WEBVTT - Robinhood: Stealing from the poor and giving to the rich? 0:00:08.200 --> 0:00:12.400 The legend of Robin Hood begins in the Sherwood forms, 0:00:12.920 --> 0:00:18.760 with rob and his merry men reappropriating taxes unjustly collected 0:00:18.800 --> 0:00:28.000 by the evil Sheriff of Nottingham. Yeah, ah, sorry, wrong, 0:00:28.120 --> 0:00:34.280 Robin Hood. The story of this robin Hood begins in 0:00:34.400 --> 0:00:38.879 New York City, where two recent Stanford graduates, Vladimir Tenev 0:00:39.000 --> 0:00:43.240 and Baju, bought toil Away, building software for high frequency 0:00:43.280 --> 0:00:47.479 traders on Wall Street. Inside their office, computer's home and 0:00:47.600 --> 0:00:56.480 keyboards click while outside. I'm here myself as a free individual, 0:00:56.880 --> 0:01:01.400 to humanize the markets and to make Wall Street here 0:01:01.480 --> 0:01:11.560 the sound of what democracy means. Inspired by the Occupy movement, 0:01:11.640 --> 0:01:16.120 to help bridge the economic divide and democratize finance, Tenefan 0:01:16.240 --> 0:01:19.960 Bott designed an app that let anyone access the stock 0:01:20.000 --> 0:01:25.000 market for free, and they named it after everyone's favorite 0:01:25.000 --> 0:01:37.640 egalitarian outlaw, Robin Hood. Welcome to Calling Bullshit, the podcast 0:01:37.680 --> 0:01:41.760 about purpose washing, the gap between what an organization says 0:01:41.800 --> 0:01:45.080 they stand for and what they actually do, and what 0:01:45.120 --> 0:01:47.680 they would need to change to practice what they preach. 0:01:48.280 --> 0:01:50.880 I'm your host, Time Montague, and I've spent over a 0:01:50.960 --> 0:01:55.160 decade helping organizations define what they stand for, their purpose 0:01:55.600 --> 0:01:57.960 and then help them to use that purpose to drive 0:01:58.040 --> 0:02:03.840 transformation throughout their business. Unfortunately, at a lot of institutions today, 0:02:04.080 --> 0:02:07.080 there's still a pretty wide gap between word and deed. 0:02:07.600 --> 0:02:12.240 That gap has a name bullshit. But, and this is important, 0:02:12.600 --> 0:02:15.880 we believe that bullshit is a treatable condition. So when 0:02:15.880 --> 0:02:20.200 our bullshit detector lights up, we're going to explore everything 0:02:20.280 --> 0:02:35.520 the organization should do to fix it. Robin Hood's purpose 0:02:35.880 --> 0:02:40.120 is to democratize finance for all. They say. Their aim 0:02:40.200 --> 0:02:45.240 is to make investing friendly, approachable, and understandable for newcomers 0:02:45.320 --> 0:02:50.240 and experts alike. Employing a business model called payment for 0:02:50.480 --> 0:02:54.320 order flow, robin Hood makes investing free to users and 0:02:54.520 --> 0:02:57.560 just as easy as downloading a game onto your phone. 0:02:58.760 --> 0:03:02.120 And the app doesn't just provide access to the traditional markets. 0:03:02.600 --> 0:03:06.400 In June, robin Hood leveled up to include commission free 0:03:06.440 --> 0:03:11.600 crypto trading, making bitcoin, ethereum, and other tokens available to 0:03:11.720 --> 0:03:17.120 just about anybody. However, as popularity and download numbers grew, 0:03:17.680 --> 0:03:22.600 so did criticism. Massachusetts regulators are accusing robin Hood of 0:03:22.639 --> 0:03:27.560 what they call aggressive tactics in marketing inexperienced investors, using 0:03:27.560 --> 0:03:31.960 gamification to manipulate those customers and failure to prevent outages 0:03:32.320 --> 0:03:35.680 on that trading platform this year. In one example, robin 0:03:35.760 --> 0:03:39.119 had allowed a Massachusetts user with no experience to make 0:03:39.160 --> 0:03:43.040 more than twelve thousand trades in just six months and 0:03:43.080 --> 0:03:46.760 to complaint this morning. The state highlights robin Hood's revenue 0:03:46.760 --> 0:03:50.440 model of payment for order flow. This is a key point. 0:03:51.160 --> 0:03:54.160 Payment for order flow is how robin hood makes money. 