{"id":287518,"date":"2021-06-30T15:29:01","date_gmt":"2021-06-30T12:29:01","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/charlie-munger-calls-robinhood-a-gambling-parlor\/"},"modified":"2021-06-30T15:29:01","modified_gmt":"2021-06-30T12:29:01","slug":"charlie-munger-calls-robinhood-a-gambling-parlor","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/charlie-munger-calls-robinhood-a-gambling-parlor\/","title":{"rendered":"#Charlie Munger calls Robinhood a \u2018gambling parlor’"},"content":{"rendered":"

“#Charlie Munger calls Robinhood a \u2018gambling parlor’<\/strong>”<\/p>\n

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Charlie Munger, vice chairman of\u00a0Berkshire Hathaway\u00a0and\u00a0Warren Buffett\u2019s longtime business partner,\u00a0slammed commission-free trading app<\/a> Robinhood as being \u201cbeneath contempt\u201d in a new interview.<\/p>\n

\u201cIt\u2019s a gambling parlor masquerading as a respectable business,\u201d the 97-year-old investor told CNBC<\/a> late Tuesday. \u201cAnd it\u2019s telling people they aren\u2019t paying commissions when the commissions are simply disguised in the trading.\u201d<\/p>\n

\u201cIt\u2019s basically a sleazy, disreputable operation. And the interesting thing about it is that some good people you would be glad to have marry into your family have backed it,\u201d he added.<\/p>\n

Critics of Robinhood have accused the company of gamifying investing. But the app has also made trading more accessible to younger people and those with less cash on hand by eliminating commission fees.<\/p>\n

Instead, it and other online brokerage firms\u00a0rely on a practice called payment for order flow\u00a0as a profit engine. The practice, while common, has often been criticized for its lack of transparency.<\/p>\n

Market makers, such as Citadel Securities, pay Robinhood and other online brokers for the right to execute customer trades. The broker is then paid a small fee for the shares that are routed, which can add up to millions when customers trade actively.<\/p>\n

\"Warren
Warren Buffet also took aim at the app during the segment.<\/figcaption>
CNBC<\/span><\/figcaption><\/figure>\n

Buffett added in the interview published Tuesday that Robinhood is not encouraging its users to hold investments over long periods of time.<\/p>\n

\u201cIt\u2019s not encouraging people to buy a very, very, very low-cost index fund and hold it for 50 years. I will guarantee you that you will not walk in there, get that advice,\u201d Buffett said.<\/p>\n

It\u2019s not the first time Buffett\u2019s taken aim at Robinhood.<\/p>\n

He said last month at Berkshire Hathaway\u2019s annual meeting that the app\u2019s \u201cbecome a very significant part of the casino aspect, the casino group, that has joined into the stock market in the last year or year and a half.\u201d<\/p>\n

He added that there\u2019s \u201cnothing illegal to it, there\u2019s nothing immoral, but I don\u2019t think you build a society around people doing it.\u201d\u00a0<\/p>\n

\"Robinhood\"
Robinhood and other online brokerage firms rely on a practice called payment for order flow as a profit engine.<\/figcaption>
SOPA Images\/LightRocket via Getty Images<\/span><\/figcaption><\/figure>\n

When reached for comment, Robinhood directed The Post to a May blog post<\/a> responding to Buffett and Munger\u2019s comments made last month.<\/p>\n

\u201cIf the last year has taught us anything, it is that people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing,\u201d Jacqueline Ortiz Ramsay, a spokeswoman at Robinhood, wrote. \u201cAnd at Robinhood, we\u2019re not going to sit back while they disparage everyday people for taking control of their financial lives.\u201d<\/p>\n

Robinhood, which is eyeing an IPO later this year, landed in regulators\u2019 crosshairs earlier this year when the app helped fuel a Game<\/a>Stop stock frenzy that saw the stock run up nearly 400% at one point.<\/p>\n

At a\u00a0Congressional hearing in February, lawmakers pressed Robinhood CEO Vlad Tenev on the company\u2019s relationship with market makers and its use of payment for order flow. A handful of lawmakers also alleged that Robinhood gamifies the stock market.<\/p>\n

In a December lawsuit, Massachusetts Secretary of State Bill Galvin said Robinhood\u00a0used aggressive tactics to attract inexperienced investors. He accused the app of using strategies that treated trading like a game to lure young, inexperienced customers, including having\u00a0confetti rain down for each trade made on its app, a practice the app ditched in March.\n <\/p><\/div>\n

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Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

“#Charlie Munger calls Robinhood a \u2018gambling parlor’” Charlie Munger, vice chairman of\u00a0Berkshire Hathaway\u00a0and\u00a0Warren Buffett\u2019s longtime business partner,\u00a0slammed commission-free trading app Robinhood as being \u201cbeneath contempt\u201d in a new interview. \u201cIt\u2019s a gambling parlor masquerading as a respectable business,\u201d the 97-year-old investor told CNBC late Tuesday. \u201cAnd it\u2019s telling people they aren\u2019t paying commissions when the…<\/p>\n","protected":false},"author":1,"featured_media":287519,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/06\/robinhood-1.jpg?quality=90&strip=all&w=1200","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[86706,110714,95135,70760],"class_list":["post-287518","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-robinhood","tag-6-30-21","tag-charlie-munger","tag-warren-buffett"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/287518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=287518"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/287518\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/287519"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=287518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=287518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=287518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}