Robinhood Has Lured Young Traders, Sometimes With Devastating Results (nytimes.com) 147
Robinhood users buy and sell the riskiest financial products and do so more frequently than customers at other retail brokerage firms, but their inexperience can lead to staggering losses. From a report: Richard Dobatse, a Navy medic in San Diego, dabbled infrequently in stock trading. But his behavior changed in 2017 when he signed up for Robinhood, a trading app that made buying and selling stocks simple and seemingly free. Mr. Dobatse, now 32, said he had been charmed by Robinhood's one-click trading, easy access to complex investment products, and features like falling confetti and emoji-filled phone notifications that made it feel like a game. After funding his account with $15,000 in credit card advances, he began spending more time on the app. As he repeatedly lost money, Mr. Dobatse took out two $30,000 home equity loans so he could buy and sell more speculative stocks and options, hoping to pay off his debts. His account value shot above $1 million this year -- but almost all of that recently disappeared. This week, his balance was $6,956.
"When he is doing his trading, he won't want to eat," said his wife, Tashika Dobatse, with whom he has three children. "He would have nightmares." Millions of young Americans have begun investing in recent years through Robinhood, which was founded in 2013 with a sales pitch of no trading fees or account minimums. The ease of trading has turned it into a cultural phenomenon and a Silicon Valley darling, with the start-up climbing to an $8.3 billion valuation. It has been one of the tech industry's biggest growth stories in the recent market turmoil. But at least part of Robinhood's success appears to have been built on a Silicon Valley playbook of behavioral nudges and push notifications, which has drawn inexperienced investors into the riskiest trading, according to an analysis of industry data and legal filings, as well as interviews with nine current and former Robinhood employees and more than a dozen customers. And the more that customers engaged in such behavior, the better it was for the company, the data shows. More than at any other retail brokerage firm, Robinhood's users trade the riskiest products and at the fastest pace, according to an analysis of new filings from nine brokerage firms by the research firm Alphacution for The New York Times.
"When he is doing his trading, he won't want to eat," said his wife, Tashika Dobatse, with whom he has three children. "He would have nightmares." Millions of young Americans have begun investing in recent years through Robinhood, which was founded in 2013 with a sales pitch of no trading fees or account minimums. The ease of trading has turned it into a cultural phenomenon and a Silicon Valley darling, with the start-up climbing to an $8.3 billion valuation. It has been one of the tech industry's biggest growth stories in the recent market turmoil. But at least part of Robinhood's success appears to have been built on a Silicon Valley playbook of behavioral nudges and push notifications, which has drawn inexperienced investors into the riskiest trading, according to an analysis of industry data and legal filings, as well as interviews with nine current and former Robinhood employees and more than a dozen customers. And the more that customers engaged in such behavior, the better it was for the company, the data shows. More than at any other retail brokerage firm, Robinhood's users trade the riskiest products and at the fastest pace, according to an analysis of new filings from nine brokerage firms by the research firm Alphacution for The New York Times.
Hi, welcome to gambling (Score:5, Informative)
I find it dubious that anyone trading these high risk things did not at least have some understanding they could lose money.
Many RobinHood could make potential losses clearer, but come on... you can't blame the maker of tools for what people do with them. I'm sure there are countless others than used RobinHood much more responsibly, to good result...
Re:Hi, welcome to gambling (Score:5, Informative)
I find it dubious that anyone trading these high risk things did not at least have some understanding they could lose money.
Many RobinHood could make potential losses clearer, but come on... you can't blame the maker of tools for what people do with them. I'm sure there are countless others than used RobinHood much more responsibly, to good result...
The guy has a gambling addiction. He's betting on financial instruments instead of cards.
Re:Hi, welcome to gambling (Score:5, Interesting)
Given the description of this guy, I bet he hangs out on r/wallstreetbets [reddit.com]. Slogan: "Like 4chan found a Bloomberg Terminal"
1) Deleverage and diversify on the way up.
2) Increase leverage on the way down, but do so at fixed, scheduled-in-advance price points that assume that "down" can be way down indeed; never underestimate how far the market may take a dip; you don't want to be fully leveraged and have it keep going down.
