He compared some aggressive investors to "racetrack bettors" who were "buying stocks on a frenzy" when he was addressing at an annual meeting for Los Angeles-based newspaper publisher Daily Journal Corporation, of which he is chairman. He adds that he thinks the current state of the markets is similar to the dot-com boom and that "it must end badly, but I don't know when."

The S&P 500's price-to-earnings ratio is about 40 currently, and the last two times it was higher than that was during the financial crisis and the dot-com bubble. Munger's concerns are not unwarranted. Recently, many investments have inflated valuations, raising the possibility that a correction or significant crash is coming. But it doesn't guarantee it will occur today, tomorrow, next week, or even in a month or two.

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