0:03:54.360 --> 0:03:58.640 Even though the app itself is free to users. Individual 0:03:58.680 --> 0:04:01.960 investors don't have to pay to trade because big trading 0:04:02.000 --> 0:04:05.920 houses called market makers give robin Hood a small amount 0:04:05.920 --> 0:04:08.800 of money for every single trade that's made on the app. 0:04:09.360 --> 0:04:13.480 The more you trade, the more money they make. That's 0:04:13.520 --> 0:04:18.240 the misalignment that drives the entire conundrum here. Robin Hood 0:04:18.360 --> 0:04:21.560 wants people to trade. It's absolutely in the worst interests 0:04:21.920 --> 0:04:25.200 of clients. The more you trade, the more likely you 0:04:25.240 --> 0:04:29.160 are to lose money. Study after study has shown that 0:04:29.360 --> 0:04:33.440 buy and hold is a much better investment strategy, and 0:04:33.520 --> 0:04:37.320 critics and lawmakers raised the red flag, saying robin Hood 0:04:37.440 --> 0:04:40.320 was designed more like a game in order to hook 0:04:40.440 --> 0:04:46.720 first time investors and then capitalize on their inexperience. Regulators 0:04:46.760 --> 0:04:49.960 also point to incentives like confetti popping up on screens 0:04:50.000 --> 0:04:53.120 after trades and offers for robin Hood customers who are 0:04:53.160 --> 0:04:55.800 more active on that app to move up on waitlists 0:04:55.800 --> 0:05:00.000 for new products. In an attempt to quell the backlash, 0:05:00.080 --> 0:05:03.760 robin Hood actually changed some of their graphics, but critics 0:05:03.880 --> 0:05:09.040 were unimpressed. It's absolutely gamification. They have leaderboards, you can 0:05:09.040 --> 0:05:12.760 win points, they have competitions on on on the site. 0:05:13.160 --> 0:05:15.159 The only thing that they've removed is that you don't 0:05:15.160 --> 0:05:18.320 get confetti now on your screen when your stock goes up. 0:05:18.520 --> 0:05:20.320 You know, the robin Hood's big claim to fame is 0:05:20.320 --> 0:05:23.960 that they've democratized access to finance, But I think they've 0:05:24.000 --> 0:05:28.039 democratized it the same way that Purdue democratized access to oxycontent. 0:05:28.400 --> 0:05:31.320 Simply making something easier to buy does not mean that 0:05:31.360 --> 0:05:33.160 it is there for a good idea to buy it. 0:05:35.360 --> 0:05:38.880 But robin Hood continued to allow anyone the freedom to 0:05:38.920 --> 0:05:43.520 buy whatever stock they pleased until the game stopped fiasco 0:05:43.760 --> 0:05:47.520 in early because being sort of built by the people 0:05:47.520 --> 0:05:50.040 who are doing it as a David versus Goliath thing, Right, 0:05:50.080 --> 0:05:52.240 So you have this army of small traders who are 0:05:52.360 --> 0:05:55.680 using a Reddit message board called Wall Street Bets, and 0:05:55.720 --> 0:05:58.719 they're putting pressure on the short sellers of game step. 0:05:59.200 --> 0:06:02.080 This looks like a move by an outfit called robin Hood, 0:06:02.120 --> 0:06:03.760 which is supposed to be taken from the rich and 0:06:03.800 --> 0:06:07.560 giving to the poor, and doing exactly the opposite. The 0:06:07.640 --> 0:06:10.160 action is so wild that t d amritraded robin Hood 0:06:10.160 --> 0:06:13.479 have restricted trading of these stocks. Traders on Rabbits sent 0:06:13.600 --> 0:06:16.919 the stock soaring this week, causing billions in losses for 0:06:16.960 --> 0:06:20.599 the hedge funds that been against the video game retailer stock, 0:06:20.960 --> 0:06:28.640 and today Wall Street decided enough wasn't enough. Declaring certain 0:06:28.680 --> 0:06:35.719 stocks off limits made the platform look ominously undemocratic, and 0:06:35.839 --> 0:06:42.240 while the app makes complex transactions frictionless, understanding those transactions 0:06:42.240 --> 0:06:46.480 can be really hard, especially for beginners. This lack of 0:06:46.560 --> 0:06:54.960 clarity can have terrible consequences. The most tragic of these 0:06:54.960 --> 0:06:58.920 occurred in twenty twenty when Alex Kerns, a college student 0:06:58.960 --> 0:07:03.000 from Illinois interested in investing, was granted approval by robin 0:07:03.000 --> 0:07:07.039 Hood to trade options, a very risky thing for even 0:07:07.120 --> 0:07:11.880 professional investors because of the interface. He mistakenly thought he 0:07:11.920 --> 0:07:15.760 owed seven hundred and thirty thousand dollars that he didn't have, 0:07:16.440 --> 0:07:19.960 and he wound up taking his own life. The note 0:07:20.000 --> 0:07:23.600 he left, said I had no clue what I was doing. 