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Robinhood stock trading app valued at $1.3B with big raise from DST

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Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#161

Post by SirLJ »

Marazan wrote: post #158
SirLJ wrote: post #150

Earlier quoted context omitted.

If you back tested and you re confident in your analysis, more power to you! I am yet to find a truly diversified portfolio that can generate good returns for me... My back tests and analysis are showing that I am not OK with buy and hold, because I don't want to stomach 50% draw downs or to wait 15 years for the NASDAQ to bounce back... I am not that risk tolerant and I might need to sell some of my investments for…

Well, yeah. If you are not risk tolerant you shouldn't be investing in the stock market.

No Sir, you should invest in the stock market according to your own risk tolerance! For me it works perfectly and I am very happy with my own strategy ;-)

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#162

Post by adambratt »

dublidu wrote: post #123
adambratt wrote: post #69

Robinhood is just a marketing play. Anything about them selling flow or using margin offerings to become profitable is not realistic. Traditional brokerages have a customer acquisition cost of around $400 to get someone to deposit at least $100 in an account. They've got a million users and continue to grow quicker and quicker. For a small multiple of traditional CAC they are already close to their >$1B valuation jus…

Robinhood's average account size is much smaller than the traditional brokerages, so they're not making much (if any) per client. I don't know if waiting for your clients to get rich is a viable strategy these days because these clients might jump to better options in the future.

They don't need to wait for the clients to get rich. Fidelity or Schwabb will buy them and then start to upsell the Robinhood users into other financial programs.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#163

Post by deepGem »

Robinhood could technically use the zero $ commission gambit to get people on board a Systematic investment plan for buying individual stocks. Since you are buying small amounts of stock every month, zero or very low commission is a huge draw. This ploy might reduce their customer acquisition costs as well.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#164

Post by greenyoda »

mtbcoder wrote: post #92
greenyoda wrote: post #35

Earlier quoted context omitted.

"who lower the barrier of entry toward financial health for the average consumer..." The barrier is already pretty low: - Max out your 401-K (and collect your company match, if any). - Invest in low-cost index funds from Vanguard. - Pay off your credit card debt, if any (since you probably won't make 20+% a year on your other investments). - Don't buy lots of stuff you don't need. On average, you'll get much better r…

Is it low though? You read all the time that your average American barely has any money set aside for retirement or that they often need to leverage credit cards for emergencies. Even those that can put money aside, how feasible is it for them to max out a 401K? The barrier to entry into the stock market is incredibly high when you've only got at best $25 at the end of the month in your pocket.

1. People who are using Robinhood for trading stocks are probably people with stable jobs and disposable income, not people who are struggling to get by. If you have enough extra money to trade stocks, you probably have enough to max out your 401-K.

2. If you only have $25 left at the end of the month, you shouldn't be investing in stocks at all. You should be putting your $25 in a savings account for emergency expenses.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#165

Post by cheriot »

mcguire wrote: post #132
cheriot wrote: post #56

Earlier quoted context omitted.

Would they not try to collect like any other loan?

No. The broker first contacts the investor to allow them to deposit more money to bring up their equity percentage; if thet doesn't work, they sell the borrowed assets to get the percentage up. One feature of margin loans is that you are required to have assets to cover them. A relic of the great depression, IIRC.

Those collateral assets start out covering the loan, but are often invested in the same assets as the borrowed money and will loose value at the same time. So when the collateral no longer covers the loan, the investor gets a margin call and doesn't have the money... then what?

Does the broker have any recourse to credit bureaus or courts?

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#166

Post by traviscj »

bigtunacan wrote: post #96
user5994461 wrote: post #94

Earlier quoted context omitted.

> There's a reason you can't buy lottery tickets with credit cards. Well. You can. Not sure what you were trying to say.

Since it is gambling is regulated at the state levels this varies by state. 14 states allow for purchasing lottery tickets with credit cards, the others don't.

I'm most surprised processors/issuers want to take on the risk from allowing these transactions.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#167

Post by Marazan »

SirLJ wrote: post #161
Marazan wrote: post #158

Earlier quoted context omitted.

Well, yeah. If you are not risk tolerant you shouldn't be investing in the stock market.

No Sir, you should invest in the stock market according to your own risk tolerance! For me it works perfectly and I am very happy with my own strategy ;-)

The description of your strategy (which sounds identical to momentum trading) is a quintessential very-high-risk-picking-up-pennies-in-front-of-the-steamroller approach.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#168

Post by mcguire »

SirLJ wrote: post #131
mcguire wrote: post #121

Earlier quoted context omitted.

" Stock Symbol, Date, Open, High, Low, Close, Volume " Sounds like fun for those that like technical analysis.

Why limit yourself to technical analysts only? Use your imagination, with data like this you can test value investing, arbitrage, trend following... For any type of investing test you'll need to know the price of the security on any given date in the last 20 years...

You'll also need earnings and balance sheet information, which this doesn’t have. It's available, but if you're going to grub that out,...

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#169

Post by SirLJ »

Marazan wrote: post #167
SirLJ wrote: post #161

Earlier quoted context omitted.

No Sir, you should invest in the stock market according to your own risk tolerance! For me it works perfectly and I am very happy with my own strategy ;-)

The description of your strategy (which sounds identical to momentum trading) is a quintessential very-high-risk-picking-up-pennies-in-front-of-the-steamroller approach.

one thing for sure is that you have no idea what my strategy is and I am not about to tell you either...

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#170

Post by Marazan »

SirLJ wrote: post #169
Marazan wrote: post #167

Earlier quoted context omitted.

The description of your strategy (which sounds identical to momentum trading) is a quintessential very-high-risk-picking-up-pennies-in-front-of-the-steamroller approach.

one thing for sure is that you have no idea what my strategy is and I am not about to tell you either...

You described it two posts up. Buying on upswings selling on downswings.
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