John Macintosh

Love to travel, read and watch life go by. My biggest passion is investing to find my travel, books and life.

[John Macintosh @homymac]

@SarwagyaT 1

[MLB @MLB]

A one-of-a-kind giveaway for a one-of-a-kind player!

Repost and reply for a chance to win this Shohei Ohtani-inspired stuffed unicorn 🦄

[De Christian Life @DeChristianLife]

Dear wives, note this about your husbands

[Tsla Chan @Tslachan]

I think I found something. Please let me know your opinion

[John Macintosh @homymac]

@HolySmokas I'm down -$40k from Nov 7th.

[John Macintosh @homymac]

@Kross_Roads Thank you Roy! Enjoy watching you and the other guys on YouTube.

[Elon Musk @elonmusk]

@stevenmarkryan 😂

[John Macintosh @homymac]

@womenoptionswin Passive

[John Macintosh @homymac]

@womenoptionswi Passive

[John Macintosh @homymac]

@optionscjp Three things: Work Hard, Save and Invest (Real Estate + Stocks) = $2 Million US

[Adam Goldstein @adamgoldstein13]

Had an inspiring conversation this morning with @PalantirTech CEO, Dr. Alex Karp, and our Head of Product @AdamWarmoth at their D.C. headquarters. We're partnering with Palantir to make flying cars a reality, leveraging our data expertise in engineering, manufacturing, and operations. More to come soon...

[Sachin Sharma 🇮🇳 @sachinvats]

Congratulations everyone long in $SOFI

[amit @amitisinvesting]

$HOOD

BREAKING: LEGACY PLATFORMS LIKE CHARLES SCHWAB ARE NOW OFFERING CERTAIN CLIENTS 1% TO NOT TRANSFER THEIR PORTFOLIOS TO ROBINHOOD.

Oh boy...it's happening.

Two sources confirmed to me today that they tried to transfer their accounts from Schwab (today was the last day to take advantage of the Robinhood 1% match for ACATs transfers) and Schwab personally called them and offered them 1% to stay.

They also gave them better terms then Robinhood: 12 months of keeping the money on platform to get access to the match vs. Robinhood's 24 months. I don't have the account size of one of the sources, but the other source specified a $500K account.

Alright, so let's analyze the bull/bear case here for Robinhood...

Let's do the quick bear case, which as I've been thinking about, really isn't that bearish, but you can make a bear argument:

Bear Case: Robinhood's differentiation was offering the 1% match, if other brokers start matching it, then they may not end up having as many deposit transfers as they had in the past. This could potentially lower overall net deposits, revenue growth, etc.

I'll respond to this in my bull case, but yes, this is a bear argument for why this could be bad. One thing to remember, these are only two sources that confirmed it to me. Schwab has not rolled out some 1% unlimited deposit match, so they are likely being very selective with who to give this match to.

Until we see a full scale roll out, it's hard to say they are copying Robinhood here.

Bull Case: Alright, this is just an incredible development if you've been following the Robinhood story all year.

$500K to Schwab, which has $9 TRILLION in assets, shouldn't be a ton of money that they are afraid of leaving...but as of today...they are.

Why are they afraid? I think it's because their reps are getting sick and tired of having to approve all these ACAT transfers and see precious assets leave the platform and go to Robinhood.

At some point, you have to stop the bleeding. For $HOOD investors, given this is the FIRST time I have heard all year about Schwab doing this, it means that Q2 deposits likely have done very well.

If Schwab is scared of $500k leaving, and they are willing to give 1% and better terms to stay, then that means Q2 ACAT transfers could be massive. We only know publicly that Robinhood got $8.5B in deposits this quarter. They got $11.2B in Q1.

June deposit numbers will decide the overall Q2 growth in deposits, and if Schwab is finally starting to offer a 1% match selectively, it might be because June was one of the largest months where they saw transfers to Robinhood.

So, here's the real question: Can Schwab compete?

I got multiple reasons from people for why they left to go to Robinhood: 3% IRA Match, Gold Credit Card, 1% Deposit Match, Much better UI/UX, etc.

However, the reason I think Schwab really felt the pain this month, and another reason which is the hardest part for legacy platforms to compete on...

Industry lowest margin rates.

Schwab charges 14% for margin. $HOOD now charges 6.75%. One of the BIGGEST decisions the company made in May was to lower their margin rates for everyone, not just gold subscribers, because they knew big accounts would come over to the platform to take advantage of the margin rates. It was a genius move to lure over wealthier clients that really benefit from margin.

As a result, margin balances went from $4.1B to $4.5B...in 10 days.

I think this is where Schwab really started getting scared. Clients probably told them that they had no choice but to leave for Robinhood because that type of savings on margin could results in literally millions of dollars for large-size accounts. Then when you factor on the 1% match (if you have $1M, you get $10K, which is just a ton of money for people to ignore), you start to see many more people decide that they want to leave.

So, the reason this news is MASSIVELY bullish to me is because if Schwab really wanted to compete, they'd have to do a 1% match for everyone. Schwab has $9T in assets. If they do a 1% match, they'd have to pay $90B to retain all those assets. That's just not happening.

They'd also have to lower margin rates to 6%. They can't do that. This is a public company. They don't have the unit economics to just give a 1% match or 6% margin rates to their millions of clients overnight. Their ENTIRE business model would be turned upside down and it would affect their earnings.

They can try to offer a % match to individual and select clients, but then...

What happens when people read this post and they start asking Schwab about their 1% match? You can't hide that you are only giving 1% to some clients...if anything, people will get more pissed off and just leave because they feel the brokerage doesn't value their business.

Robinhood innovated on their business and unit economics to give out a 1% match across the board, universally, to any person -- whether you have $5 or $5M. That is the reason they are winning so much this year. It's honestly just incredible to see how they've done it, and it looks like deposit transfers have become so strong that the legacy platforms finally are feeling the pain...the same way they felt the pain when $HOOD made trading commission free.

That boy Vlad isn't messing around this year.

LFG.

[John Macintosh @homymac]

CNN all agreed Biden lost. Wow!

[stock goat @kylewhitegoat]

$SOFI 🚨 Breaking News 🚨

SOFI hits new (26 month high) in institutional ownership at 43.45%

[John Macintosh @homymac]

@SelfMadeMastery Me too. Down almost 70%

[John Macintosh @homymac]

@SelfMadeMastery Please don’t watch it. Sad.

[John Macintosh @homymac]

I’m so sad that we are in this place as a country. #Debates2024

[John Macintosh @homymac]

I actually feel bad for Biden. As an independent, I wish Biden didn’t mumble. #Debates2024