0:07:25.760 --> 0:07:29.600 The Financial Industry Regulatory Authority said that robin Hood had 0:07:29.720 --> 0:07:34.080 quote failed to exercise due diligence for years. When approving 0:07:34.080 --> 0:07:38.800 options trades, they find robin Hood seventy million dollars, the 0:07:38.840 --> 0:07:43.240 biggest fine in the authority's history. This and a lawsuit 0:07:43.320 --> 0:07:47.600 by Alex Kern's family were finally settled just before robin 0:07:47.640 --> 0:07:54.520 Hood went public in the summer of one. Robin Hood 0:07:54.680 --> 0:07:57.960 says their purpose is to democratize finance for all, to 0:07:58.080 --> 0:08:03.960 make investing friendly, approachable, and understandable for newcomers and experts alike. 0:08:04.680 --> 0:08:07.800 But he's making investing free through an app the same 0:08:07.800 --> 0:08:12.440 as democratization. It feels like gamifying the stock market is 0:08:12.520 --> 0:08:17.840 almost making it too easy. Researching this further, I found 0:08:18.160 --> 0:08:22.320 just the person to help me understand the intersection of gamification, investing, 0:08:22.480 --> 0:08:28.920 and gambling. So I called him up. Folks, I am 0:08:28.960 --> 0:08:33.280 excited to introduce Dr Devin Mills. Devin, thanks for being here, 0:08:33.480 --> 0:08:36.960 and uh, welcome to calling bullshit. It's great to be 0:08:37.000 --> 0:08:39.880 with you, Tie. So before we get into robin Hood, 0:08:39.960 --> 0:08:41.680 I'd love it if you could just tell us a 0:08:41.679 --> 0:08:47.920 little bit about your background. And the work that you do. Sure. Sure, so. 0:08:48.040 --> 0:08:51.920 I'm an assistant professor at Texas Tech University in the Community, 0:08:51.920 --> 0:08:55.440 Family and Addiction Sciences department. My research is on non 0:08:55.520 --> 0:09:00.080 substance use disorders, primarily video gaming and gambling, and with 0:09:00.200 --> 0:09:03.600 regards to gambling, I also look at cryptocurrency trading and 0:09:03.800 --> 0:09:06.920 risk taking behaviors in the financial markets, looking at it 0:09:06.960 --> 0:09:09.840 from the behavioral side of things, trying to understand exactly 0:09:10.360 --> 0:09:12.600 how people can become obsessed with it, how people can 0:09:12.800 --> 0:09:18.040 start to internalize more of a problematic trading pattern. M fascinating. Okay, 0:09:18.160 --> 0:09:23.280 would you take a run at defining that word for us? Gamification? Sure? 0:09:23.480 --> 0:09:25.880 I think the simplest way of defining it is to 0:09:26.160 --> 0:09:31.199 employ game design to an area that doesn't necessarily have games. 0:09:31.600 --> 0:09:35.080 You could not say that we're gamifying the NFL, for instance, 0:09:35.160 --> 0:09:38.440 the NFL football is a game that wouldn't necessarily so 0:09:38.679 --> 0:09:41.880 that wouldn't work. But gamifying learning in a way that 0:09:41.960 --> 0:09:44.240 is something that education has done. And my understanding is 0:09:44.240 --> 0:09:46.880 that's kind of the roots of gamification has been in 0:09:46.920 --> 0:09:50.320 the education domain, right and and so the point of 0:09:50.360 --> 0:09:56.719 it is to essentially make the subject matter stickier, more engaging, 0:09:57.200 --> 0:10:02.440 more uh, fun all of those things, getting someone interested 0:10:02.440 --> 0:10:06.440 in the topic area and making it more of a competition, um, 0:10:06.640 --> 0:10:09.880 giving someone an objective a quest. But there's also the 0:10:09.880 --> 0:10:12.800 gamification in terms of the rewards piece, and I think 0:10:12.800 --> 0:10:14.360 that's where a lot of the literature, a lot of 0:10:14.360 --> 0:10:17.240 the mainstream media has kind of focused more, especially as 0:10:17.280 --> 0:10:20.000 it as applies to some of these mobile applications. Is 0:10:20.040 --> 0:10:24.560 the idea of rewarding individuals for training behaviors, as applied 0:10:24.559 --> 0:10:27.320 to robin Hood in terms of badges and whatnot, kind 0:10:27.320 --> 0:10:31.240 of the Boy Scouts mentality of uh, keep on awarding 0:10:31.240 --> 0:10:34.720 individuals for their acts of service and their acts of knowledge. Yeah, 0:10:34.800 --> 0:10:36.840 let's turn to robin Hood. Would you say that the 0:10:36.920 --> 0:10:40.840 design of the robin Hood app is gamified? They used 