Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Warren Buffett says Robinhood cares about investors’ gambling instincts

Warren Buffett says Robinhood cares about investors’ gambling instincts

Warren Buffett

Gerard Miller CNBC

Legendary investor Warren Buffett believes that the millennial-friendly stock trading app Robinhood contributes to and takes advantage of speculative, casino-like trading in the stock market.

Robinhood “has become a very important part of the casino aspect, the casino group that has joined the stock market in the last year or a year and a half,”

; Buffett said at Berkshire Hathaway’s annual meeting on Saturday.

The Omaha Oracle also said it looks forward to reading the submission of the Robinhood SEC S-1 pre-public offering as the company nears its public debut, which is expected in the first half of 2021. a pioneer in zero commission trading, is seen as the main gateway for young investors to access markets.

“American corporations have proven to be a great place for people to invest their money and save, but they also make great gambling chips,” Buffett said. “If you take care of these gambling chips when people first have money in their pocket and tell them they can make 30 or 40 or 50 deals a day and you don’t charge them any commission, you sell your orders or whatever. is … I hope we don’t have more of him. “

Robinhood – whose mission is to “democratize investment” – has often been criticized for its gaming investment. The launch in Silicon Valley came in the middle of a storm in January amid a brief contraction in GameStop, which was partially fueled by retail investors managed by Reddit. The app has taken steps to dissolve that reputation by eliminating the confetti animation when investors make their first deal.

Buffett said he was unhappy to learn that short-term stock activity in Apple’s stock was rising. He said he expects much of this activity to come through Robinhood.

Robinhood consumer growth was explosive in 2020 and 2021. Millions of new investors jumped into the market during the pandemic, and millions more joined in 2021. The Robinhood stock trading app added nearly 6 million customers in the first two months of the year , according to estimates by JMP Securities.

“There’s nothing illegal about it, there’s nothing immoral, but I don’t think you would build a society around the people who do it,” Buffett said.

“The degree to which a very wealthy society can reward people who now know how to take advantage of the gambling instincts of not only the American but also the world audience is not the most admirable part of the achievement,” Buffett said.

Berkshire Hathaway Vice President Charlie Manger was less gentle with his description of Robinhood.

“I think it’s just that God is horrified that something like this has brought investment from civilized men and respectable citizens,” Munger said. “This is deeply wrong. We do not want to make our money by selling things that are bad for people,” Buffett’s right-hand man added.

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