Charlie Munger renews critique of Robinhood, likes app for racetracks

He added: ‘These are really just wild speculations, like casino gambling or racing on racetracks. There is a long history of destructive capitalism, these organs of trade acquired by the people who benefit from it. ‘

Munger, 97, is the vice chairman of Berkshire Hathaway Inc. and Warren Buffett’s longtime business partner. His comments Thursday agree with the criticism he drew on Robinhood the previous day.

Those initial heels of mr. Munger caused a sharp setback from the brokers. Robinhood spokeswoman Jacqueline Ortiz Ramsay said Munger’s remark Wednesday about people who have the mindset of race after race is “disappointing and elitist.” Munger made the remark after saying, “It’s really stupid to have a culture that encourages so much gambling in stocks.”

“In one fell swoop, a whole new generation of investors has been criticized and these comments look forward to the cultural shift that is taking place in our country today,” she said. “Robinhood was created to allow people who do not have access to generational wealth or the resources that come with it to invest in the US stock market.”

After fully listening to Robinhood’s statement later on Thursday, Mr. Munger said: ‘Everyone wants to earn their way of money. It’s just human nature. That’s all I want to say about this. ”

Robinhood recently found himself in the middle of the storm surrounding GameStop Corp.

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shares, which rose, crashed and rose again amid a frenzy by individual investors. The chief executive was confronted during a hearing in Congress this month.

The brokerage also investigated security regulators in Massachusetts, who criticized the trading platform in December for exposing their customers to ‘unnecessary trading risks’. Customers have been attracted to the app for a long time due to the free stock trading and the simple and attractive mobile first platform. The regulators of Massachusetts, on the other hand, said that many of the same features “played” the investment experience.

Robinhood disputed the allegations, previously saying he had made a significant improvement in his options offering, adding precautionary measures and improved educational materials. Last month, the brokers reacted to the regulators of Massachusetts, saying their complaint misrepresented “the Robinhood experience.”

The back and forth with mr. Munger started when the notable investor was at the Daily Journal’s annual meeting Corp.

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, of which he is chairman.

During Wednesday’s meeting, Mr. Munger, who earlier pointed out the virtues of patience when investing, asked about the recent Reddit-fueled frenzy surrounding GameStop. In a wide answer, Mr. Munger said he believes you should try to make your money in this world by selling things to other people that are good for them. “

‘If you sell gambling services to them, where you make a profit, like many of these new brokers who specialize in luring the gamblers, I think it’s a dirty way to make money, and I think we are crazy to allow it, ”goes mr. Munger continues.

Munger, who was asked later Wednesday where he sees an excess in the financial system, said it was the worst “in the momentum trading by novice investors being used by new types of brokerage operations such as Robinhood.”

“I think all these activities are deplorable,” he said. “I think civilization would do better without it.”

Write to Caitlin McCabe at [email protected] and Jason Zweig at [email protected]