(Reuters) – Warren Buffett on Saturday likened millions of inexperienced traders to the stock market in the past year with gamblers and said commission-free brokers such as Robinhood Financial to Promote a casino-like atmosphere
Speaking at Berkshire Hathaway Inc̵7;s annual meeting, Buffett said Robinhood has attracted a large number of people gambling on short-term price movements, such as Apple Inc.
“Nothing is illegal, nothing is immoral. But I don’t think you can build a society out of people who do it, ”he said.
Buffett’s long-standing business partner Charlie Munger is increasingly harsh.
“It’s horrible that something like that will attract investment from civilized people and good citizens,” he said. We don’t want to make money by selling things that are bad for people. ”
Buffett said that while the day-to-day profitability of trading stocks and derivatives is better than playing the state lottery, many new investors will have better results in Buying and holding good company stocks
“The impulse for gambling is very strong in people around the world, and sometimes it gets a tremendous boost,” Buffett says. “It has been building its own reality for a while and nobody tells you. When the clock strikes 12 and everything turns into pumpkins and mice, ”he said.
Some critics say the free trading platform can encourage millennials to view trading as a game or entertainment.
Brokers such as Robinhood Financial have drawn controversy this year as traders pushed for a massive rally in shares of GameStop Corp, video game retailer AMC Entertainment Holdings Inc and other companies, although there was no underlying reason for the madness. Whatever
Some of the purchases are made through chat in the forums, for example: Reddit’s WallStreetBets to punish hedge funds betting on so-called meme stocks
Robinhood faces numerous lawsuits over a January decision to suspend trading on GameStop and other stocks, and Massachusetts is seeking to revoke its brokerage license.
Reporting by John McCrank and Jonathan Stempel in New York; Edited by Cynthia Osterman.