Warren Buffett on why bubbles happen: People see neighbors 'dumber than they are' getting ri
Warren Buffett was asked by CNBC's Andrew Ross Sorkin if he is worried another financial crisis will happen again.
“Well there will be one sometime," he said in an interview for CNBC’s "Crisis on Wall Street: The Week That Shook the World" documentary. "People start being interested in something because it’s going up, not because they understand it or anything else."
The Oracle of Omaha says the human behavior and jealously that lead to crises will forever be a part of the financial system.
Warren Buffett warns that another financial crisis is inevitable.
Buffett was asked by CNBC's Andrew Ross Sorkin if he is worried another crisis will happen again.
"Well there will be one sometime," Buffett said in an interview for CNBC's "Crisis on Wall Street:
This week marks the 10th anniversary of Lehman Brothers' bankruptcy, which many investors regard as the seminal event of the financial crisis.
The Oracle of Omaha explained another bubble is unavoidable due to human nature, jealously and greed.
"People start being interested in something because it's going up, not because they understand it or anything else. But the guy next door, who they know is dumber than they are, is getting rich and they aren't," he said. "And their spouse is saying can't you figure it out, too? It is so contagious. So that's a permanent part of the system."
In the weeks after Lehman Brothers' collapse on Sept. 15, 2008, Buffett's Berkshire Hathaway took advantage of the financial meltdown by making big investments in Goldman Sachs and General Electric.