3) Hedge anything that you can't afford to lose. Hedging is cheap when things are going well. It's expensive when they're going poorly. Up your hedges when things are going well.
4) Buy some short-term "lotto tickets" if you want, but never with serious money - stay focused on the long term if you're convinced in the thesis of a given security. In the short-term, a security can move for countless reasons having nothing whatsoever to do with the validity of your thesis - macro events, major investors deciding to dump, "acts of God", etc.
5) Don't wall yourself off into an information bubble, where you're only surrounded by people who agree with you and you don't listen to people who disagree with you. People who disagree with you may be annoying, but they make you continuously have to recheck your thesis.
6) The long-term trend for the market is "up". Short positions are statistical losing bets. It's fine to make them a small part of your portfolio, particularly as hedge, but long positions are playing the odds.
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When you want to win at the horse races be the bookie do not be the mug punter. Want to make money be the Robinhood that robs from the poor and gives to the rich you. Not only do they work to not protect the unknowledgeable, they work to hard to get the suckers in and start gambling hard on stocks as the anti-Robinhood makes on on fees and loan charges. Do no be the mug punter, be the bookie taking bets.
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After pointing out somewhere around thirty times the countless thank-you tweets from hospitals and the statements of the manufacturers of the devices, I'm through with your trolling.
Re:Hi, welcome to gambling (Score:4, Interesting)
It's also important to view your first few years of trading stocks as an expensive learning experience. If you're doing that with money you're saving over time, and not some lump sum like an inheritance, then that's no big deal. You'll learn about all the scams and bad ideas, and reduce your expectations to something reasonable, and it will cost you far less than a college education. Most people learn pretty quickly to stick with index funds.
Managing your own assets through a market crash is great preparation, some would say mandatory, for becoming independently wealthy, which hopefully everyone is by retirement. Social Security is barely subsistence by itself these days, and its purchasing power will continue to fall. One way or another you're on your own for any kind of reasonable retirement, and while 401k and index funds are the best plan at first, even there you can make really expensive mistakes if you haven't at least learned not to sell into a market crash.
Learning to manage at least a little of your own money, even if it's just the same index funds as your 401k, is really important. It should be seen as as basic as learning to change a tire, or do minor repairs around the house.
That would be investing, as opposed to trading (Score:4, Insightful)
> It's also important to view your first few years of trading stocks as an expensive learning experience. If you're doing that with money you're saving over time ...
> Most people learn pretty quickly to stick with index funds.
I think there is an important distinction to make here.
If you're investing in index funds (all of the major companies combined) over time, that's investing. When General Mills makes money, you make money. When Internationally Paper makes money, you make money. You'll make money as long as people keep eating and using toilet paper. Some months will be better than others, but in any given decade you're going to make money, and your earnings after inflation are even pretty predictable.
Investing x% of each paycheck into index funds or similar is how over 80% of millionaires became millionaires.
Trading stocks is a different thing. As defined by Investopedia:
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Stock traders are people who trade equity securities. Their primary goal is to purchase and sell shares in different companies and try to profit off short-term gains from stock price fluctuations for themselves or for their clients.
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Trading, trying to "profit off short-term gains from stock price fluctuations" can very easily lose money. The company can profit and you still lose because the profit was 2% less than expected. That's NOT how most people get rich.
Even individual stocks can be an investment. (Score:2)
I think there is an important distinction to make here.
If you're investing in index funds (all of the major companies combined) over time, that's investing./em
That is a great point, over time I almost never sell stocks, I've just bought stocks I thought would be a good long term investment for a variety of reasons, then held onto them.
I think you can do that with stocks and don't have to use index funds, though index funds are safer - stock purchases can be as much an investment with careful consideration.
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Very true, and that's the value with index funds-- you don't have to be a professional trader to get their benefit.
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You can split hairs over definitions, but it adds little to the conversation.
Trading stock is important for understanding how to invest in index funds, is the thing. Hopefully, one doesn't lose too much in the process. It's a step along the way to understanding options and insurance pricing, which is a step along the way to actually profiting from a market crash, or at least taking the psychologically necessary steps to avoid selling at the bottom. It's also a step along the way to investing directly in
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> Trading stock is important for understanding how to invest in index funds, is the thing.
