DD Support Board and Research Team

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Prof Ben Graham discussed the economics of the stock brokerage business in his "The Intelligent Investor." Everyone thinks it's a simple business, a money machine, he said, but a glance at the brokerage failure/merger rate suggests otherwise.

When I began investing there were tons of mergers, which is how firms like Merrill Lynch, Pierce, Fenner & Smith came about. Most of the many regional firms from my early days are long gone. Every time there was a market contraction, a few firms went OOB.

I can envision RH merging out of business. Likely the fun is gone for its founders.