Gerard Miller | CNBC
Legendary investor Warren Buffett believes that the millennial stock trading app Robinhood has contributed to a casino-like trading activity on the stock market and benefited from it.
Robinhood has “become a very important part of casinos, the casino group that entered the stock market in the last year or a year and a half,”; Buffett said at the Berkshire Hathaway annual meeting on Saturday.
“Oracle of Omaha” also said he was looking forward to reading the SEC S-1 submission ahead of Robinhood’s initial public offering as the company was nearing its public launch, expected in the first half of 2021. A pioneer in commission-free trading It is seen as the primary gateway for young investors to gain access to the market.
“American companies have become a great place for people to throw money and save. But they also make great gambling chips, ”Buffett said. “If you focus on those gambling chips when people have their pockets for the first time and you tell them they can trade 30 or 40 or 50 times a day and you won’t charge a commission.” Anything but a sale, an order process, anyway … I hope we can never have more. “
Robinhood, whose mission is to “Democratic investing” – often criticized for the complexity of investing. The Silicon Valley startup found itself in the midst of a fire storm in January amid a brief squeeze on GameStop, some boosted by Reddit-driven retail investors, the app has taken steps to loosen its reputation. This eliminates the confetti animation when the investor makes the first trade.
Buffett said he was not happy to learn that short-term pick-up activity in Apple’s stock was on the rise. He said he expected the event to come to Robin Hood.
Robinhood’s user growth is rapidly increasing in 2020 and 2021.Millions of new investors entered the market during the outbreak, and millions more participated in 2021, the stock trading app Robinhood added. Nearly 6 million customers in the first two months of the year. According to the estimates of the Securities and Exchange Commission JMP
“There is nothing illegal about it, there is nothing immoral. But I don’t think you can build a society out of 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 not only American gambling instincts, but also to the extent that a society is so wealthy can reward people who now know how to take advantage of not only American gambling instinct. But only common people around the world But it’s not the most admirable part of this success, ”Buffett said.
Charlie Munger, Berkshire Hathaway’s vice chairman, was less gentle with his descriptions of Robinhood.
“I think it’s just a goddamn god to have something like that, take investment from civilized people and good citizens,” Munker said. “It’s hugely wrong. We don’t want our money to sell things that aren’t. It’s good for people, ”adds Buffett’s right hand.
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