Put 15% of your check into three different Vanguard funds until you retire.
That's gonna make you a millionaire in 99.9% of cases.
> It's also a step along the way to investing directly in bonds, which is really not for beginners but quite useful for retirement.
I'm curious why you say that. There may be something you know that I don't. Here I'm very much NOT talking about *trading* bonds in the hope that interest
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I'm curious why you say that. There may be something you know that I don't. Here I'm very much NOT talking about *trading* bonds in the hope that interest rates rise (or fall) in the next few days. I'm talking about every three months you buy a A-rated 24-month bond.
Congrats, you're guaranteed to lose money vs inflation. There's a place for that, of course. Sometimes money needs to be parked safely (of course, shopping around for a good savings account rate online can get you returns only slightly lower, and with liquidity, bit of each has its place). But taking moderate risk for moderate gains also has an important place in a retirement portfolio, and until you deeply understand things like how to value future money, you won't do the math correctly there. Even with
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> The fundamental problem with bonds is that bond funds are almost all of the "speculate on future interest rates" variety, which is fine and all as a hedge against other things.but not appropriate for most people.
Indeed. I'm sure there are some funds that are pretty much just simple bond ladders, with reasonably chosen risk and diversification, but I didn't find any in a quick search. I should probably look again rather than bothering with buying every few months.
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Yet it is not a required course in most any school (along with changing a tire).
Kinda makes you wonder doesn't it?
Investing isn't gambling. (Score:5, Insightful)
But using the kind of user interface gimmicks employed on slot machines does nothing for a sober thoughtful investor. It's designed to make trading on margin appealing to the kind of people who have gambling problems.
That's deeply irresponsible, but I don't know if there's anything anyone can do about it. It's reprehensible, but not illegal.
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This. Investing/trading may be risky (especially if you do it poorly) but it is simply not the same thing as gambling.
When you gamble (at the casino, the race track, on the lottery, etc.) the "house" sets the odds and the payout. And the house always sets the odds so that they will make money in the long run.
When you invest or trade, there is no "house" setting odds and payouts. The market (comprised of you and everyone else trading) determines "fair" value. You can evaluate the risk, decide on entry and ex
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He's not even gambling with his own money. He's taking out credit card and home equity loans to gamble.
That's a really, really stupid move.
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The new thing here is new gamification. But fundamentally what we see is the same thing we see in so many current firms. The o
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you can't blame the maker of tools for what people do with them
You can blame them for psychological tricks to get people who are predispositioned to gambling habits hooked, like constant notifications of profits, exciting onscreen visuals etc.
This is exactly the same kind of thing the video game industry does with microtransactions and loot boxes to hook their "whales" [youtube.com].
And obviously the same thing actual casinos do.
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For anyone wondering how Robinhood makes money (Score:5, Informative)
It's a "House Always Wins" situation.
Re: For anyone wondering how Robinhood makes money (Score:3)
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Then how does RobinHood keep its servers plugged in?
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Sells the data to high frequency traders?
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And high frequency traders pay for this why?
Re: For anyone wondering how Robinhood makes money (Score:5, Informative)
And high frequency traders pay for this why?
This is an old article that has a good description: https://startupsventurecapital... [startupsve...apital.com] a more up to date description on the current business model (more of a hodgepodge) https://www.investopedia.com/a... [investopedia.com] (notice how they where fined in dec -19 by FINRA for best execution violations).
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Hell, I was just guessing. I had no idea they actually did this.
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I can't say for Robin Hood specifically, but there are lots of ways your broker makes a little money from you. Margin / short selling for example: margin interest rates often look like credit card rates for small traders, and the risk to the broker is very low. Also, the stocks you hold can be loaned out to people wanting to sell them short, which is another nice side business (this happens all the time, and is transparent to the account holder).
Mutual funds are a different story, there are systems of kic
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Volume! Just like the bank that only makes change!
In actuality I’ve heated they either buy the share at a fraction per share cheaper or sell at a fraction per share higher and pocket the difference. Charles Schwab does the same thing now. In some cases the brokers may have always been doing that AND charging you a fee on top of that.
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Arthur Dent - "How can he afford to sell below cost price?"
