2021年7月28日 星期三

On Tech: Is Robinhood’s disruption a good thing?

The stock trading app goes public this week. Here's why the company has gotten so much attention.

Is Robinhood's disruption a good thing?

The stock trading app goes public this week. Here's why the company has gotten so much attention.

Maria Chimishkyan

Robinhood has made stock trading fun, cheap and appealing to young people who aren't rich — not the crowd that the finance industry typically caters to.

But the app also has a track record of grievous mistakes, and it may not be good for people's wallets if investing feels like a game.

Ahead of Robinhood's (highly unusual) initial public offering planned for this week, my colleague Erin Griffith spoke to me about the app's ups and downs and how the company fits in the financial technology revolution.

Shira: Let's start with you explaining to us why Robinhood is getting so much attention.

Erin: Robinhood has delivered on the Silicon Valley trope of disrupting what came before it. Many start-ups aim for this, but few have actually pulled it off. The company made stock trading as easy as playing Candy Crush. It made trades free, and it brought a lot of young people into stock investing. It forced other online brokers like Charles Schwab, Fidelity and E-Trade to change more than they had in years.

But in the same way that people are discussing the trade-offs of companies like Google and Facebook, people are also pointing out that Robinhood has created dangerous downsides.

What are those downsides?

Robinhood can feel to users more like a video game or a casino than an investment account, and that can sometimes compel inexperienced investors to take big risks, especially when doing a type of trading that involves borrowing money. The investment managers Warren Buffett and Charlie Munger recently discussed Robinhood, with Munger calling it "beneath contempt" and "a ​​sleazy, disreputable operation."

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Robinhood also makes more money when its users trade more, but a lot of research has found that such behavior doesn't generate the best investment returns. (The company's financial documents say that a "vast majority" of its customers don't fit the definition of "day traders" who do a lot of rapid-fire trades.)

Professional investors can be reckless, too, and what they do sometimes is indistinguishable from gambling. Is the criticism of Robinhood just an elitist attitude that most people can't be trusted to invest their own money?

That's what Robinhood believes, as evidenced by a defiant letter that the company's founder wrote to potential IPO investors. But people who follow the company have also asked whether Robinhood's zeal for growth and shaking up the system has led to a pattern of serious errors.

What kinds of errors?

The app has crashed at some crucial moments. It recently paid a record amount to the securities industry's self-regulatory body for that and other mistakes including not doing enough to screen out customers that weren't suited for a type of higher-risk trading.

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Last year, a young man killed himself after a misunderstanding that led him to believe that he was in the hole by more than $700,000 from Robinhood trades, and he couldn't reach the company to sort it out. A traditional broker might not have allowed that type of investment without guidance, or it might have been easier for a customer to find help.

You've written that we're in a golden age for new types of financial companies including Robinhood, the payments start-up Stripe and semi-automated financial advisers. What's going on?

Many people have wanted something other than big, traditional financial institutions, but they didn't have many good or reliable alternatives. When Simple, one of the first mobile banking companies, crashed all the time, the attitude nearly a decade ago was: This is what happens when your bank is just an app.

Fast forward a few years and now the technology building blocks for newer financial companies have become more solid, and trust in them is building among the public and regulators. It's great for people to have more choices for banking and finance, but again there are trade-offs.

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A number of these companies have struggled with repeated outages, frozen accounts, hacks and other major issues. Conventional financial institutions have many problems, but they're also not likely to lock you out of your money without recourse.

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Before we go …

  • Words fail to capture how rich these companies are. The combined profits of Apple, Microsoft and Google for three months were four times Walmart's profit for a whole year. Yeah, they're rich.
  • Kids use the internet. How do we keep them safe? Facebook's Instagram outlined new measures to keep teenagers from unwelcome interactions with adults in the app, and it won't allow advertising targeted to kids' interests or online activity, my colleague Erin Woo reported. But as the company was touting its new protection measures, The Wall Street Journal found automated Instagram recommendations of horrifying sexualized hashtags and comments about children.
  • Look, we NEED mindless TV: The HBO Max streaming video app has been glitchy, particularly on the Roku streaming gadget for TVs. Bloomberg News spoke to frustrated customers, some of whom have left 37 pages of HBO app gripes or workarounds on Roku's website. (The root cause of all this is a streaming TV business model that replicated all of the old TV habits.)

Hugs to this

You gotta watch the TikTok star James "Bear" Bailey enchanting people at a convenience store by singing the R&B song "All My Life." (Bailey regularly posts videos of himself singing in a gas station store near his home.)

We want to hear from you. Tell us what you think of this newsletter and what else you'd like us to explore. You can reach us at ontech@nytimes.com.

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‘Sex Talks’ Should Start Earlier Than You Think

Some parents feel awkward and reluctant to discuss bodies, consent and sexuality; their kids pay the price.

'Sex Talks' Should Start Earlier Than You Think

By Melinda Wenner Moyer

Loris Lora

When a friend of mine took her kids to the pediatrician's office a few weeks ago, her 7-year-old daughter noticed a birth-control poster and asked her about it. Soon after, her 4-year-old son began peppering her with sex questions too: "But Mom, why would a penis ever go into a vagina? Did Dad put his penis into your vagina?"

Needless to say, my friend will not forget this particular doctor's trip. But that conversation was not nearly as memorable as the one that transpired a few hours later at the playground, when her 4-year-old ran into a friend. Suddenly, her son yelled something to the effect of: "Did his dad put his penis in his mom before he was born, too?!"