0:10:40.880 --> 0:10:44.160 to have the confetti once you made a trade, um, 0:10:44.160 --> 0:10:46.680 whether that was selling or buying. I haven't seen a 0:10:46.679 --> 0:10:49.680 lot of rewards. It doesn't necessarily mean that individuals don't 0:10:49.720 --> 0:10:53.400 feel rewarded in some way, So confetti would be an 0:10:53.400 --> 0:11:00.480 example of a kind of gamified aspect of the app experience. Yeah, 0:11:00.640 --> 0:11:03.840 but I would also I think the the idea that 0:11:03.840 --> 0:11:07.360 that's the only way in which humans interpret a reward 0:11:07.840 --> 0:11:10.600 is kind of a misnomer, right when their portfolio is 0:11:10.600 --> 0:11:12.719 going up a hundred dollars two hundred dollars, or maybe 0:11:12.760 --> 0:11:16.120 it's going down two dollars. I think the human brain 0:11:16.360 --> 0:11:20.520 will interpret that as something to chase, something to continue. 0:11:21.440 --> 0:11:28.040 I wonder, like our human beings all equally susceptible to gamification, 0:11:28.920 --> 0:11:33.600 or are some people more likely to be seduced than others? 0:11:34.720 --> 0:11:37.680 I would say it usually depends on the task. If 0:11:37.679 --> 0:11:40.680 you are an individual who is completely averse to any 0:11:40.800 --> 0:11:46.400 risk whatsoever, the idea that gamification by itself could get 0:11:46.480 --> 0:11:49.600 you to do something that you wouldn't otherwise do I 0:11:49.640 --> 0:11:53.080 haven't seen any research to suggest that gamification is that strong. 0:11:53.920 --> 0:11:59.240 So you're an expert in gambling and gambling addiction, Robin 0:11:59.280 --> 0:12:03.439 Hood says that investing is not gambling. Um, but I've 0:12:03.480 --> 0:12:06.720 noticed that in some of your work you point out 0:12:06.760 --> 0:12:10.280 that there seems to be a correlation between investing, particularly 0:12:10.320 --> 0:12:15.840 investing through a smartphone, and risk taking behavior. So I 0:12:15.880 --> 0:12:20.640 wonder if you could unpack the relationship between gambling and investing. 0:12:20.679 --> 0:12:23.480 How are they different and how might they be the same. 0:12:24.720 --> 0:12:28.480 When we think about gambling, we immediately assign a level 0:12:28.520 --> 0:12:31.960 of risk. When we think about investing, we imply almost 0:12:32.040 --> 0:12:37.640 a strong chance of return, almost eclipsing this idea of risk. Yeah, 0:12:37.679 --> 0:12:41.040 it sounds responsible. I'm an investor or. Yeah. You have 0:12:41.080 --> 0:12:43.199 your friends saying well, that's a gamble versus well, that's 0:12:43.200 --> 0:12:46.120 an investment. You know, that has different ways in which 0:12:46.160 --> 0:12:49.520 we interpret that, But I I go back to the 0:12:49.559 --> 0:12:54.640 basic definition. Gambling is risking something of value, primarily money, 0:12:54.800 --> 0:12:59.200 on the chance of an outcome. Uh that should result 0:12:59.240 --> 0:13:03.880 in individuals earning more money in return. That's gambling. And 0:13:03.920 --> 0:13:07.280 so based on that definition, I find it really hard 0:13:07.760 --> 0:13:11.400 to see stock trading, crypto trading in particular, to not 0:13:11.480 --> 0:13:15.040 be some element of gambling. Now that being said, I 0:13:15.080 --> 0:13:17.199 do encourage people to take charge of their wealth. I 0:13:17.280 --> 0:13:19.760 encourage people to learn more about the stock market, but 0:13:20.040 --> 0:13:22.800 I also think there needs to be uh, some clarification 0:13:22.920 --> 0:13:26.360 on the terminology. In my mind, if you're buying stocks, 0:13:26.400 --> 0:13:29.800 you are gambling, but you're maybe gambling more responsibly or 0:13:29.880 --> 0:13:33.160 less responsibly, and that's a variation of investing. One of 0:13:33.200 --> 0:13:36.480 the other aspects of the app is that it makes 0:13:36.520 --> 0:13:41.360 investing social. Does that make the app stickier? So I 0:13:41.360 --> 0:13:44.400 would I would go back to our gamification question. Do 0:13:44.480 --> 0:13:48.000 they have to have a gamification piece if so many 0:13:48.040 --> 0:13:52.040 people are going to be bragging about it, sharing their gains, 0:13:52.040 --> 0:13:54.640 sharing their losses on Wall street bets. If there's a 0:13:54.679 --> 0:13:58.199 strong enough