Ford Prefect - "Oh, he sells a LOT of them!"
Re: For anyone wondering how Robinhood makes money (Score:5, Informative)
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So yeah they front-run the trades. Typical wall street sleeze.
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Re: For anyone wondering how Robinhood makes money (Score:4, Interesting)
It's a form of auction leveraging, which is legal. That type of stuff happens in pretty much all auctions even wholesale markets with big movements as well, like livestock, shipping, carriage space, etc. It also happens in pretty much every business in retail. Wholesalers buy from the upstream processors at x rate per-unit to get their cut, they sell downstream to stores/etc at y rate per-unit. It's not illegal because the market is still competitive, even if "gentlemens agreements" exist.
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Re:For anyone wondering how Robinhood makes money (Score:5, Interesting)
They get paid in the form of kick backs for facilitating the trades
Exactly this. They get "rebates" from companies for directing trades in their direction, in much the same way that people posting Amazon links will include their affiliate code in the link so that Amazon gives them a kickback for sending the traffic their way. In that regard, you may want to be wary of any recommendations they give you, since their interests are not aligned with yours and they are most certainly not serving as a fiduciary who has a legal and ethical duty to look out first for your best interests.
their fees are baked into the trades as they're being made. [...] the fees are part of the stock purchase price.
From what I've gathered, there are no fees, hidden or otherwise. The price you pay is the same as it would be anywhere else that has no fees.
It's a "House Always Wins" situation.
Except you aren't playing against the house here, so this isn't a case of the odds being stacked against you, which is what that saying would suggest. This is simply a middleman that's structured their business so that they aways profit, which tends to be how all smart businesses are run. That, by itself, isn't necessarily to your detriment.
The customer always pays in the end (Score:2)
The "House" here is major corporations who get paid either way, even as guys like the fellow in TFA get screwed. The point is Wall Street makes their money no matter what. All the risk is on the little guy.
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From what I've gathered, there are no fees, hidden or otherwise. The price you pay is the same as it would be anywhere else that has no fees.
It is effectively a fee, whether other "no fee" places play the same game or not.
Account holder with cash in account tells RH app he wants to buy at $10.00. RH waits around for takers who will pay a kickback. Some high speed trader sees that the stock is worth $9.88 for the moment, and offers $0.05 to RH for the sale. RH says yes, pockets the five cents and hands over the account holder's ten bucks. No "fee" charged, right?
How this is different from a normal fee is the kickback is hidden and variable, w
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One other thing to look out for is a magnification effect - suppose that Robin Hood was on the up-and-up always, and they always give perfect recommendations, with no kickbacks from anyone, for smart plays on stocks.
Sounds great? Well... problem is, they give exactly the same advice to *everyone* - so there are 10,000 traders/clients taking advantage of the same piece of advice. And THAT is going to skew the stock price all by itself. If you are late to the party, or you leave after everyone else does, y
The profit is in the spread (Score:2, Interesting)
A common reason people have trouble understanding why HF firms like Citadel and KCG pay for this retail flow is that the public is not used to thinking in terms of bid-offer spread.
There is *never* any single price for a US exchange-traded equity. There is a best bid, maybe $14.40, and a best offer, maybe at $14.43.
A high-frequency firm is quite happy to sell at 14.43 or buy for 14.40, over and over again. They make on average 0.015 per share on that.
When a retail customer clicks "buy" they place an order
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their fees are baked into the trades as they're being made. They get paid in the form of kick backs for facilitating the trades and the fees are part of the stock purchase price.
It's a "House Always Wins" situation.
Investopedia article gives more detail (How Robinhood Makes Money): https://www.investopedia.com/a... [investopedia.com]
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We considered getting into stocks at one point. We had a particular very popular stock in mind, one whose principals had very powerful political ties and which had captive customers. Instead we used the money for a new car for my wife. That VW Passat turned out to be a much better investment than Enron would have been. That scared us enough that we've shied away since, mostly investing in property because even if the economy totally crashes you still have a piece of property you can loft a tent on. As
Many of these "Investors" (Score:2)
Would be better off just buying scratch offs with their money.
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Minus the carpel tunnel syndrome.
