Whenever Warren Buffett and Charlie Munger impart their wisdom on investing, business or life in general, it’s well worth listening. And their latest interview, with CNBC’s Becky Quick, which aired last Tuesday, is no exception.
There are numerous highlights. We learned, for example, how they Buffett and Munger each other and what they learned from their fathers. They discussed the Archegos scandal, how it made fools of the industry, and why regulators need to crack down on the loose lending standards among banks that allowed it to happen. We learned, too, how Munger loves Zoom but Buffett doesn’t, preferring to use the telephone instead.
For me, however, the most interesting thing to come put of the interview was quite how much Buffett and Munger both dislike the trading app Robinhood. Munger described Robinhood as a “gambling parlour masquerading as a respectable business”. The advent of so-called “free” trading apps, they warned, is luring people away from more responsible forms of wealth generation.
This is what else they had to say on the subject:
MUNGER: Well, Robinhood is beneath contempt.
QUICK: Why?
MUNGER: Well, it’s a gambling parlour masquerading as a respectable business.
QUICK: And the pushback on that is always, “This is a way of getting average people into the markets,” people–
MUNGER: Well, of course you don’t want–
QUICK: Who didn’t have access–
MUNGER: To say you’re a, it’s a gambling parlour, but it is a gambling parlour.
BUFFETT: It’s not encouraging people to buy a very, very, very low-cost index fund and hold it for 50 years. I will guarantee you that you will not walk in there, get that advice.
MUNGER: No.
BUFFETT: Instead, you’ll get advice on how you can trade options and, and, and, and, and they’ll tell you that–
MUNGER: And it’s telling people they aren’t paying commissions when the commissions are simply disguised in the trading. It’s basically a sleazy, disreputable operation.
Picture via CNBC
Here’s a YouTube link to the CNBC programme the interview featured on, Buffett and Munger: A Wealth of Wisdom. Please note that the full-length programme is currently only available to viewers in certain countries, but you should be able to view shorter clips on the internet. CNBC has helpfully provided a full transcript of the interview, which you can read here.
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Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
