Robinhood on Monday said that recent criticisms of the no-fee trading app by Warren Buffett and Charlie Munger were insults against younger investors, blasting the billionaires as out-of-touch elites who are "acting like they are the only oracles of investing."
The big picture: Critics have said that Robinhood — which says its mission " is to democratize finance for all," and has sought to popularize retail investing — pushes users into making more trades and reckless investing.
Driving the news: Buffett criticized Robinhood at a virtual shareholder meeting Saturday, saying the trading platform is “taking advantage of the gambling instincts of society,” Barron's reports.
- Buffett said the company has become "a very significant part of the casino group that has joined into the stock market in the last year or year and a half."
- “It creates its own reality for a while, and nobody tells you when the clock is going to strike 12 and it all turns to pumpkins and mice," he said. He added there is "nothing illegal to it, there's nothing immoral, but I don't think you build a society around people doing it."
- Buffett's longtime lieutenant Charlie Munger said at the shareholder meeting that Robinhood is "deeply wrong" and "god awful that something like that brought investments from civilized men and decent citizens."
What they're saying: "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," the company said in a statement.
- "It is clear that the elites benefited from a stock market that kept many families sidelined from participating while they amassed huge wealth from decades of investing — driving a deep wedge between the haves and have-nots."
- "Retail investing in America is thriving today because everyday investors are seizing the opportunity to build their own nest egg. It may never be nearly as big as the billions upon billions that the elites in this country have amassed. But it sure is something to celebrate."