It's not RobinHood... (Score:5, Insightful)
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Don't forget this part
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Agreed, however, if he had gotten out when he was back up to one million, this story would have been quite different. "...And his wife said "I always knew he was a financial genius!" ." The true moral of the story being: If a shark spits you out, don't swim back to it and ask for a ride. Unless it's Fortnite.
Enabling stupidity. (Score:5, Insightful)
You are spot on, the guy clearly has a gambling addiction. This app didn't somehow infect him with it. He could easily have made similarly bad choices via online gambling or a trip to Nevada.
But, it IS true that this app made it EVEN EASIER for him to fall victim to his addiction, and possibly directly preyed upon it be being designed in a way that exploits people with such addictions.
Our technological advancement continues to make the world more dangerous for people who aren't very bright, or don't have very much self-discipline. The world was always dangerous for such people, but some natural barriers have wound up keeping things workable for most of them (plenty of economic demand for menial labor for them to do, barriers-to-entry for their addictions like gambling being restricted to specific cities, etc.). Labor automation continues to reduce the economic need for low-intellect labor (despite the very high supply), and apps like this one continue to remove natural barriers to entry that had the effect of protecting such people from themselves, at least somewhat.
So, we continue to raise the "intelligence, wisdom, and self-discipline" bar that people must hit in order to thrive in the modern world. This leaves increasing numbers of people lost and confused. And positioned such that crime seems like their best option.
Maybe it's just natural selection. But it sure seems like a dangerous position for us to be in.
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Look on the bright side, at least he didn't invest in Trump University!
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thanks4 insightful post on tech changes/challenges (Score:2)
Some related writings by others on how our behaviors adapted for scarcity times create personal challenges when faced with certain forms of abundance:
https://en.wikipedia.org/wiki/... [wikipedia.org]
"Supernormal Stimuli: How Primal Urges Overran Their Evolutionary Purpose is a book by Deirdre Barrett published by W. W. Norton & Company in 2010. Barrett is a psychologist on the faculty of Harvard Medical School. The book argues that human instincts for food, sex, and territorial protection evolved for life on the savann
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I think the point of TFA (Score:2)
This guy is out the money, and that'll have an impact on his local economy. Do that on a big enough scale and you'll start to see effects.
It's the same as mandatory seat belts. The damage done from people killed and injured from lack of seat belts hurts us all. Dead people don't earn and leave behind families that are a burden, if we ignore those families they can turn to crime and vio
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It's an acceptable risk to take out a $15k loan from a loanshark to place a bet you know will pay off, it's insane to take the loan just to place random bets on whatever matches might be played that
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Note that being different from a "simple single stock equity trade" doesn't necessarily mean more risky. Options can increase leverage, absolutely, but they can also decrease leverage (hedging, for example).
I do a mix of both. I have long-term calls spreads for where I expect more growth on a security than the market does, but I also I maintain a balance between common stock and call spreads, and hedge that stock with protective puts. The overall curve is that if the security stagnates, declines slightly,
Re: It's not RobinHood... (Score:2)
That's one of the areas where I'm taking risks. I have large naked equities. No options, puts, calls, nada.
I don't have the time to watch that closely and get -that- involved in the details and my goals are pretty long term. I rode the covid crash all the way down and have mostly recovered and that's after a very long ride up from before covid.
I don't take losses on options and spend less time on my investments in exchange for higher risk, need of an iron stomach, and an unhealthy dose of faith that I co
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Because of this strategy [slashdot.org] (particularly #2), the COVID-19 dip worked out really well for me.
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What's a little unclear here is if he paid off the credit card debt and the home equity loans when he was up over a million dollars? If he did, then he's up $6,596. If he didn't then he's down about $68,404. It's sort of a different story depending on which one is the case. If he paid off his debts, then this is the story of someone who does stock trading the way many people play video games, but he's actually managed to turn a decent profit doing it. If he didn't pay off his debts, then this does look pret
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While I hope there's a happy ending, that he'd borrow $15,000 via credit card cash advances to fund his adventures leaves me doubting he did as you said.
Adulthood, some never quite make it. (Score:2)
But an adult who chooses to take part in something best accept responsibility for knowing the rules to the game.
