Mark Cuban Once Called The Stock Market A Ponzi Scheme 'By Definition' — 'You're Going To Get Your A** Kicked' Unless You Do Your Research

Mark Cuban isn't shy about his opinions, and when it comes to the stock market, he has never held back. In a 2006 blog post on Blog Maverick, the billionaire investor called the stock market a "Ponzi scheme by definition"—a statement that still raises eyebrows nearly two decades later.

‘The Stock Market Is a Ponzi Scheme'

Cuban wrote, "The stock market is by definition a Ponzi scheme. As long as money keeps on coming in, then there is someone to take the stocks from the sellers."

For the record, a Ponzi scheme is a fraudulent investment scam that pays returns to earlier investors using money from newer investors, rather than legitimate profits. While the stock market isn't actually a Ponzi scheme, Cuban's point was that its success depends on continuous cash inflows—if people stop buying, prices crash.

Don't Miss:

• Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.26/share!
• Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.

He took it a step further, questioning the entire concept of stock ownership. "The concept that you own ‘your share' of the company is a joke," he said, criticizing how companies issue stock and options that dilute retail investors while insiders continue to profit.

So, Is the System Rigged?

Cuban argued that the stock market isn't designed for regular investors to win—at least not unless they dedicate their lives to understanding it. He warned that without a serious knowledge advantage, retail investors will always be at a disadvantage against hedge funds, institutional traders, and market insiders.

Interestingly, Warren Buffett, the most famous investor in the world, has echoed a similar sentiment—though with an entirely different takeaway. "I don't think most people are in a position to pick single stocks," Buffett said during a Berkshire Hathaway's BRK BRK.B)) annual shareholders meeting in 2020. "A few [are], maybe, but on balance, I think people are much better off buying a cross-section of America and just forgetting about it," he said. 

Trending: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $100.

Buffett is a huge advocate for index funds, particularly the S&P 500, and consistently emphasizes that starting young and investing for the long haul is the best strategy for most people. This directly contrasts Cuban's take, where he sees buy-and-hold investing as a marketing gimmick that puts average investors at risk.

So, while both Buffett and Cuban agree that stock-picking isn't for amateurs, they offer very different solutions. Buffett says stick with index funds and let time work in your favor. Cuban suggests that unless you have an unfair advantage, you're better off investing in yourself or your own business.

See Also: Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – with $1,000 you can invest at just $0.26/share!

What's the Alternative?

Cuban has always believed that investing in yourself or your own business is a better bet than relying on the stock market. "If you put your money in safe bets like I mentioned in the last post, then you can spend that time you would otherwise have to spend researching funds and stocks, either with people you love, things you love to do, or in yourself," he wrote.

Does that mean investing in stocks is a bad idea? Not necessarily. If you have the time, expertise, and discipline to trade strategically, you can make money. But Cuban's warning is clear: the stock market isn't as simple as "buy low, sell high." If you don't know what you're doing, someone else is profiting off you.

Read Next:

• These five entrepreneurs are worth $223 billion – they all believe in one platform that offers a 7-9% target yield with monthly dividends
• ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum.