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Robinhood S-1 IPO

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Re: Robinhood S-1 IPO

#381

Post by gruez »

lottin wrote: post #380
gruez wrote: post #375

Earlier quoted context omitted.

>but you already had an investment —the bond— which you sold for cash. And then what? After you sold that bond you're going to stop investing?

I don't know... if you wanted to sell the bond in order to buy stocks or something else, you'd have done that anyway, so it's unclear how the fact that the Fed purchased your bond is making everything to go up in price.

>if you wanted to sell the bond in order to buy stocks or something else, you'd have done that anyway

Where is the fed getting the 4 trillion dollars worth of bonds from? Existing bond holders, right? Are you telling me that even without the fed buying up bonds, that bond holders would still be converting 4 trillion dollars worth of bonds (net) to stocks/cash?

Re: Robinhood S-1 IPO

#382

Post by wolverine876 »

waych wrote: post #378
wolverine876 wrote: post #338

Earlier quoted context omitted.

We may be confusing market efficiency and economic efficiency. Economic efficiency is about limited assets (money, etc.) being used most productively. The economic value of something isn't arbitrary or whatever the market says; it depends on how productive it is. For example, the market may price Dutch tulip bulbs at thousands of dollars each, but that's not their value nor is it economically efficient to tie up thou…

I'm not confusing them, I'm making a distinction. My posts have been about market efficiency and I didn't say a thing about economic efficiency. If 1000 new participants wanted to buy and sell rockets, yet, the price would become more "efficient". There would be more sellers and buyers, and more room to negotiate and trade. Your example is a stupid one.

> stupid

It's disappointing to see that happen.

Re: Robinhood S-1 IPO

#383

Post by stouset »

porb121 wrote: post #379
stouset wrote: post #373

Earlier quoted context omitted.

In other words, Robinhood is bringing fresh chum to the financial sharks of the world. How do we reconcile this with the narrative that they’re the good guys delivering wealth generation through investing to the masses?

a lot of people have given very thorough explanations of why pfof is not an evil thing in this thread. i suppose you're free to believe your own narrative, if you want.

I have never claimed that PFOF is evil.

My only point is that the narrative of Robinhood is completely backwards. Far from the “stealing from the rich to give to the poor” backstory from which the name comes from, all they’ve done is encourage hordes of unsuspecting sheep to venture deep into the wolves’ den.

PFOF may not be evil, but Robinhood certainly is. The fact that their customers’ orders are of such high value makes it abundantly clear who the moneyed players think losers at the table are. Anyone paying attention understands that Robinhood’s product is a continuous flow of suckers to their paying customers. Trading on Robinhood is an implicit bet with apparently quite poor odds that you’re not one of those suckers.

That doesn’t mean you’re better off trading on some other platform. It means they're goading you into playing the wrong game in which entities with billions at stake are so convinced you will lose they’re happy to pay for the privilege of sitting down at the table with you. The real lesson is that you should be playing a different game than the one Robinhood is promoting.

Re: Robinhood S-1 IPO

#384

Post by waych »

wolverine876 wrote: post #382
waych wrote: post #378

Earlier quoted context omitted.

I'm not confusing them, I'm making a distinction. My posts have been about market efficiency and I didn't say a thing about economic efficiency. If 1000 new participants wanted to buy and sell rockets, yet, the price would become more "efficient". There would be more sellers and buyers, and more room to negotiate and trade. Your example is a stupid one.

> stupid It's disappointing to see that happen.

It's a really bad example. You only have to look back a few years to see the market with less participants, and look at the market efficiency of acquiring a rocket or say putting 1kg into orbit.

The only way your argument works is if we assume every new market participant is completely ignorant and completely susceptible to bad information. Like participants entering the market are doing so in bad faith and completely clueless, and like bad information didn't exist before participants entered. It's a really stupid argument to make.

So ya, it is disappointing to see happen.

Re: Robinhood S-1 IPO

#385

Post by gruez »

Judgmentality wrote: post #376
gruez wrote: post #320

Earlier quoted context omitted.

> Robinhood is being investigated for it. Why not blame everyone that's guilty? Because being investigated means you're guilty? I guess a fair and impartial trial is just red tape.

Okay, I think you're missing the point. What they did was illegal. Why would you not blame corporations for financial crimes? They stole money - I have no idea why you "wouldn't blame them" for that. Sure, if it turns out they didn't commit the crime don't blame them (but there is overwhelming evidence that I have personally witnessed so I already know for a fact that they did this). What I don't get is why this guy…

> What they did was illegal. Why would you not blame corporations for financial crimes? They stole money

You think that what they did was illegal, but the person you initially replied to (https://news.ycombinator.com/user?id=adabyron) only said he "wasn't happy about it". That's not the same as "apologizing for theft".

>but there is overwhelming evidence that I have personally witnessed so I already know for a fact that they did this

do share.

Re: Robinhood S-1 IPO

#386

Post by lottin »

gruez wrote: post #381
lottin wrote: post #380

Earlier quoted context omitted.

I don't know... if you wanted to sell the bond in order to buy stocks or something else, you'd have done that anyway, so it's unclear how the fact that the Fed purchased your bond is making everything to go up in price.

>if you wanted to sell the bond in order to buy stocks or something else, you'd have done that anyway Where is the fed getting the 4 trillion dollars worth of bonds from? Existing bond holders, right? Are you telling me that even without the fed buying up bonds, that bond holders would still be converting 4 trillion dollars worth of bonds (net) to stocks/cash?