Adults whining because they did not do their home work after the fact just makes them look more foolish, more like the children they are.
I have lost money in the market at times. But it is just tutition for your real world education.
Just my 2 cents
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Although this is a story about a man who is living in a country where online gambling is illegal. Not sure who's freedom you're talking about...?
This guy clearly made some colossal mistakes. However, RobinHood has made "investing" a lot more like "gambling" - and gambling (online) is illegal in the USA. Thus, the government has specifically removed his freedom to gamble online, and yet he's managed to lose money doing exactly that.
This man also lives in a country where almost anything you do wrong can be ca
Best idea (Score:2)
Least risky shares are Tesla, Apple, and Adobe. Other stuff is risky.
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Re: Best idea (Score:2, Informative)
Tesla is crazy risky.
I just read the wildest analyst report on them yesterday. (Not that analysts are all knowing but go,with me here).
His target for Tesla is 2300 (1300s at time of report). But his recommendation? Sell.
This is totally whacky. Normally, a target price 80% higher is a super strong buy.
His point is that it may go to 2300+ based on craziness but the moment anything bad happens it'll flash crash down to 300 and the timing of that negative event is completely unpredictable.
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Depends on what the event is. Companies don't always recover from a crash. The myth is shattered, faith is lost. It could be years for a flash crash company (any, not just Tesla) to recover if they even survive.
Quite likely, but personally I think Tesla is still in a pretty strong position to survive most flash crashes. That being said, it's definitely got the "mad genius" thing going with it like Apple and Jobs, so if that flash crash is triggered by Musk dying in an Autopilot accident I would definitely avoid investing :)
Re: Best idea (Score:2)
Yes definitely the reality distortion field is strong with this one. Musk dying or getting terminal cancer or even just a few days in the hospital with covid could be enough to do it. A bad quarter. A new regulation. A mass safety recall. Teslas getting bricked by an update or hackers. Lots of stuff. I watch Tesla carefully for entertainment value only. I'd never buy at any price. I own a model 3 so I hope they don't die as a company but no stock for me.
Re:Best idea (Score:4, Interesting)
Amazon. AWS is a cash cow, they're building data centers as fast as they can pour concrete (literally) and still can't keep up with demand and it will continue that way for several years. They're building out their logistics network at a phenomenal rate and actually saving money while doing it compared to paying for that service. Their robotics unit is building actual useful devices that save huge amounts of money and improve operations. They're getting into power generation (for the DCs) and doing well at it.
The most interesting aspect of Amazon to me is that they have enough cash on hand that "Failure is an option". Several projects have crashed and burned spectacularly (Fire Phone, for example) which in other companies would have meant the end of the careers of everyone involved, instead they get back up, dust themselves off, and having learned a lesson go do something else.
Full disclosure: I work there, but in the physical security field. I'm just speaking of the view from inside the company.
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Correct. TSLA P/E ratio is over 300.
Re:Best idea (Score:4, Insightful)
Tesla is very high risk. if any of the major auto makers get their dick beaters on better battery technology, Tesla is D.O.A.
While this is 100% true, it's a bit like worrying about being overtaken by glaciers. Bound to happen eventually, but probably not on a timescale you care about. It's been almost a decade now since Tesla demonstrated that people will buy a good electric car; that's two whole slow-motion auto industry model replacement cycles, and still there are no serious models by any large player other than the Nissan Leaf.
The big guys could obviously stomp Tesla with mainstream electric cars any time they got around to it, but they're still in "I dunno about this new-fangled electricity stuff, probably just a fad" mode, and there's no reason to think this decade will be any different.
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Tesla is a huge risk, basically every market disruptor is. They are also crazy overvalued. No there's a chance that will bear fruit of course, but that doesn't make them not risky.
There's a term called "Blue Chip" companies. They are the ones you want to invest in to minimise risk. Apple and Adobe can be counted among them as can Amazon, Microsoft and Google.
But Tesla? Their stock price is crazy volatile. This year alone they have gone from $300, to $900, crashed back to $300, come up to $1000, and currentl
At least gambling at a casino... (Score:2)
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Because odd are, you're going to lose (Score:2, Informative)
No matter how you do it, you're playing against the Ponzi Scheme that's the modern stock market. And unless you have a high-power arbitrage program, running on servers co-located with the stock market servers, you *will* lose it all. It may take a week, or it may takes 2 years, but you will.
