4 ms·

What's the reason of this article showing RH as an evil corp? People also gamble in Las Vegas, no one is stopping them. It is a good tool, thought me a lot abo

What's the reason of this article showing RH as an evil corp? People also gamble in Las Vegas, no one is stopping them. It is a good tool, thought me a lot about stocks and options. I am not investing heavily, but overhead of my investments would be far more higher with other competitors. The other trading companies literally asked my lifestory, bunch of scans and very long process of acceptance. Let alone their extremely cumbersome software would possibly (I am certain) lose more money because of the mistakes I would make.

WalterBright 6y ago
> literally asked my lifestory That's a result of federal regulation and lawsuits. Investors have a tendency to sue brokerages when they lose money, arguing that "nobody told me stocks could go down!" Hence brokerages try to head this off by refusing to sell to you if you don't certify you are a "sophisticated" investor.
jariel 6y ago
"People also gamble in Las Vegas, no one is stopping them." If Robin Hood was positioned and sold as 'gambling' and regulated a such, nobody would have a problem with it. But if anyone doesn't see the maximal hypocrisy in their branding (literally: Robin Hood) and the materiality of their offer, then that's the issue right there. By 'gravy' the author means 'fish' in gambling terms. There's just no way kids on their app, are, on the aggregate going to be able to be beating pros esp. on sophisticated things like options trading, but that's the whole point.
- kjksf 6y ago
  In stock market you're not playing against other people, including the "pros". You try to pick companies that will grow in the future. If you pick well, then it doesn't really matter if other people (including "pros") pick the same company or not because there's enough future growth for everybody. And I have much less reverence towards pros than you. The pros were saying that Amazon's valuation is so crazy that even if they sold every book in the universe, it still would be too high. In which they were right except they couldn't see that Amazon is not a book store. The pros were writing articles about how Nokia is, and will be, the king of the world a year after iPhone debuted and people were camping overnight and lining around the block to get it. And today an average price target on Tesla is 1/3 of the current price. The pros at predicting future price of the stock are failing spectacularly to do so, despite being paid big bucks by the most prestige financial institutions and having more access to information than anyone else. While I'm not playing against the pros, I sure am getting better returns than 90% of them.
  - i_cannot_hack 6y ago
    > While I'm not playing against the pros, I sure am getting better returns than 90% of them. How much you're making right now is not relevant for anything other than your personal bank account, the same way that winning a single hand at the poker table is not relevant for anything except your daily winnings. What is relevant for the rest of us in this context (since we have no stake in your current bank balance) is this: Will you beat the average professional, or better yet an index fund, over a period of 20 years? In fact, your personal success over 20 years is just as irrelevant, unless a statistically significant amount of people doing the same thing, as a well defined and replicable strategy, achieves similar success. "I did this thing and made more money than X" is just noise and not indicative of anything. P.S. Keeping up with, or even beating, the average professional, is easy: just invest in an index fund. So it's a very low bar to achieve.
  - jariel 6y ago
    "In stock market you're not playing against other people, including the "pros". You try to pick companies that will grow in the future." Ah ha! This is the fallacy, unfortunately. Once stocks are public, it's more akin to poker than investing. Every time you buy a stock, there is someone on the other side, wanting to sell it to you for the same price. Now, you have to ask yourself the question - why is that person will to part with something that you think is going to be worth more? If everyone were doing 'value investing' I think there would be a case. But with day trading, leveraged into option trading ... it's poker. People are 'making bets on stocks' just like they would on horses.
  - csa 6y ago
