Robinhood makes it very easy for young traders to lose money
Young traders have been charmed by Robinhood’s one-click trading, easy access to complex investment products, and features like falling confetti and emoji-filled phone notifications that make it feel like a game. These young traders buy and sell the riskiest financial products and do so more frequently than customers at other retail brokerage firms, but their inexperience can lead to staggering losses.
Robinhood’s website has also gone down more often than those of its rivals — 47 times since March for Robinhood and 10 times for Schwab — leaving many customers to watch their portfolios drop in value without being able to do anything about them.
As Bloomberg’s Matt Levine explains, trading on Robinhood may mislead traders about their trading skills. Let’s say you invest $10,000. If you lose some money making bad options trades, and then make a lot more money making good options trades, and then your broker’s website shuts down at the exact moment that you try to cash in on those good trades, and when it reopens all your money is gone, that does seem like something that you’d blame your broker for.
You would be pleased with yourself for the enormous skill you demonstrated, not only in accumulating profits but also in choosing to cash out at exactly the right time. Well, except for the broker’s software outage, which hardly reflects on your amazing skill. That does seem like the broker’s fault.
America’s optimism about COVID-19 may become an existential threat
The accelerating resurgence of Covid-19 in the U.S. suggests that we have learned nothing from the tragic experience of the past several months, that things are spinning out of control and that wishing for the best is folly. The country has been setting records for daily case counts, now nearing 3.5 million. In states that reopened early, new cases have been increasing faster every day, suggesting that the disease is spreading exponentially.
But what’s even scarier is the propensity of Americans to ignore or downplay a malaise that is generating tens of thousands of entirely preventable deaths. The aversion of many Americans to wearing a thin piece of cloth across their faces is restraining an already-shaky recovery. Yet millions of Americans have been reluctant to embrace masks.
Designed to deceive
Why do people keep gambling even when it stops being fun? Why stick with games people know are designed for them to lose? Are some people just more unlucky than the rest of us, or simply worse at calculating the odds? When you engage in recreational gambling, you are not simply playing against the odds, but also battling an enemy trained in the art of deceit and subterfuge. Games of chance have a vested interest in hooking players for longer and letting them eventually walk away with the impression they did better than chance, fostering a false impression of skill.