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This guy was 1. borrowing money to put in the market 2. using options and other derivatives when he doesn't understand how it works 3. a gambling addict, all of which led to him losing his shirt. Most people are putting mo
Several issues here ... (Score:2)
This guy didn't know any of this and got burned.
(1) Small fees on trades shouldn't be an issue, unless you're day trading and trying to "get rich quick" which almost never works out. These fees (can) offset other fees and lower the expense ratio if you hold the fund. They also force you to think before you trade.
(1a) There are *always* fees of some sort, no matter what Robinhood and/or any broker claims. Some fees offset others. See Share Classes [investopedia.com].
(2) Only invest money you have and won't need in the short
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(7) Don't take out $75000 in ***loans*** to buy stocks.
Guy's a moron.
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(7) Don't take out $75000 in ***loans*** to buy stocks.
Guy's a moron.
Covered that in #2, "Only invest money you have ...", but ya, he's a moron.
still better then an student loan as bankruptcy i (Score:2)
still better then an student loan as bankruptcy is an lot easier to use to get out of bad stock loans.
They must have not read the legal contract (Score:2)
If you didn't know, then you didn't read all the contracts you signed up. Here is one http://https//d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/RHS%20Customer%20Margin%20and%20Short%20Account%20Agreement.pdf [https]
If your going to put money in the stock market, you'd better be sure you know what your buying and know what the risks are.
Also, no one blames the casinos for making people homeless, so why should a broker be blamed?
I'm not condoning robinhood, I don't think its good for most people to be in sto
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Day Trading (Score:2)
Way before Robinhood we had cheap stock trading that led to a bunch of folks suddenly calling themselves Day Traders. Most of them lost money with regularity. This is a different platform but the same situation. Most people don't seem very good with money, especially those looking to get rich quick. Nothing new here.
Sounds like 90s day traders (Score:2)
Back in the late 90s bubble, day trading became a thing. The public was absolutely convinced that stocks were a sure bet, "this time it's different," etc. We just didn't have phones back then -- you might have a Palm Pilot with a cellular modem or something. But yes, people got sucked in, and some quit their jobs and started trading full time. It worked out great when the stock market wasn't doing anything other than going up...not so great when it tanked.
I guess the big story here is that Robinhood kind o
Wrong name (Score:3)
If you take from the poor to distribute it among a few rich people, don't call yourself Robin Hood.
Enabling gambling (Score:2)
This is enabling gambling for young and inexperienced. It is not investment by any means, and if you are telling otherwise you are grossly misinformed at best, manipulative at worst. I know, because one of my close friends lost a huge sum in "forex" trading, which is another platform for just looking at charts to feel "intelligent" to gamble, while the "casino", pardon me, the investment firm always wins.
These "complex", "exotic", "derivative" whatever you call them "investments" are nothing more than a boo
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Nothing new about no impulse control (Score:2)
This was in 2006. Nothing new.
Surprised Apple / Google don't crack down (Score:2)
But if you look at mobile trading applications in general it is amazing how unethical and occasionally criminal they are. Many of them encourage risk by trivializing what is going on. Some of them aren't trading apps at all CFD trading apps are simply gambling apps. Then you have fantasy league style trading apps (gambling again). Then you have forex / crypto currency apps that sprout like mushr
Old Wall Street saying (Score:2)
Using real-word terms might help (Score:2)
Reddit forums make it seem like option trading is "safe", when what it really amounts to is betting against someone who likely knows WAY more about the market than you do. Yes, you only lose the vig, but those can add up fast.
Accountability (Score:2)
It seems like this is basically crying that life is hard. Calling investing gambling is a bit sensitive because usually gambling implies being irresponsible. Investing isn't irresponsible of done the right way, but like any gambling you have to be willing to risk funds that you are capable of losing. Always be ready to accept losing any bet you make.
I too invest in Robinhood, but I typically deposit about $50 into my account each paycheck. While it has added up a bit over time, its money that I slowly t
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