Robinhood and How to Lose Money
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Robinhood and How to Lose Money
1–10 of 209 posts
Re: Robinhood and How to Lose Money
#2That debate at the end over how the NYT portrayed how much money is made off of the order flows is interesting.
Is it reasonable for the NYT journalist to use total payment order flow revenue / average dollar amount per account instead of diving by total number of accounts? The latter seems like it would be a cleaner way to say "this is, on average, how much they're making off of each person"
Whatever it is - Robinhood is cleaning up. Wish I was invested in the company instead of just using it.
Re: Robinhood and How to Lose Money
#3That debate at the end over how the NYT portrayed how much money is made off of the order flows is interesting. Is it reasonable for the NYT journalist to use total payment order flow revenue / average dollar amount per account instead of diving by total number of accounts? The latter seems like it would be a cleaner way to say "this is, on average, how much they're making off of each person" Whatever it is - Robinho…
I'll give credit to the NYT journalist at least for showing their work in this thread: https://twitter.com/nathanielpopper/status/12812471249155809...
Re: Robinhood and How to Lose Money
#4That debate at the end over how the NYT portrayed how much money is made off of the order flows is interesting. Is it reasonable for the NYT journalist to use total payment order flow revenue / average dollar amount per account instead of diving by total number of accounts? The latter seems like it would be a cleaner way to say "this is, on average, how much they're making off of each person" Whatever it is - Robinho…
The "value" of order flow is not "per person". Ordinarily, it should correlate with order volume, but RH is getting far more than expected on (something close, but not exactly) that measure. I wonder if RH customers maybe trade far more than those of other brokerages? Maybe that data isn't publicly available, requiring them to use average account value as a proxy?
Anyway, the point here is to stoke anger from RH customers by calling them stupid (making bad trades). Dividing their revenue by number of accounts would tell a different story, one that would also anger customers because, again, it paints them in a bad light. But this time their stupidity would manifest itself by allowing RH to profit so much more than other brokerages.
Re: Robinhood and How to Lose Money
#5Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil.
I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares.
To pay $1500 for a share of TSLA? When I could put that precious money into my savings account? Pass. But if I can buy 0.1 shares at $150? Now we’re talking. Hey, TSLA went up a bit today. I’ll buy another 0.1 shares. Etc. That, without hyperbole, is truly the beginnings of the democratization of the stock market.
Re: Robinhood and How to Lose Money
#6Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
Mutual funds and ETFs are basically that but you get a sliver of like several hundred high quality companies instead of just one. I’d argue those products did more for democratization because they allowed investors with small sums of money to achieve diversification.
Re: Robinhood and How to Lose Money
#7Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
You can do those things on any brokerage. You can buy options pretty much anywhere. Not seeing where the democratization is coming from that is different from the status quo
Re: Robinhood and How to Lose Money
#8Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
You can do those things on any brokerage. You can buy options pretty much anywhere. Not seeing where the democratization is coming from that is different from the status quo
Possible != easy, democratization implies it's easy enough for the average person to do.
Re: Robinhood and How to Lose Money
#9Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
Mutual funds and ETFs are basically that but you get a sliver of like several hundred high quality companies instead of just one. I’d argue those products did more for democratization because they allowed investors with small sums of money to achieve diversification.
The only thing to remember is, as a customer, you’d be paying for that service in really bad execution. I still think this is genuinely democratizing but looks like Fidelity has this also (called the absurd “stock by the slice”)
Re: Robinhood and How to Lose Money
#10Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
That's the problem of RH - in your cases stock is managed because of "frictionless UI" whilst it should be managed due to financial considerations but not because they have made it easy as getting a cup of coffee.
You need to understand the model how low cost services like RH operate - they sell all your data to big hedge funds. Guess what happen at certain moment when smart money will decide it's time to cut pigs - massive wealth redistribution with robihooders being cut. It has happened before in history and will happen again since history doesn't really teach majority of us anything at all.