“Democratizing” day trading is just putting undereducated and underinformed victims in front of professionals with orders of magnitude more access to research, information, and market access. I said it elsewhere but this would be like praising Harrah’s for removing the rake (the casino’s cut) from poker games and encouraging novices to put their money down on the table with Vegas professionals. People would be mortified, but that’s astonishingly close to what’s happening here. Nobody would think this is a good idea, despite the existence of wealthy and successful poker players.

We don’t give Robinhood crap because it’s “not sophisticated enough”. We do so because they have removed the guard rails, encouraged the some of the riskiest possible behavior (with a particularly poor risk:reward ratio), abrogated any responsibility of steering their users toward financial literacy or sound investing practices, and done all of this toward one of the most vulnerable classes of market participants.

Day trading is not investing. It is to investing as predicting the weather is to predicting the climate. Getting masses of lay people “comfortable” with day trading is—frankly—unmitigated evil. It is a means by which the rich will get richer and the poor will have their money fleeced. The only reason this hasn’t unfolded in complete disaster yet is the absolutely unprecedented bull market we’ve been in. It will end—nobody knows when—but when it does, Robinhood’s customers will be amongst the worst off.

We know this because repeated evidence has proven conclusively that one’s market returns are (on average) inversely proportional to the number of trades one makes. Buying and selling in the short-term maximizes the asymmetry between you and better-informed market participants. Buy-and-hold minimizes this, but that’s not even remotely what Robinhood promotes. Vanguard on the other hand actually did democratize long-term buy and hold investing, which is what we should be steering lay people towards.