    > In stock market you're not playing against other people, including the "pros". In one short sentence, you showed why people are hating on RH. When you buy or sell a stock (or option or whatever), there is a counterparty to your trade. That person is making the trade because, essentially (in an oversimplified way), they believe the opposite of what you believe regarding the value of the underlying stock. One of you will be wrong. You are precisely "playing against other people", because without those other people, there will be no market. > If you pick well, then it doesn't really matter if other people (including "pros") pick the same company or not because there's enough future growth for everybody. While correct, this is shortsighted, and it is precisely why people (rightly or wrongly) suggest investing in an index fund. The issue is that the benchmark for successful investing is beating the general market, not zero. Specifically, if you aren't beating the market or some proxy thereof, you are paying an opportunity cost by investing inefficiently. Most professional money managers do not beat the market over any reasonable time frame (although they may mitigate certain types of risk relatively effectively), and the folks who sling stocks on RH or TD Ameritrade or whatever also do not beat the market over any reasonable time frame (certainly in aggregrate, and disproportionately true on an individual basis). > And I have much less reverence towards pros than you. I actually think this lack of reverence towards the pros is a good thing, but probably not for the reason you think. The pros who exploit less sophisticated counterparties don't advertise this fact very much, if at all -- it is not in their financial best interest to do so. There is terrible group-think on Wall Street, and there are niche firms that make a killing exploiting this group-think. I consider these niche firms the real "pros". > While I'm not playing against the pros, I sure am getting better returns than 90% of them. Your reference time frame is way too short if you actually think this is true. If you think you can scale your returns that beat the market over the long term on a relatively small eight figure fund, you stand to make many millions for yourself, and I recommend you make some friends in the financial world ASAP -- the money will find you. I will bet the don't on your ability to produce market beating results over the long term, since it seems to me that you don't even really understand the basic mechanics of how the market actually works or who the various players actually are. That said, best of luck.
BoorishBears 6y ago
People keep saying this and all I can say is, have you used Robinhood AND a "real" brokrage platform? Crashes during periods of high volatility at a much higher rate than competitors, puts detailed views of stock market behind a paywall, actively advertises options with asinine strike/expiries for people who don't get options, no full support for spreads are on their mobile app, their general poor handling of multi leg options strategies resulted in the suicide of person wrongly shown to owe millions in their account, terrible for tracking P/L, terrible fills on orders, the asinine fake chat bot system and lacking support in general Robinhood as a trading platform is deeply flawed, you say your commissions would outweigh your investments, but a) now zero fee trades is not a differentiator, and b) you're paying commissions on every RH trade with subpar fills, both on time taken to fill and prices, those add up over time, and are why RH could even afford commission free trades in the first place
- kjksf 6y ago
  Yes, I do use IBKR, which is one the "real" brokerage platforms. Your portrayal of RobinHood is a caricature. Crashes? It happened a few times. I'm not an active trader, so I don't use IBKR all the time, but even in my light usage when I couldn't log in because their security-theater activation code never arrives. Often IBKR can't show the value of my portfolio because, apparently, they can't load the data. The whole web app is slow, switching between different parts is slow. They don't even bother to send you an e-mail immediately after fulfilling the order. The way RobinHood show option pricing makes way more sense than IBKR's view. "Terrible fills on order" - you're just making stuff up. Care to show evidence that some other brokerage can fill your order faster or at better price than RobinHood. "IB's trading system had a defect that prevented clients from selling any WTI Futures at negative prices, which caused IB's clients over $100 million in losses." https://finance.yahoo.com/news/sadis-hired-investigate-interactive-brokers-140000848.html https://finance.yahoo.com/news/sadis-hired-investigate-inter... I'm sure there were people who lost money and committed suicide and were customers of "real" brokerage platforms. RobinHood is just a better app. Why do people think it's a bad thing is beyond me.
  - BoorishBears 6y ago

