Mark Cuban: Not nervous about stock slide
Billionaire entrepreneur Mark Cuban says he is not worried about Monday’s market selloff, but cautions that there’s uncertainty in what stocks will do next.
“When you have a run-up like we’ve had since the election, markets don’t go on a straight line forever and so if something had to happen it was just a question of what, when and how much,” Cuban told Neil Cavuto during an interview on Fox News’ “Your World with Neil Cavuto.”
The Dow Jones industrial average plunged nearly 1,600 points—the worst point decline in history—amid inflation fears, closing at 24,345 on Monday, which followed Friday’s 666-point plummet. The S&P 500 fell 113 points to 2,648. The Nasdaq fell 273 points to 6,967.
Cuban said people can get overconfident when the market goes up, causing a sharp drop in stocks.
“When they get overconfident, then they start buying on margins and that works until it doesn’t,” he said.
Dow industrials and the S&P 500 wiped out all gains of 2018, forcing investors to sell which resulted in the market pullback, according to Cuban.
“If all of a sudden you get an alert on your phone or you get a call from your broker and your stocks are down significantly and you bought on margin, you’re pretty much forced to sell and I think that that contributed a lot to today’s decline,” he said.
Cuban warned individual investors not to put themselves in a position where they are borrowing to buy.
”Be in a position where you're -- you have solid financial footing. If you can nibble here, don't spend all your money here. If you have cash, play it down,” he said.