Well, yes. The average daily trading volume in the US bond market is in the order of 0.8-1.0 trillion, which means 4 trillion over a span of several months is nothing. Inflation doesn't come about as a result of the Fed pumping asset prices up, this is a misunderstanding on your part. It comes about, at least in theory, as a consequence of lower nominal interest rates.

Re: Robinhood S-1 IPO

#387

Post by gruez »

lottin wrote: post #386
gruez wrote: post #381

Earlier quoted context omitted.

>if you wanted to sell the bond in order to buy stocks or something else, you'd have done that anyway Where is the fed getting the 4 trillion dollars worth of bonds from? Existing bond holders, right? Are you telling me that even without the fed buying up bonds, that bond holders would still be converting 4 trillion dollars worth of bonds (net) to stocks/cash?

Well, yes. The average daily trading volume in the US bond market is in the order of 0.8-1.0 trillion, which means 4 trillion over a span of several months is nothing. Inflation doesn't come about as a result of the Fed pumping asset prices up, this is a misunderstanding on your part. It comes about, at least in theory, as a consequence of lower nominal interest rates.

>Well, yes. The average daily trading volume in the US bond market is in the order of 0.8-1.0 trillion, which means 4 trillion over a span of several months is nothing.

I was talking about 4 trillion net. In other words, 4 trillion dollars worth of outflows. 1 trillion dollars worth of trades per day doesn't tell much because it could very well be people selling bonds and then buying other bonds. On the other hand, google says that the US bond market is worth $46 trillion. That's almost 9% pumped into the market. If all that cash stayed in the bond market and didn't leak out, you'd expect bond yields to drop by 9%[1], which I don't see happening.

[1] bonds are essentially IOUs. They have fixed returns, which means the more you pay for them, the lower your yield is. For instance, if you bought a bond that's worth $105 on maturity (1 year from now) for $100, your yield is 5%. If the fed comes in and pumps a bunch of money into the market such that $100 bond is now worth $108.69, then your yield is negative (you paid more for a bond than what it will pay back).

>Inflation doesn't come about as a result of the Fed pumping asset prices up, this is a misunderstanding on your part.

In the technical sense that inflation = CPI by definition, then yes you're right. But that's not what I was arguing for, which is that fed pumping money has inflated the market.

Re: Robinhood S-1 IPO

#388

Post by Judgmentality »

gruez wrote: post #385
Judgmentality wrote: post #376

Earlier quoted context omitted.

Okay, I think you're missing the point. What they did was illegal. Why would you not blame corporations for financial crimes? They stole money - I have no idea why you "wouldn't blame them" for that. Sure, if it turns out they didn't commit the crime don't blame them (but there is overwhelming evidence that I have personally witnessed so I already know for a fact that they did this). What I don't get is why this guy…

> What they did was illegal. Why would you not blame corporations for financial crimes? They stole money You think that what they did was illegal, but the person you initially replied to ( https://news.ycombinator.com/user?id=adabyron ) only said he "wasn't happy about it". That's not the same as "apologizing for theft". >but there is overwhelming evidence that I have personally witnessed so I already know for a fact…

He didn't just say he "wasn't happy about it," he also said "I don't blame them." You're right, it's not apologizing, but it's exoneration.

I'm guessing you're aware of the trading halts in January and are arguing that's legal (or at least remain unconvinced it's illegal). Rather than have a long argument about whether or not brokers were legally entitled to restrict trading, I'll just concede as it really wasn't the point I wanted to make. I'm not a lawyer, there is nuance in the legal system, blah blah blah. I could go down the GME rabbit hole but nobody gives a shit. I think of it more like when a cop gets away with murder in our legal system. Did he commit a crime? Well, technically no, because our legal system said so - but I still feel comfortable calling him a criminal. Likewise, nobody in the US went to jail for the 2008 financial collapse, so I guess nobody committed any crimes.

But that's me moving the goalposts, making appeals to emotions, and just generally making a very weasely argument. My frustration is with people so willfully absolving others of guilt. I feel like the way to make the world a better place is by holding people accountable for their actions, instead of just chant it as some bullshit mantra at another dumb tech startup that provides no real value to anyone. Obviously other people have different perspectives and may not have seen any wrongdoing in what happened. Everyone is entitled to their beliefs. And I'm allowed to think people are ignorant and morally bankrupt for the beliefs they hold.

So you're right, but I don't care because that's not what matters.

Re: Robinhood S-1 IPO

#389

Post by pgwhalen »

tofuahdude wrote: post #8

Robinhood's "values": Safety First, Participation Is Power, Radical Customer Focus, and First-Principals Thinking There's a real dissonance in the combination of Safety First and Participation Is Power points. Where do we draw the line between providing the ability to participate and safety? Many of the tools Robinhood has "democratized" for the masses are in fact quite financially dangerous to unsophisticated users.…

Would it be "dissonant" if a skydiving company advertised one of its values as prioritizing safety?

Re: Robinhood S-1 IPO

#390

Post by dilyevsky »

randomhodler84 wrote: post #266
dilyevsky wrote: post #121

Earlier quoted context omitted.

CS had like $9 fee per trade before they felt the heat from RH. Which btw was fine by me since it was small potatoes if you just casually invest and hold for a year or longer. What they really democratized is incessant day-trading, otm calls on dogshit stocks etc. basically a casino pretending to be a brokerage

It was never ok. Trade fees were a gatekeeping measure to dissuade retail investors. Since RH started I have been able to build a portfolio of many single individual stocks (my own market “index fund”), some worth less than $10. This was never possible under pay per trade regime.

Managing your own penny stock index is great if your time is worth nothing to you. But also IB had pretty low fees for years and CS had no fees on ETFs
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