Power Players

Kevin O'Leary: 'Day trading isn't investing. It's gambling' – invest like Warren Buffett instead

"Shark Tank" star Kevin O'Leary.
Scott Mlyn | CNBC

Throughout the pandemic, day trading has become extremely popular, especially among young people who, in most cases, have never invested in the stock market before.

Coronavirus-induced lockdowns provided some with more time on their hands to try trading apps, like Robinhood, which are seeing a surge in businessmillions of Americans are unemployed and may think it is a way to make up for lost income; and a lack of sports-betting or access to casinos have driven gamblers to explore the day trading trend, to name a few reasons.

But many experts warn that day trading can end badly – investors, including O'Shares ETFs Chairman Kevin O'Leary, have compared day trading to gambling.

"Day trading is not investing. Day trading is gambling. Nothing wrong with it. Nothing wrong with Las Vegas either. But it's not investing," O'Leary tells CNBC Make It.

And Barbara Roper, director of investor protection at the Consumer Federation of America, recently told CNBC about day trading that "losses are particularly likely in an economy that is as rife with unprecedented and unpredictable risks of the kind we face in a global pandemic that has decimated certain industries."

The difference between day trading and investing, according to O'Leary, is that investing is "putting money into the market with a long view," as in, "your entire life."

O'Leary pointed to Berkshire Hathaway chairman Warren Buffett's legendary buy-and-hold investment strategy. "He's a value investor," O'Leary said. "He's one of the most successful in history."

"Money is made in investments by investing and by owning good companies for long periods of time," Buffett told CNBC in March 2016. "If they buy good companies, buy them over time, they're going to do fine 10, 20, 30 years from now."

And "that's how you do it," O'Leary said. "Whether you like Warren Buffett or you don't, he understands that in the long-run, it's about the cash flow and about investing... taking positions and holding onto them for long periods of time."

Indeed, long-term investing, including investing in passive funds that track the S&P 500 or in a mutual fund, shows historically better results than stock picking, research shows.

"Markets have a casino characteristic that has a lot of appeal," Buffett said during the 2017 Berkshire Hathaway shareholders meeting. "People like action and they like to gamble. If they think there's easy money to be made, you get a rush. For a while, it will be self-fulfilling and create new converts, until the day of reckoning comes."

All in all, "I have no problem with day trading," O'Leary said, "but to me, you can go to Las Vegas or you can day trade. Same thing. That's not investing. That's gambling."

Are you stuck in a financial feud? Fighting over money with a business partner, a vendor or even a family member? Kevin O'Leary wants to help you resolve your dispute. Click here to find out how.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

Check out: Amex Blue Cash Preferred is offering an elevated welcome bonus for a limited time

Don't miss:

Here's Kevin O'Leary's top side hustle pick right now
Here's Kevin O'Leary's top side hustle pick right now