Finimize - 😭 Robinhood misses GameStop

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Today's big stories

Robinhood reported worse-than-expected results as it falls further from its Reddit-fueled high
One investing legend thinks you’re making a big mistake if you’re buying low and selling high – Read Now
Chevron’s results were impressive, but they still let down demanding investors

Retirement Plan

What’s Going On Here?

Robinhood reported worse-than-expected results late last week, so the trading app might be hoping a new retirement product will help wind the clock back to its glory days.

What Does This Mean?

Robinhood boasted nearly 23 million accounts at the end of last quarter, but that doesn't mean much if they're not being used. In fact, the platform’s monthly active users fell by 1.6 million last quarter from the quarter before – a far cry from the nearly 1 million rise analysts were expecting. Even revenue from all-important crypto trades – a big driver of growth in the first half of last year – was down 6%, slipping for the second-straight quarter. Overall, then, the company posted a bigger-than-expected loss of $423 million. Robinhood isn’t buzzing about this quarter either: it’s expecting a worse-than-expected 35% drop in revenue compared to the same time in 2021 (tweet this).

Why Should I Care?

For markets: Retire with Robinhood.
Investors sent Robinhood’s shares down 15% after the news, meaning they’re now down nearly 90% from their August high. So the company’s trying whatever it can to turn things around: it’s been working on retirement accounts and other new features to bring in long-term investors and savers. And since it seems to think more crypto could draw the high-frequency crowds in, Robinhood also announced plans to add more coins, open its platform up to international users, and roll out its own crypto wallets to everyone.

The bigger picture: Derivative is good.
The drop-off in crypto trades might have something to do with the ever-stiffening competition from the likes of FTX US, which announced last week that it’s raised $400 million in investment. That puts its value at $8 billion, and makes it one of the world’s most valuable private crypto firms. FTX plans to use that cash to push into derivatives, which make up over half of all crypto trades. No wonder rival Coinbase wants a piece of the action too: the crypto exchange agreed to buy derivatives exchange FairX earlier this month.

You might also like: How to make your crypto work harder for you this year.

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Analyst Take

Buying Low, Selling High? You’re Doing It Wrong

Carl Hazeley, Analyst

What’s Going On Here?

Oaktree Capital’s Howard Marks is a renowned name in investing circles, so his memos always get investors talking.

But the latest one’s sparked even more debate than normal: Marks argues that the old investing adage “buy low, sell high” has a major problem that’ll rob you of long-term returns.

He thinks you shouldn’t sell at all.

Marks says there are only two reasons you’d sell a stock: if the company’s fundamentals aren’t playing out as you’d hoped, or if there’s a better investment opportunity out there.

The first one might make sense, he argues, but the latter is a fool’s errand.

And he’s not keen on rebalancing either, for the record.

So that’s today’s Insight: why Howard Marks is so set against selling stocks, and where that leaves you.

Read or listen to the Insight here

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