social community, does it have to have rewards 0:13:58.200 --> 0:14:01.280 in order to increase participation? I think right now the 0:14:01.360 --> 0:14:04.480 research isn't there yet, but generally speaking, when we look 0:14:04.480 --> 0:14:07.440 at motivation in other areas, we see that the social 0:14:07.440 --> 0:14:11.160 component is very very strong. Right. It seems to me 0:14:11.280 --> 0:14:16.240 that people who who enjoy the feeling of risk, uh, 0:14:16.440 --> 0:14:19.200 would be more likely to become addicted by gambling. Is 0:14:19.240 --> 0:14:25.480 that doesn't right? Definitely? Yeah. You have to be interested 0:14:25.520 --> 0:14:28.240 with uncertainty, you have to be okay with that, you 0:14:28.280 --> 0:14:30.960 have to enjoy the rush. There's a little bit of 0:14:31.000 --> 0:14:34.080 research on the fear of missing out. That idea as 0:14:34.080 --> 0:14:37.120 well is quite prevalent. We've started to play with this 0:14:37.200 --> 0:14:39.760 concept of individuals feeling like they're missing out on the 0:14:39.800 --> 0:14:42.960 rewards that other people are experiencing, and that seems to 0:14:43.000 --> 0:14:47.000 be contributing also to individuals taking greater and greater risks 0:14:47.080 --> 0:14:51.120 and trading more problematically than they otherwise would. And so 0:14:51.200 --> 0:14:53.480 that would be you know, again, the sort of social 0:14:53.520 --> 0:14:56.080 aspect of it. You have you're doing it in public, 0:14:56.440 --> 0:14:59.600 and you're watching other people presumably either make or not 0:14:59.720 --> 0:15:02.200 make money, and and you kind of are judging your 0:15:02.240 --> 0:15:07.880 own um success or failure against that of others. Like 0:15:07.920 --> 0:15:11.280 that's got to have an effect on on the stickiness 0:15:11.440 --> 0:15:14.320 of the platform for certain people. Definitely. Yeah, And this 0:15:14.360 --> 0:15:15.920 is something I'm just thinking about in the midst of 0:15:15.920 --> 0:15:19.280 our conversation. Is the idea that is this social piece 0:15:19.320 --> 0:15:23.280 adding to individuals experience of FOMO. So it's amplifying their 0:15:23.320 --> 0:15:26.760 FOMO and that's what's contributing to their greater risk taking 0:15:26.840 --> 0:15:29.800 on the app um. So there there's definitely a role. 0:15:29.840 --> 0:15:32.440 There's definitely a cycle that I can I can see 0:15:32.440 --> 0:15:35.960 from a theoretical perspective. Um, and I'm not exactly sure 0:15:36.000 --> 0:15:39.920 what breaks that cycle. Yeah, And robin Hood says, so 0:15:40.040 --> 0:15:42.800 I'm just gonna quote there from their purpose. They say 0:15:42.840 --> 0:15:47.880 their purposes to democratize finance for all. We believe that 0:15:47.960 --> 0:15:50.840 everyone should have access to the financial markets. So we've 0:15:50.840 --> 0:15:55.320 built robin Hood from the ground up to make investing friendly, approachable, 0:15:55.400 --> 0:16:00.640 and understandable for newcomers and experts alike. And if you 0:16:00.680 --> 0:16:03.120 have a great purpose, and we think robin Hood's purpose 0:16:03.240 --> 0:16:06.520 sounds great, is you have to actually do it right. 0:16:06.560 --> 0:16:09.200 And one of the actions that they could take is 0:16:09.240 --> 0:16:12.320 do a better job of educating people. Are there other 0:16:12.520 --> 0:16:15.560 things that you think robin Hood could or should do 0:16:15.760 --> 0:16:20.800 to make the app align better with their purpose and 0:16:20.800 --> 0:16:25.480 and not be as potentially dangerous. I do. I think 0:16:25.520 --> 0:16:28.680 there's ways in which to have a cool off period 0:16:29.120 --> 0:16:32.640 if someone is trading quite erratically. Uh. Robin Hood has 0:16:32.880 --> 0:16:35.160 and just like any other brokerage out there, has access 0:16:35.200 --> 0:16:38.840 to a ton of data on their interesting and how 0:16:38.880 --> 0:16:41.240 they trade. And this has been something that actually I'm 0:16:41.240 --> 0:16:44.000 borrowing from the gambling literature. Right now, we have quite 0:16:44.000 --> 0:16:48.840 a few tech companies developing applications that can track how 0:16:48.840 --> 0:16:51.720 individuals are gambling, how many bets they're making per minute, 0:16:51.920 --> 0:16:54.720 are they