Legendary investor Warren Buffett believes millennial-favored stock trading app Robinhood is contributing to the speculative, casino-like trading activity in the stock market and benefitting from it.
Robinhood has “become a very significant part of the casino aspect, the casino group, that has joined into the stock market in the last year or year and a half,” Buffett said at Berkshire Hathaway’s annual meeting on Saturday.
The “Oracle of Omaha” also said he is looking forward to reading Robinhood’s pre-initial public offering SEC S-1 filing as the company nears it public debut, expected in the first half of 2021. The company, which pioneered zero-commission trading, is seen as the main gateway for young investors to access the markets.
“American corporations have turned out to be a wonderful place for people to put their money and save but they also make terrific gambling chips,” said Buffett. “If you cater to those gambling chips when people have money in their pocket for the first time and you tell them they can make 30 or 40 or 50 trades a day and you’re not charging them any commission but your selling their order flow or whatever...I hope we don’t have more of it.”
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