The Upside of Less TV
A letter about the benefits of watching less TV…
“I’ve been strictly limiting my diet of TV news and talk shows for months. It definitely helps. I’ve discovered Brit mysteries and interesting Nova episodes. While having the TV on at all exposes you to some level of spin, at least the level of brainwashing is significantly diminished, helping you remember you do have a brain to think for yourself.”
Another letter, with a similar conclusion…
“ABSOLUTELY. I stopped watching the TV news and stopped reading newspapers years ago and do not miss anything. Plus, if you are glued to the weather forecasts, which are wrong more often than right, you will alter your plans and not do the things you planned to do.”
A third reader…
“I started a media fast about 2 months ago and I can’t express how much happier I’ve been. My stress level has been super low, even with the pandemic. I think I actually lost some weight because of it. Keep up the great work!”
“The weather team on our local CBS affiliate has pretty good coverage of “weather events” in the area, so we tune in long enough during hurricanes, severe thunderstorms, and – recently – an earthquake, to see if we need to take any action.
Otherwise, with the exception of occasionally watching Tucker Carlson’s monologue on Fox News, our TV remains off. Basically, it’s become a large monitor for viewing movies, etc.”
Keep an eye on the weather forecasts, which several readers mentioned. Safety first, after all.
Apart from that, less time spent watching TV seems to be a great start to a calmer, more peaceful life.
Thanks to everyone who wrote in this week. We appreciate the responses, the ideas, and the honesty.
As always, send your thoughts here, TheRundownFeedback@SevenFigurePublishing.com.
Your Rundown for Friday, Aug. 14, 2020…
Robinhood… Consider Yourself Warned
CNBC reported yesterday trading platform Robinhood is raking in “record cash” as more and more customers flock to it because of its non-existent fees and easy to use interface.
At a glance, this may seem strange. Robinhood is free to use. There are no customer facing commissions on most trade types. So how is the company swimming in “record cash”?
Before we get to that part… let’s compare where Robinhood stacks up against the rest of the brokerage industry in 2020.
Robinhood received $180 million in payments for orders in the second quarter this year, $111 million of which came from options trades.
Charles Schwab did a total of $66 million, $33 million of which was from options trades. E-Trade raked in $110 million, $60 million from options.
Robinhood is eating everyone’s lunch right now, with the exception of goliath TD Ameritrade which took in $324 million in fees.
Question is, in an ultra-low fee or no-fee environment, where is this money coming from?
Market makers, firms that actually execute customer trades, pay the brokers a small fee for the “order flow” off the platform. This is pennies a trade, or per share, sometimes fractions of a penny.
But all those fractions add up, and middle-man brokerages like Robinhood get to promise no fees to users, and still pile up cash from the payments they collect on order flow.
What’s the problem? As you can see above, options order flow is most lucrative for brokerages.
And options on Robinhood are game-ified to the point of appearing simple, low-risk, and fun. Yes, this is an opinion of your editor.
Options used correctly are a fantastic way to use leverage to your advantage. For beginners, the impatient, or the uneducated, they can be disastrous.
Robinhood’s primary source of revenue, as you saw, is making options seem easy.
This is dangerous. Anyone who trades anything should do independent research, take your time, paper trade first, and only ever put real money on the line when you fully understand the mechanics of the trades you’re using.
That advice is not only for Robinhood users. It’s for everyone. In volatile, unpredictable markets, there is nothing more dangerous than “stocks always go up” or “this is easy” type thinking.
Checking in on the markets this morning…
Market Rundown for Friday, Aug. 14
The S&P’s off just a tick, at 3,371 as we write.
Oil’s flat at $42.25.
Gold, down $12.00 this morning, goes for $1,958.
Bitcoin, down $89, is at $11,720 in fiat terms.
Tell us what you think! You can always send your comments and questions to, TheRundownFeedback@SevenFigurePublishing.com.
Have a great weekend. We’ll be back Monday with more…
For the Rundown,