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Motley Fool Answers

The Rise of the Robinhood Trader

Motley Fool Answers

The Motley Fool

Taxes, Saving, Money, Investing, Planning, Retirement, Personalfinance, Finance, Education, Business

4.4823 Ratings

🗓️ 23 June 2020

⏱️ 36 minutes

🧾️ Download transcript

Summary

Millions of people are opening their first brokerage account and giving day trading a try on sites like Robinhood. Motley Fool Contributing Analyst Matt Frankel joins us to talk about why now, how this will likely end, and whether it’s actually a good thing.

Transcript

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0:00.0

This is Motley Full Answers. I'm Alison Southwick and I'm joined as always by Robert,

0:07.6

Go Big or Go Bro Camp. Hey Robert, how you doing? Swimmingly, Alison. How are you?

0:13.9

In this week's episode, we're joined by Motley Fool contributor Matt Frankel to talk about the rise

0:18.0

of the Robin Hood Trader. All that and more on this week's episode.

0:22.6

So, bro, what's up?

0:24.8

Well, on this show, Alison, I have mentioned several times probably that my favorite

0:30.1

investing book of all time is Stocks for the Long Run by Professor Jeremy Siegel, a professor

0:35.4

at the Wharton Business School. It's a great book in

0:39.5

terms of emphasizing the long-term benefit of stocks, how they outperform bonds and cash, but it's

0:45.5

also got a lot of really interesting history, history of the Fed, history of the Great Depression.

0:49.7

So, all around, great book. So I was excited to see Professor Siegel as a guest on a podcast that I

0:56.3

listen to regularly. It's the Masters in Business podcast with host Bear Rittoltz. It was interesting

1:01.8

because I think Siegel explains something that is a key difference between the Great Recession

1:07.8

of 2007-2009 and what's going on now. You may remember, of course,

1:12.7

the Fed did a lot back then in 2007-2009. We were all worried about inflation taking off

1:18.0

with all the stimulus, but it didn't happen. Siegel makes the point that all the stimulus that

1:24.1

happened in 2007-2009 went to the banks, and then the banks held on to it.

1:30.0

They didn't lend it out.

1:31.1

They kept it in reserve because they were all worried about themselves going under.

1:34.9

It didn't actually make it into people's pockets.

1:37.6

This time is different.

1:39.3

We talked about it in the last episode, how the savings rate has jumped to 33 percent and how banks have

...

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