WalterBright 6y ago

> literally asked my lifestory That's a result of federal regulation and lawsuits. Investors have a tendency to sue brokerages when they lose money, arguing that "nobody told me stocks could go down!" Hence brokerages try to head this off by refusing to sell to you if you don't certify you are a "sophisticated" investor.

jariel 6y ago

"People also gamble in Las Vegas, no one is stopping them." If Robin Hood was positioned and sold as 'gambling' and regulated a such, nobody would have a problem with it. But if anyone doesn't see the maximal hypocrisy in their branding (literally: Robin Hood) and the materiality of their offer, then that's the issue right there. By 'gravy' the author means 'fish' in gambling terms. There's just no way kids on their app, are, on the aggregate going to be able to be beating pros esp. on sophisticated things like options trading, but that's the whole point.

kjksf 6y ago
In stock market you're not playing against other people, including the "pros". You try to pick companies that will grow in the future. If you pick well, then it doesn't really matter if other people (including "pros") pick the same company or not because there's enough future growth for everybody. And I have much less reverence towards pros than you. The pros were saying that Amazon's valuation is so crazy that even if they sold every book in the universe, it still would be too high. In which they were right except they couldn't see that Amazon is not a book store. The pros were writing articles about how Nokia is, and will be, the king of the world a year after iPhone debuted and people were camping overnight and lining around the block to get it. And today an average price target on Tesla is 1/3 of the current price. The pros at predicting future price of the stock are failing spectacularly to do so, despite being paid big bucks by the most prestige financial institutions and having more access to information than anyone else. While I'm not playing against the pros, I sure am getting better returns than 90% of them.
- i_cannot_hack 6y ago
  > While I'm not playing against the pros, I sure am getting better returns than 90% of them. How much you're making right now is not relevant for anything other than your personal bank account, the same way that winning a single hand at the poker table is not relevant for anything except your daily winnings. What is relevant for the rest of us in this context (since we have no stake in your current bank balance) is this: Will you beat the average professional, or better yet an index fund, over a period of 20 years? In fact, your personal success over 20 years is just as irrelevant, unless a statistically significant amount of people doing the same thing, as a well defined and replicable strategy, achieves similar success. "I did this thing and made more money than X" is just noise and not indicative of anything. P.S. Keeping up with, or even beating, the average professional, is easy: just invest in an index fund. So it's a very low bar to achieve.
- jariel 6y ago
  "In stock market you're not playing against other people, including the "pros". You try to pick companies that will grow in the future." Ah ha! This is the fallacy, unfortunately. Once stocks are public, it's more akin to poker than investing. Every time you buy a stock, there is someone on the other side, wanting to sell it to you for the same price. Now, you have to ask yourself the question - why is that person will to part with something that you think is going to be worth more? If everyone were doing 'value investing' I think there would be a case. But with day trading, leveraged into option trading ... it's poker. People are 'making bets on stocks' just like they would on horses.
- csa 6y ago
  > In stock market you're not playing against other people, including the "pros". In one short sentence, you showed why people are hating on RH. When you buy or sell a stock (or option or whatever), there is a counterparty to your trade. That person is making the trade because, essentially (in an oversimplified way), they believe the opposite of what you believe regarding the value of the underlying stock. One of you will be wrong. You are precisely "playing against other people", because without those other people, there will be no market. > If you pick well, then it doesn't really matter if other people (including "pros") pick the same company or not because there's enough future growth for everybody. While correct, this is shortsighted, and it is precisely why people (rightly or wrongly) suggest investing in an index fund. The issue is that the benchmark for successful investing is beating the general market, not zero. Specifically, if you aren't beating the market or some proxy thereof, you are paying an opportunity cost by investing inefficiently. Most professional money managers do not beat the market over any reasonable time frame (although they may mitigate certain types of risk relatively effectively), and the folks who sling stocks on RH or TD Ameritrade or whatever also do not beat the market over any reasonable time frame (certainly in aggregrate, and disproportionately true on an individual basis). > And I have much less reverence towards pros than you. I actually think this lack of reverence towards the pros is a good thing, but probably not for the reason you think. The pros who exploit less sophisticated counterparties don't advertise this fact very much, if at all -- it is not in their financial best interest to do so. There is terrible group-think on Wall Street, and there are niche firms that make a killing exploiting this group-think. I consider these niche firms the real "pros". > While I'm not playing against the pros, I sure am getting better returns than 90% of them. Your reference time frame is way too short if you actually think this is true. If you think you can scale your returns that beat the market over the long term on a relatively small eight figure fund, you stand to make many millions for yourself, and I recommend you make some friends in the financial world ASAP -- the money will find you. I will bet the don't on your ability to produce market beating results over the long term, since it seems to me that you don't even really understand the basic mechanics of how the market actually works or who the various players actually are. That said, best of luck.

BoorishBears 6y ago

People keep saying this and all I can say is, have you used Robinhood AND a "real" brokrage platform? Crashes during periods of high volatility at a much higher rate than competitors, puts detailed views of stock market behind a paywall, actively advertises options with asinine strike/expiries for people who don't get options, no full support for spreads are on their mobile app, their general poor handling of multi leg options strategies resulted in the suicide of person wrongly shown to owe millions in their account, terrible for tracking P/L, terrible fills on orders, the asinine fake chat bot system and lacking support in general Robinhood as a trading platform is deeply flawed, you say your commissions would outweigh your investments, but a) now zero fee trades is not a differentiator, and b) you're paying commissions on every RH trade with subpar fills, both on time taken to fill and prices, those add up over time, and are why RH could even afford commission free trades in the first place

kjksf 6y ago
Yes, I do use IBKR, which is one the "real" brokerage platforms. Your portrayal of RobinHood is a caricature. Crashes? It happened a few times. I'm not an active trader, so I don't use IBKR all the time, but even in my light usage when I couldn't log in because their security-theater activation code never arrives. Often IBKR can't show the value of my portfolio because, apparently, they can't load the data. The whole web app is slow, switching between different parts is slow. They don't even bother to send you an e-mail immediately after fulfilling the order. The way RobinHood show option pricing makes way more sense than IBKR's view. "Terrible fills on order" - you're just making stuff up. Care to show evidence that some other brokerage can fill your order faster or at better price than RobinHood. "IB's trading system had a defect that prevented clients from selling any WTI Futures at negative prices, which caused IB's clients over $100 million in losses." https://finance.yahoo.com/news/sadis-hired-investigate-interactive-brokers-140000848.html https://finance.yahoo.com/news/sadis-hired-investigate-inter... I'm sure there were people who lost money and committed suicide and were customers of "real" brokerage platforms. RobinHood is just a better app. Why do people think it's a bad thing is beyond me.
- BoorishBears 6y ago