Among the topics was the rise of retail traders and new brokerages like Robinhood.
Buffett Calls Out Robinhood: Buffett called out Robinhood in his remarks over the weekend.
“Robinhood has become a very significant part of the casino aspect of the casino group that has joined into the stock market in the last year or year and a half,” Buffett said.
Buffett said what Robinhood is doing isn’t immoral or illegal but cautioned that it is capitalizing on investors who are gambling on the stock market.
“I think the degree to which a very rich society can reward people who know how to take advantage, essentially, of the gambling instincts of the American public, the worldwide public — it’s not the most admirable part of the accomplishment.”
Robinhood Responds: Jacqueline Ortiz Ramsay, who is the head of public policy and communications for Robinhood, issued a blog post to respond to Buffett entitled “the old guard of investing is at it again.
“If 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,” Ramsay wrote.
Ramsay said Robinhood has made investing more accessible to more people, something the company takes pride in.
“At Robinhood, we’re not going to sit back while they disparage everyday people for taking control of their financial lives.”
Referencing the old guard, Ramsay said the elites benefited from the stock market for many years while many families were sidelined. Robinhood opened doors for the everyday people that can now invest.
“At Robinhood, people now don’t need thousands of dollars to begin investing.”
Robinhood pioneered commission-free trading and fractional shares to help people invest in large companies. As a reference point, Ramsay uses Berkshire Hathaway Class A shares that trade for more than $400,000 and were out of reach for many for years.
“With Robinhood, fans of the company can invest what they can afford and don’t need to amass what is a prohibitive sum for most Americans.”
Investors are looking to build their own nest egg, Ramsay said, which is helping the retail investing market thrive. Progress of investing is similar to advancements in other markets with Ramsay citing automobile, radio, internet and smartphone growing with technology.
“When it comes to investing, equal opportunity and accessibility is exactly what Robinhood is built to provide.”
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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