the stock market through Instagram reels, Telegram channels, Reddit threads and WhatsApp forwards promising quick gains.
The line between advice and influence is blurring. The cost of getting it wrong can be high. Most realise that only after the trade goes south.
By then, .
And this is where the concern is growing. In parts of the market, investing is starting to look less like analysis and more like a bet.
All of this is well known. So why revisit it now? Because Warren Buffett, widely regarded as one of the greatest investors of all time, has flagged a deeper shift and concern.
He says he no longer fully understands how parts of today’s market behave, suggesting that a lot of the activity is starting to resemble gambling rather than investing, driven more by speculation than fundamentals.
“I understand fewer businesses as a percentage of the whole than I did 10 years ago,” he said.
“The market always feels like a church with a casino attached. The casino has gotten very attractive to people.”
Buffett pointed to , one of the clearest examples of sentiment overpowering fundamentals.
Shares of the struggling video game retailer surged dramatically within weeks. The rally was not driven by earnings or business performance, but by retail investors coordinating on online forums like Reddit.
Prices shot up several hundred percent in days, forcing large institutional investors who had bet against the stock to exit at heavy losses.
For a brief period, price stopped reflecting the business and started reflecting the crowd.
The surge did not last. As the excitement faded, the stock crashed, leaving many late investors with losses.
Five years on, the ecosystem that enabled that frenzy has only expanded. Social media is bigger, faster and more influential.
India has not seen a GameStop-scale event, but similar patterns are visible. The , with small companies seeing subscriptions running into hundreds of times, largely driven by retail investors chasing quick listing gains.
There have also been repeated spikes in microcap and penny stocks fuelled by WhatsApp tips and Telegram channels, followed by equally sharp corrections.
“Honestly? Partially, yes,” said Akshat Garg, Head of Research and Product at Choice Wealth, a financial services firm.
But he is careful not to overstate it. “The entire market hasn’t become a casino. But a speculative layer has grown large enough to influence everything beneath it,” he added.
That means long-term investors are still around, but they are now operating in an environment where a significant chunk of participants is chasing momentum and quick gains.
“When someone buys a stock not because they believe in the business, but because they think someone else will buy it at a higher price, that is speculation. At its extreme, that is gambling,” Garg explains.
The bigger shift is in how prices move. On many days, price action is shaped less by company performance and more by sentiment.
News, global cues, social media chatter and fund flows are playing a larger role than before.
“What’s changed is that the market’s short-term ‘voting machine’ is now connected to social media. The votes are coming in faster and louder than ever,” Garg says.
Fundamentals still matter, but they show up over longer periods. In the short term, sentiment often wins.
There is also a structural shift at play. The rise of passive investing means money flows into stocks automatically through index funds, without any judgement on valuation.
Prices move because money is coming in, not necessarily because businesses are improving.
Earlier, stock prices were shaped by information such as earnings, growth and risk.
Now, in some pockets, attention itself is driving prices.
“When a stock moves because a reel goes viral or a thread trends, the price is no longer aggregating information. It is aggregating attention,” Garg says.
That shift is visible globally in meme stock rallies and in India through SME IPO frenzy, microcap spikes and WhatsApp-driven tips.
The pattern is familiar. Prices rise on narratives. When the narrative fades, the fall can be just as sharp.
Market regulator Securities and Exchange Board of India (SEBI) has issued multiple warnings to investors about .
It has also flagged risks in derivatives trading, particularly in the futures and options segment. Sebi data shows that over 90% of retail traders in F&O end up in losses, even as participation continues to rise.
Despite repeated warnings, interest remains high, driven by easy access, leverage and the promise of quick profits. IndiaToday.in had reported earlier on .
This is where things get riskier. For many new investors, the shift is not just from investing to trading, but from trading to leveraged bets.
With relatively small capital, traders can take large positions in options, amplifying both gains and losses. Garg said derivatives are increasingly being used not as hedging tools, but as speculative bets.
Options, in particular, are increasingly treated like lottery tickets. The attraction is obvious. Small capital, big potential returns. But the probability of loss is far higher.
This is where many young investors get trapped, chasing losses or doubling down after early wins.
What makes this phase different is speed. Information spreads instantly. Trends go viral overnight. Algorithms amplify moves within seconds. Access to trading tools has also become easier than ever.
“Both the rise and the fall happen much quicker now,” says Gurmeet Singh Chawla, Managing Director at Master Portfolio Services.
That leaves little room for reflection. Decisions are often made in the moment, influenced by what is trending rather than what is fundamentally sound.
There is also a clear generational shift.
Young investors are increasingly turning to social media for financial advice instead of traditional advisors. Influencers, reels and online communities are shaping decisions in real time.
“Decisions are now often driven by trends and short-term excitement rather than research,” Chawla told IndiaToday.in. “That makes price movements sharper and sometimes disconnected from the actual business.”
The comparison with past bubbles is hard to ignore. The difference today is speed.
Despite all the noise, one thing hasn’t changed. Over time, fundamentals still win.
“Companies that perform deliver returns over time. Companies that don’t perform eventually lose value,” Chawla said.
This is where many investors get caught.
In a rising market, even weak ideas can make money for a while. That builds confidence, often misplaced. When the cycle turns, those trades unwind just as quickly.
Just to sum up, the intention of this article is not to discourage new investors, but to increase awareness on how to go about it correctly.
Buffett’s warning is not about fear. It is about clarity. If you are investing based on a clear understanding of a business, its earnings, risks and long-term prospects, short-term noise should not matter.
But if your decisions are coming from reels, tips or trends, the risks are very different.
Garg suggested a simple check. Ask yourself why you own a stock. If the answer is momentum or hype, you are exposed to the most volatile part of the market.
He also cautioned against confusing a rising market with being right. In a sentiment-driven phase, even poor decisions can make money temporarily. That illusion does not last.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)