Sometimes I wonder if the tech disruptors are actually creating value or they are just distributing the value to consumers.
Robin Hood am online app that allows people to trade for $0 started in US in 2013. Due to its growth now all major companies are switching to $0 trade commissions. The consumer benefits not a multi billion dollar industry is decimated now. These companies now need to make money in other ways by increasing rates on margin loans or other services.
Same can be said for Uber and LYFT as well. I am not sure if these business models are sustainable. This will lead to more layoffs in these industries and more automation to cut costs.
Very dangerous times to be invested in companies as any startup can disrupt the industry. It is ever more important to be invested in companies with strong economic moat with barriers to entry including low cost of operations, secular tailwinds and network effect.l or patents.
Online brokers tumble after Schwab cuts commissions to zero
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