escalating, are they acting in a very erratic way. 0:16:54.880 --> 0:16:57.440 Robin Hood has to be acting in good faith with 0:16:57.480 --> 0:17:02.520 regards to protecting its consumer versus protecting its business um 0:17:02.560 --> 0:17:04.720 and so that needs to be uh, something that needs 0:17:04.720 --> 0:17:08.000 to be drawn out. Binance actually supposedly I don't have 0:17:08.000 --> 0:17:10.520 a Binance account, but they have on their website a 0:17:10.600 --> 0:17:13.520 responsible trading platform, and they do have some of these 0:17:13.560 --> 0:17:16.600 pop ups that say, you know, we're seeing that you're 0:17:16.640 --> 0:17:20.320 elevating your risk, you're increasing your risk position. Uh, you're 0:17:20.359 --> 0:17:22.400 trading quite a radically, you're buying quite a bit. Maybe 0:17:22.400 --> 0:17:24.959 it's time to chill out, basically, to take a break. Uh. 0:17:25.080 --> 0:17:28.679 They do actually put holds on people's accounts. Uh, definitely, 0:17:28.680 --> 0:17:32.680 based upon whether or not they're over there, over extended exactly. 0:17:32.720 --> 0:17:35.640 And finance is a crypto platform, So let's talk about 0:17:35.680 --> 0:17:39.359 crypto because you can buy crypto now on the robin 0:17:39.400 --> 0:17:42.560 Hood app as well. Do you see investing in crypto 0:17:42.600 --> 0:17:45.560 as more similar to gambling than traditional investing since the 0:17:45.640 --> 0:17:49.159 value of cryptocurrency is in most cases based more on 0:17:49.400 --> 0:17:55.359 faith than on any kind of hard asset. Crypto does 0:17:55.440 --> 0:17:59.360 not have a fundamental asset. There's a lot of belief. 0:18:00.000 --> 0:18:05.000 The short answer is cryptocurrency trading is gambling. Is gambling? Right, Yeah, 0:18:05.040 --> 0:18:08.600 Just again, in the spirit of fairness, UM, we should 0:18:08.640 --> 0:18:11.320 point out that and I think you mentioned this earlier on, 0:18:11.359 --> 0:18:13.200 but I just want to make sure we get this 0:18:13.320 --> 0:18:15.480 on the record that to be fair to robin Hood, 0:18:15.480 --> 0:18:19.080 they have responded in at least one tangible way to 0:18:19.160 --> 0:18:22.440 the accusations that they are gamified. You know, before the 0:18:22.600 --> 0:18:26.199 I P O one, they replaced the confetti with some 0:18:26.280 --> 0:18:29.400 kind of new animation, and what they said about it 0:18:29.480 --> 0:18:32.240 was the confetti distracted from the goal of the app, 0:18:32.359 --> 0:18:35.720 which is to make regular people, everyday folks who have 0:18:35.840 --> 0:18:38.000 been kept out of the market feel like they can 0:18:38.040 --> 0:18:41.439 participate and feel like they're being positively reinforced for taking 0:18:41.560 --> 0:18:47.119 steps in their financial life. So, you know, people people 0:18:47.480 --> 0:18:50.760 noticed the confetti, people didn't like the confetti. They have 0:18:50.800 --> 0:18:55.200 addressed the confetti. How meaningful a change would you say 0:18:55.240 --> 0:18:59.160 that is you feel like that's enough? I would say 0:18:59.200 --> 0:19:04.600 that it is start to better serving their consumer, recognizing 0:19:04.720 --> 0:19:08.080 that it wasn't in the mission. It wasn't actually increasing 0:19:08.160 --> 0:19:11.840 or the democrazation. It was adding more maybe fun to it. 0:19:11.880 --> 0:19:14.280 I don't know how many people really cared about the confetti, 0:19:14.800 --> 0:19:18.040 um right, and so it hasn't changed much. I think 0:19:18.040 --> 0:19:22.680 when I'm looking at their statement to democratize finance for all, 0:19:23.040 --> 0:19:26.320 I would love if they also not just democratize it, 0:19:26.560 --> 0:19:29.800 but increase knowledge. Yes, And I think once you go 0:19:29.880 --> 0:19:32.760 down that road, you're starting to really protect consumers and 0:19:32.760 --> 0:19:37.040 you're starting to increase and democratize finance for everybody totally. 0:19:37.160 --> 0:19:39.840 And you made the point about the gamification of education. 