What we’re reading (8/14)
“Here’s How Robinhood Is Raking In Record Cash On Customer Trades — Despite Making It Free” (CNBC). Robinhood doesn’t charge customers commissions to trade (and almost no one else in the industry does anymore either as a result), but they do get paid by market makers for the right to execute customers’ trades, a practice known as “payment for order flow.” When retail trading surged this year, Robinhood started making a ton of dough.
“Justice Goes To Yale” (Wall Street Journal). “In his letter to Yale, Assistant Attorney General Eric Dreiband puts it this way: ‘Asian American and White applicants have only one-tenth to one-fourth of the likelihood of admission as African American applicants with comparable academic credentials’…he added: ‘There is no such thing as a nice form of race discrimination.’”
“The Times That Try Stock-Pickers’ Souls” (Albert Bridge Capital). A nice reminder to focus on “value.” But the basic “value” premise—that “value” is buying stocks trading below intrinsic value—is still incomplete. The real golden goose is identifying stocks most likely to outperform even if all stocks are currently trading at exactly their intrinsic value (conditional on the current information available and without insider trading, of course).
“Goldman Takes New Lack Of Standards, Pride Out For A Ride” (Dealbreaker). Historically, GS has turned up its nose at consumer finance. But that’s all changed under newish CEO DJ D-Sol. The latest news is that Goldman is trying to acquire GM’s credit card business.
“Michigan Plans To Redesign A Stretch Of Road For Self-Driving Cars” (CNN Business). When Motor City and its minders in Lansing are carving off huge chunks of highway space to retrofit for self-driving vehicles, that’s when you know it’s time to get on board.
