Charlie Munger renews Robinhood critique, loves racetrack betting app

He added: “It’s really just wild speculation, like casino gambling or racetrack betting. There is a long history of destructive capitalism, these trade orgies are stoked by the people who profit from them. ”

Mr. Munger, aged 97, is the Vice Chairman of Berkshire Hathaway Inc. and Warren Buffett’s regular business partner. His comments Thursday echoed the criticism he’d thrown at Robinhood the day before.

Mr. Munger’s first barbs prompted a sharp response from the brokerage. Robinhood spokeswoman Jacqueline Ortiz Ramsay said on Wednesday that Mr Munger’s comment about people with the racetrack punters’ mindset was “disappointing and elitist.” Mr. Munger made the comment after saying, “It’s really stupid to have a culture that encourages equity gambling equally.”

“In one fell swoop, a whole new generation of investors has been criticized, and this comment ignores the cultural shift currently taking place in our country,” she said. “Robinhood was created to empower people who do not have access to generational power or its resources to invest in the US stock market.”

After listening fully to Robinhood’s statement later Thursday, Mr. Munger said, “Everyone wants to protect their way of life. That’s just human nature. That’s all I want to say about this. “

Robinhood recently found itself at the center of the storm around GameStop Corp.

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stocks, which have soared, crashed and rallied again amid a frenzy by individual investors. The chief executive officer was faced with tough questions at a Congressional hearing this month.

The brokerage was also scrutinized by Massachusetts securities regulators, who in December criticized the trading platform for exposing clients to “unnecessary trading risks.” Customers have long been drawn to the app for its free stock trading and simple and attractive mobile-first platform. Massachusetts regulators, on the other hand, have said that many of those same characteristics have “gamified” the investment experience.

Robinhood has disputed the allegations, previously saying it has made “significant improvements” to the options trading offering and has added security measures and improved educational materials. Last month, the brokerage responded to Massachusetts regulators, saying their complaint misrepresented “the Robinhood experience.”

The back and forth with Mr. Munger began when the remarkably outspoken investor was at the Daily Journal’s annual meeting Corp.

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, of which he is chairman.

At Wednesday’s meeting, Mr. Munger, who had previously touted the virtues of patience in investing, was asked about the recent Reddit-fueled frenzy surrounding GameStop. In a comprehensive response, Mr. Munger said he believes “you should try to make your money in this world by selling other people things that are good for them.”

“If you sell them betting services, taking the profit off the top, like many of these new brokers who specialize in bringing in gamblers, I think that’s a nasty way to make money, and I think we’re crazy about it, ”continued Mr. Munger.

When asked later Wednesday where he saw a surplus in the financial system, Mr. Munger said it is most blatantly “in the momentum trading of budding investors attracted by new types of brokerage such as Robinhood.”

“I think all this activity is regrettable,” he said. “I think civilization would do better without it.”

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