0:04 spk_0

Welcome to Stocks and Translation, Yahoo Finance’s video podcast that cuts through the market mayhem and noisy numbers to give you the information you need to make the right trade for your portfolio. I’m your host Ali Cannell in for Jared Blickery, and with me today is the wonderful Sydney Freed, AKA the voice of the people. Kindly like, subscribe, and comment on stocks and translation on Spotify, Apple Music, Amazon, or YouTube.Kicking off today’s show with our phrase of the day, and it’s a fun one, meme stock. Yep, we’re talking about those buzzy crowd-driven stocks that often skyrocket not on fundamentals, but on vibes and a whole lot of social media hype. And despite plenty of economic uncertainty, stocks are still trading at record highs as we move into the back half of the year. And mean stocks, well, they’re making a comeback. Companies.Like Pallantti and Super Microcomputer, once written off as speculative trades, are now some of the top performing names of the year and our number of the day. It’s 1984. That’s the year GameStop was founded. Of course, GameStop became one of the first and most notorious meme stocks when it went viral in January 2021, thanks to Reddit fueled retail investors who turned Wall Street on its head.So what is it about these stocks that keep investors coming back? We’ll dig into the power of word of mouth investing, the psychology behind social trading, and why chasing trending tickers might actually say more about market mood than market math. So here to help break this all down is friend of the pod, Investorpedia editor in chief Caleb Silver. Welcome to the show, Caleb. We have spoken before, but not on this show, so I’m very excited to have you.

1:34 spk_1

Thanks for having

1:34 spk_0

me.

1:34 spk_1

Good to be back. Yeah,

1:35 spk_0

so there’s a lot to talk about with this market, right? We were just saying stocks at record highs, but there are a lot of unknowns.What’s your bird’s eye view of what’s happening rightnow?

1:43 spk_1

Yeah, it looks really good on top. This kind of reminds me of the soft serve ice cream with all the sprinkles on it. You take a couple of bites, the first couple of bites are awesome, and then you’re like, whoa, this is actually not so good as you get underneath it. But you can’t ignore the momentum and ignore the rally because it has been pretty broad. It’s not just the mega caps. It’s not just the mag 7. You see a pretty broad-based rally here into overbought conditions for most sectors of the market right now, not maybe not consumer discretionary, maybe not utilities because those are defensive plays.But you’ve seen a broad-based momentum and you have what we call the technical analysis like to call the golden cross. When the 50 day moving average crosses the 200 day moving average, stocks more stocks advancing and declining, you can’t ignore the trend, but it has brought a lot of froth and a lot of speculation, as it always does, because you’re always swing too far in one direction. Right?

2:29 spk_0

And that’s a bullish signal the cross there. But do you think the market has become a little too frothy? You were mentioning the broadening out on a sector basis, but on an individual company level, do we still need toSee more gains there to ease some of those investor fears.

2:45 spk_1

Itdepends what sector of the market you’re looking at right now, but if you go top to bottom here, looking at tech, big tech, take it down to materials, which have also done pretty well lately, and uh and some of the other sectors, they’re all kind of pretty strong. We don’t have a ton of stocks at record highs even though the market is at or near a record high, but we’re getting there and some of the most popular stocks are making record highs, and guess what? Those are the ones that most individual investors own the Nvidias of the world, the Palantirers of the world.The Microsofts and even the apples of the world, and Apple hasn’t had a great year, hasn’t had a great 3 years, but still one of the most uh widely owned stocks in the market.

3:19 spk_2

So should peoplejust keep piling in, or are we missing something?

3:23 spk_1

Yeah, people keep piling in. Guess what we do every 2 weeks. We pile in, right? Who changes their allocation in their 401ks? Who changes their allocation in their IRAs on a biweekly, monthly, quarterly basis? We barely change it every single year. So guess what? We keep buying the same stocks, we keep buying the same index funds. We all own the same.So you do have an overconcentration. The good news is the overconcentration has broadened out beyond the Mag 7. So you see other stocks making their way into this new group of what will be probably the most important companies over the next 5 to 10 years. What

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aresome of those stocks that are making their way in besides the Mag 7? Yeah, well,

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Palanter is number one. Pallanter is the best performing stock in the S&P 500 so far this year. Proximity to power always helps. They’re very in deep with the US government, so that’s pretty popular. But you also see other other companies rising up. Microsoft’s done.Well, Meta obviously has done pretty well. Uh, even in Alphabet has performed well as it gets out of the search business. So a lot of those popular stocks are doing well. But then you see what the institutions are buying. They’re buying stocks like a Lamb Research and Eli Lilly, so you see momentum in those sectors as well.

4:27 spk_2

Pallanter confuses me. The trading volume, as far as I can see, is always massive, but then there’s no news. So is that, that’s like the meme stock?

4:35 spk_0

Is it still considered a meme stock, I

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would ask. I don’t think so. I, I think I would consider the US government stamps.Because they have tons of contracts with the US government, Department of Defense, and across corporate America right now. I think they’re well beyond meme stock. I think they’re pretty established, but like you said, if you don’t understand what they do, most people don’t understand what Palantirer does, but they do a lot of data work for the US government.

4:57 spk_0

And it’s an AI play as well, correct? Or do you think the trade is mostly happening on the because of the governmentconnection?