0:19:39.920 --> 0:19:42.680 You could gamify that aspect of the app and make 0:19:42.720 --> 0:19:47.879 it so essentially to unlock different layers of features, you 0:19:47.960 --> 0:19:52.159 had to demonstrate certain levels of of knowledge. Right, essentially 0:19:52.200 --> 0:19:54.520 you have to take a quiz in order to unlock 0:19:54.720 --> 0:19:59.880 the options feature or the margin feature. Um, you would 0:20:00.000 --> 0:20:03.879 you that people would work at internalizing that information, remembering it, 0:20:04.040 --> 0:20:08.119 understanding it, and applying it. And uh, I completely agree. 0:20:08.160 --> 0:20:10.600 It would actually do a much better job of helping 0:20:10.640 --> 0:20:14.280 them achieve their their stated purpose, which is, you know, 0:20:14.359 --> 0:20:16.960 to my mind, a really good one. I think that's great. 0:20:17.000 --> 0:20:19.159 And I was also just thinking you why not you know, 0:20:19.200 --> 0:20:23.160 create something like a diversification quotient that a simple trader 0:20:23.200 --> 0:20:25.440 can look and say, well, how diversified am I? Oh look, 0:20:25.440 --> 0:20:27.800 here's a number up here. What does this number mean? 0:20:28.240 --> 0:20:31.000 Or what about a risk quotation? How risky have I 0:20:31.080 --> 0:20:34.200 been trading? How risky is my is my overall portfolio? 0:20:34.600 --> 0:20:37.240 How how open am I? That's one of the reasons 0:20:37.280 --> 0:20:41.600 why people join these brokerages is ordered to gain access 0:20:41.640 --> 0:20:45.320 to some of this information. And to your point, they've 0:20:45.320 --> 0:20:48.240 got tons of data. They have tons of data about 0:20:48.440 --> 0:20:53.120 people like you, and if it were an anonymised, right, 0:20:53.200 --> 0:20:56.400 they would they would know when you're showing signs of 0:20:56.400 --> 0:21:01.560 getting yourself in trouble and they should flag that to you. Um. Yeah, 0:21:01.560 --> 0:21:03.680 So it seems like there's much more that they could 0:21:03.720 --> 0:21:08.119 be doing as I as I really think about it, Um, Devin, 0:21:08.600 --> 0:21:10.199 we have a tool on the show we call the 0:21:10.320 --> 0:21:13.160 BS score, and what we're trying to do is measure 0:21:13.200 --> 0:21:17.159 the gap between word. Indeed, our scale goes from zero 0:21:17.280 --> 0:21:21.159 to one hundred, zero being the best, zero bs on 0:21:21.720 --> 0:21:25.840 being the worst. Total BS. So robin Hood says their 0:21:25.880 --> 0:21:30.200 purpose is to democratize finance for all and that they 0:21:30.280 --> 0:21:34.240 believe that everyone should have access to the finale financial markets. 0:21:34.320 --> 0:21:37.080 So they've built robin Hood from the ground up to 0:21:37.160 --> 0:21:42.240 make investing friendly, approachable, and understandable for newcomers and experts alike. 0:21:42.960 --> 0:21:46.920 What score would you give them? Um, I'm gonna give 0:21:46.920 --> 0:21:50.680 it a fifty five out of possible one. I look 0:21:50.720 --> 0:21:54.040 at their mission statement and I see that the democratization 0:21:54.400 --> 0:21:58.280 it really has nothing in their about necessarily keeping people 0:21:58.320 --> 0:22:01.520 safe from harm or educating people, trying to just make 0:22:01.560 --> 0:22:05.000 sure it's accessible, uh, and democratizing making sure everyone has 0:22:05.040 --> 0:22:08.080 access to these markets. It seems like that's something that 0:22:08.160 --> 0:22:13.200 robin Hood has accomplished, but that's not necessarily without some consequences. 0:22:13.240 --> 0:22:15.920 I want more from robin Hood. I think robin Hood 0:22:16.119 --> 0:22:20.200 could be a great company that really doesn't just open 0:22:20.280 --> 0:22:23.560 the doors, but also sits people down and says, here's 0:22:23.560 --> 0:22:25.879 how you can do this more effectively, here's how we 0:22:25.960 --> 0:22:29.920 can make you more effective in your trading. It's something 0:22:30.000 --> 0:22:32.960 that I think robin Hood could actually achieve um and 0:22:33.000 --> 0:22:38.040 be really fire its namesaked, really trying to build people up. 0:22:38.240 --> 0:22:41.240 So that's where I see it as it stands right now. Yeah, 0:22:41.280 --> 0:22:43.640 I love the thoughtfulness of that score. And I want 0:22:43.640 --> 0:22:45.879 to thank you for being being on the show and 0:22:45.920 --> 0:22:48.760 taking the time today. Thank you very much, Hi, It's 0:22:48.760 --> 0:22:56.440 been great, So to be fair. Gamification doesn't take away 0:22:56.440 --> 0:22:59.840 