Talking to kids about sex can be awkward and, as my friend's story illustrates, also have embarrassing consequences. Nevertheless, we need to be having these conversations with our kids, early and often. "As soon as children start talking, we should be talking to them about their bodies, and about boundaries and about consent," said Eva Goldfarb, a sex educator and professor of public health at Montclair State University in New Jersey.

Yet many parents are not having those conversations.

For their 2020 book, "Sexual Citizens," Princeton University sociologist Shamus Khan and Columbia University sociomedical scientist Jennifer Hirsch interviewed more than 150 Columbia students about the conversations they had — or shall I say, didn't have? — about sex with their parents. According to the students, discussions at home about sex were few and far between, and what little information they received usually came from their mothers rather than their fathers. When researchers surveyed U.S. adolescents as part of a study published in 2019, 63 percent of the teen boys reported that their parents had never talked with them about contraception, and 44 percent of the teen girls said the same.

Sometimes, parents talk so abstractly about sex that their kids do not understand what they're trying to communicate. "Parents are more likely to report that they talked with their adolescent about sex-ed topics than adolescents are to say that parents talked to them," said Laura Lindberg, a principal research scientist at the Guttmacher Institute, a nonprofit organization that works to advance sexual and reproductive health and rights. "We always need to be concerned about the gap between what parents think they're saying and what their kids hear."

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You can't assume that your kids will learn about sex in school, either. According to Guttmacher Institute data, 20 states do not require that sex education be taught in school at all, and of those that do, only 18 states require that the information be medically accurate. Just nine states teach students about the importance of consent. When the New York American Civil Liberties Union evaluated New York's sex education curriculum in 2012, the organization found that one school district described the penis as a "sperm gun" and the vagina as "penis fits in here."

If you're nervous about talking to your kids about sex, consider that the issue may be broader than you think — it encompasses relationships, body parts, boundaries, respect, privacy and consent. "Too often parents approach talking about sex with their kids as a one-time only, birds-and-the-bees type lecture, as opposed to an ongoing conversation throughout their child's development," Dr. Lindberg said.

A good place to start talking about sex is by using the correct anatomical names for body parts. When we use euphemisms, we send the message to our children that these parts of their bodies are shameful or taboo, and that they shouldn't come to us with questions about them. We need to have clear conversations about what to do if someone touches them in a way they don't want. You can use books or videos to introduce these topics to your kids if you're not sure how; Dr. Lindberg recommended books by Robie Harris, which are tailored to kids' ages, as well as the free videos created by the organization Amaze.org.

Parents of preteens and teens might also ensure that kids get time alone with their doctors so they can ask confidential questions, Dr. Hirsch said. A study published in July found that fewer than one-third of teens have had conversations with their doctors about sex, perhaps because they have not been given the opportunity.

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To instill an understanding of consent and body autonomy, we should also let our kids make their own decisions about who they touch (and are touched by). Avoid instructing children to give their friends hugs at the end of each play date, for example, and make sure they understand that they don't have to be embraced if they don't want to be, said Emily Rothman, a community health scientist at the Boston University School of Public Health.

It's also wise to talk to kids about pornography from a young age — even as young as kindergarten, Dr. Rothman suggested. You can frame these early discussions as being more about nakedness than about sex, though. "You can say, 'Sometimes grown-ups like to look at naked photos or movies of other grown-ups, and they do it because it's fun for them and makes them feel good, but we don't think it's that good for kids' brains,'" she said. When kids start chatting with friends over digital devices, we should also make clear that it's never a good idea to send naked pictures to others, that this is called sexting, and that it can get kids in lots of trouble.

This all said, parents shouldn't only talk about sex in a negative way, either. It's important that our kids understand that sex can be a joyful and important part of adult life, and that it's OK for them to get pleasure from their bodies. Parents might worry that framing sex in a positive way — or talking about sex at all — will make it more likely that their kids will start doing it, but the opposite is, in fact, true.

A 2015 study reported that when parents introduce their kids to the issue of sex with a stern, scare-mongering lecture, their kids are more likely to have sex during the teen years. When parents have more supportive and receptive conversations with their kids about sex, on the other hand, those kids are less likely to take sexual risks. And in a 2012 nationwide survey, 87 percent of teens said that it would be easier for them to postpone sexual activity and avoid pregnancy if they were able to have open and honest conversations with their parents about sex.

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When we talk to our kids about these important but complex issues, we share our values and our wisdom, which allows them to make better choices. And if they choose to yell out "penis!" on the playground, it's not the end of the world.

Melinda Wenner Moyer is a science journalist and the author of "How To Raise Kids Who Aren't Assholes."

Want More on Talking to Kids About Sex?

  • Anastasia Higginbotham illustrated the first sex talk for parents of little kids.
  • Carrie Melago made clear that "the sex talk" is really a series of conversations.
  • Peggy Orenstein argued that if you ignore porn, you aren't teaching sex education.
  • Shani Zoldan-Verschleiser urged parents to give their children the tools to recognize sexual abuse.
  • Shane O'Neill remembered being trapped in the car with his dad for an awkward birds-and-bees conversation.

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Tiny Victories

Parenting can be a grind. Let's celebrate the tiny victories.

I remember to bring snacks for my toddler to eat on the car ride home from day care, perfectly timed so that he is content when arriving home and not hangry for dinner right away. — Jenny Lee Northey, Kingston, Ontario

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