Charlie Munger renews Robinhood criticism, compares app with racetrack betting

He added: “It’s just wild speculation, such as casino gambling or racetrack betting. There is a long history of destructive capitalism, these trading orgies supported by the people who take advantage of them. ”

Mr. Munger, 97, is vice president of Berkshire Hathaway Inc. and Warren Buffett’s business partner. His comments on Thursday echoed the criticism he made at Robinhood the day before.

Those initial pits from Mr. Munger led to a sharp retaliation from the intermediation. Robinhood spokeswoman Jacqueline Ortiz Ramsay said on Wednesday that Munger’s comment about people with the bettors’ mentality was “disappointing and elitist.” Mr Munger commented: “It’s very stupid to have a culture that encourages gambling in action just as much.”

“In one fell swoop, a new generation of investors has been criticized and this comment overlooks the cultural change that is taking place in our nation today,” she said. “Robinhood was created to allow people who don’t have access to generational wealth or the resources that come with it to start investing in the American stock market.”

After listening to Robinhood’s statement in full on Thursday, Mr Munger said: “Everyone wants to protect their livelihood. This is just human nature. That’s all I want to say about this. ”

Robinhood recently woke up in the middle of the storm around GameStop Body.

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stocks, which rose, collapsed and rose again amid a frenzy of individual investors. Its executive director faced tough questions during a congressional hearing this month.

Brokerage also faced control from Massachusetts regulators, who in December criticized the trading platform for exposing customers to “unnecessary trading risks.” Customers have long been attracted to the app due to its free stock transactions and simple and attractive mobile platform. Instead, Massachusetts regulators said many of the same characteristics “gamified” the investment experience.

Robinhood disputed the allegations and previously said it had made “significant improvements” to its options trading offering and added guarantees and improved educational materials. Last month, the brokerage responded to Massachusetts regulators, saying their complaint distorted the “Robinhood experience.”

Back and forth with Mr. Munger began when the frank investor was at the annual meeting of the Daily Journal Body.

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, of which he is president.

During Wednesday’s meeting, Mr. Munger, who previously claimed the virtues of patience when investing, was asked about the recent frenzy fueled by Reddit around GameStop. In a broad response, Mr Munger said he was of the opinion that “you should try to make money in this world by selling the other things that are good for them”.

“If you sell them gambling services, where you make top profits like many of these new brokers that specialize in attracting players, I think it’s a dirty way to make money and I think we’re crazy to allow it,” he continued. Mr. Munger.

Asked later Wednesday where he saw the excess in the financial system, Mr Munger said it was most blatant “in the momentum of trading by novice investors lured by new types of brokerage operations such as Robinhood”.

“I think all this activity is unfortunate,” he said. “I think civilization would be better off without it.”

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