a person's free will or absolve them of responsibility for 0:23:00.080 --> 0:23:04.439 or decisions. But robin Hood still turns the stock market 0:23:04.560 --> 0:23:08.400 into a dangerous game, and given their business model, they 0:23:08.400 --> 0:23:11.600 don't have any incentive to change. The more I learned, 0:23:11.880 --> 0:23:14.280 the more concerned I am about the harm that robin 0:23:14.320 --> 0:23:17.840 Hood can do. But we're not here to just curse 0:23:17.880 --> 0:23:20.879 the darkness. It's important to light a few candles as well, 0:23:21.320 --> 0:23:24.160 so we'll get into some ideas to fix robin Hood 0:23:24.600 --> 0:23:36.440 right after the break, Folks, it is time to talk 0:23:36.480 --> 0:23:39.639 about actions that robin Hood could take to better do 0:23:39.880 --> 0:23:44.320 their purpose of democratizing finance for all joining me today, 0:23:44.359 --> 0:23:49.560 we have two extremely qualified experts. First up, I'm really 0:23:49.560 --> 0:23:53.160 excited to introduce Hailey Sacks. Hailey, thanks for joining us 0:23:53.200 --> 0:23:57.040 and welcome to calling bullshit. Thank you so much for 0:23:57.080 --> 0:24:01.560 having me. I'm excited to call bullshit and Haley for 0:24:01.600 --> 0:24:03.399 the listeners. Could you tell us a little bit about 0:24:03.400 --> 0:24:08.720 your background. Yes, So, I'm Haley, otherwise known as Mrs 0:24:08.760 --> 0:24:13.840 dow Jones, and I was the first financial influencer fantastic, 0:24:14.040 --> 0:24:18.400 and I want to introduce Charles road Blood. Charles, thank 0:24:18.440 --> 0:24:20.440 you for joining us today and tell us a little 0:24:20.440 --> 0:24:23.879 bit about your background as well. Sure, I'm a chartered 0:24:23.960 --> 0:24:27.480 financial analyst. I work with the American Association of Individual 0:24:27.480 --> 0:24:32.080 Investors AI and among the things I've created there as 0:24:32.119 --> 0:24:35.400 our prison wealth blooding processes is really about taking your 0:24:35.440 --> 0:24:39.159 goals and having those drive all of your savings and 0:24:39.240 --> 0:24:45.000 investing decisions. Okay, so let's jump right into some ideas. Charles, 0:24:45.040 --> 0:24:47.200 I'm gonna ask you to go first. In two months, 0:24:47.320 --> 0:24:50.159 or less. What's the one thing that you would change 0:24:50.160 --> 0:24:54.359 about robin Hood to better do their story? Well, I 0:24:54.359 --> 0:24:57.280 think they need to focus on long term investing, and 0:24:57.320 --> 0:25:00.320 given that they're an app based broker um, I think 0:25:00.359 --> 0:25:03.280 it'd be great if they could actually gamify the process 0:25:03.359 --> 0:25:06.600 of long term investing, give points or give rewards to 0:25:06.680 --> 0:25:09.960 people who set up automatic deposits, to people who pick 0:25:09.960 --> 0:25:12.359 an allocation and stick with it. And there's things they 0:25:12.359 --> 0:25:15.760 can do like great leaderboards. Uh, this person's increased their 0:25:15.760 --> 0:25:19.720 automatic contribution, this person has gone x days without looking 0:25:19.720 --> 0:25:22.960 at their portfolio balance, a little things like that which 0:25:23.000 --> 0:25:26.400 would really encourage people to think about investing for long 0:25:26.520 --> 0:25:29.320 term and most importantly gets them in the habit of 0:25:29.520 --> 0:25:33.600 not being reactive and not constantly wanting to trade and 0:25:33.680 --> 0:25:37.760 turn over their portfolios. Hmm. I think that's a really 0:25:37.800 --> 0:25:40.159 interesting idea. Haley, what do you think about that idea? 0:25:41.040 --> 0:25:45.960 I'm like enthusiastically nodding. You guys can't see because the podcast, 0:25:46.040 --> 0:25:50.680 but that's pretty much my dream app. Yeah. I guess 0:25:50.680 --> 0:25:54.840 the only question I have about that is is sort 0:25:54.880 --> 0:25:58.800 of um business model? Right? Because right now they make 0:25:58.880 --> 0:26:01.639 money using some and called payment for order flow, So 0:26:01.720 --> 0:26:04.639 the more you trade, the more money they make. Essentially, 0:26:05.200 --> 0:26:08.720 it would definitely be a seismic shift about the revenues 0:26:08.840 --> 0:26:11.000 come from payment for order flow and most of that 0:26:11.119 --> 0:26:16.000