5:03 spk_1

I think it’s got all the right things in its favor, right? It’s doing it has government contracts. It’s got government contracts around the world. It’s also.Doing contracts with some of the biggest corporations in America, but it’s using AI for productivity. I like to look at a stat, a revenue per employee, how much revenue sales companies are ringing out of their employee base. That’s one of those that has a super high ratio because it’s so profitable, makes so much money, but doesn’t require a lot of people. Nvidia is like that as well. Apple’s the number one company when it comes to revenue per employee. So when you see these companies with these massive margins, smaller and smaller workforces using AI as a productivity tool, you know, their profits are gonna.Increasing guess what we pay for as investors? Rising profits,

5:44 spk_0

right? And I want to get into the institution versus retail side in just a bit, but question for those that maybe haven’t bought the market yet. We’re at record highs. Do you buy right now? Do you wait? Do you book some profits? What’s your advice to

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investors? Yes, who you are, where you are and what your plan is. But we always say at Investopedia, the best day to start investing was yesterday. The next best day is today. I don’t care if we’re at record highs. I don’t care if we’re down 10%. If you’re going to be in this for 10+ years, start buying.And keep buying and keep accumulating, build big positions in your favorite stocks or indexes, ride through the waves, and if you’ve done that this year, you’ve done very well despite all the headline risk and that 19% drop we’ve had. If you’ve done that over the last 5 years, you’re doing fabulously well. If you’ve done that over the past 20 years, you got to be a millionaire plus buy now because you have to be invested and you have to keep investing in this market in order to generate those compounding returns.

6:35 spk_2

Investopedia has like an investor sentiment survey. It shows 24%.are pulling back and 28% think there’s a 10+% drop coming. Where, where is thatcoming from?

6:48 spk_1

Because we’re always paranoid. We always think something’s going to happen. But given the headline risk, you can understand it. We saw the market drop 19% right after so-called liberation Day because of all the fears that turned out to be maybe more smoke than fire. We’ll see. We’re not at July 9th yet, but we’re creeping up on it and anything can happen. But we get scared sometimes, or we say we’re scared, but we

7:08 spk_0

don’t necessarily.What you do, and we’ve seen that in the past with the soft data coming in below expectations, but then the hard data continues to be resilient. Yeah,

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hard data on top, headline numbers look fabulous, and people say they might be scared. We saw the institutional sentiment surveys that said institutional investors were very cautious right now, long cash. Even individual investors who said they were cautious didn’t get out of the market, even when the VIX was high and the market was low. A lot of them bought the dip. And

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to that point, you have an emoji reader meter here for Investorpedia and you sayReaders are cautiously optimistic as we head into the backup of the year, but we were talking a little bit about institutional investors, retail investors, and there seems to be a bit of a disconnect there. It seems to me that retail investors, they’re driving this rally and sort of pulling the institutions along with them. So why do you think we’re seeing that disconnect right now and what’s your view on what that means as we round out 2025? Yeah,

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remember that in retail investors like us, we’re 22% of the market when we’re all in.On the market, so we can move it just not that much. That said, we’re not managing other people’s money, right? We’re not worried about losses, trying to protect gains, trying to be tax efficient all the time necessarily. If you’re an institutional money manager, your job is to make sure that you don’t lose your client’s money job #1. #2, make sure you don’t get left behind in the rally. So they’re cautious by definition because they’re protecting gains. They’re protecting their clients from the unknown, but they’re also slow to react to the trend moving in the other direction because they gotMuch money to move at one time. So we move it and we’re louder as as retail investors. We’re out there on Reddit, we’re out there on social media talking about it. Institutions move a little quietly. They move lots of money very quickly, but they are, they don’t move into trends as fast as retail investors because they got to do it methodically and tax efficiently.

8:58 spk_2

Maybethis is a silly question then, because I was gonna say who leads buying of different things, because to me it would seem like it would be institutions that are like have all the data and the research and they’re trying to make money for their clients, butAnd you’re telling me they’re, they don’t go to the trends as quickly. Is that more like a meme thing like for retail investors, it’s easy to be like, we pick GameStop and just drive it, whereas they’re obviously going to be hesitant. So is meme stocks the only area where retail kind of leads institution?

9:26 spk_1

Yeah, I would say so. And also sometimes in the cryptoverse you see that as well, but definitely on the meme stocks because you know people are making noise about stocks that really aren’t profitable, sometimes even pre-revenue, you see a stock like a lot of the ones that we’ve been tracking over the last few.Weeks that are up 300, 400%. You’ve never heard of these companies. I’ve never heard of these companies. And then there’s companies that you have heard of, like in Avis that stocks up over 100% this year on what? On what news? Are we renting more cars all of a sudden than we used to? Are they rolling out a new line of EVs? No, it’s just a stock that gets treated, uh, like a chew toy in in the Reddit universe and also on social media. When you get a lot of momentum in these smaller volume stocks, right, with smaller, uh, uh, share prices, a lot of them in the Russell 3000, they can.A lot quicker. So yeah, that’s where we move a lot quicker than the institutions, but algorithms drive the market by and large, right? They are buying signals or selling signals that are triggered almost every single second by every single word that comes out of anybody’s mouth where institutions have these hard and fast rules. When these conditions happen, we do this, and they move a lot faster than we can because when you and I buy or sell a stock, it’s got to get looped in with a bunch of other orders of the same magnitude, same price, so you get a lot of 10,000 and then that stocks eventually traded. So why do we have the delay? We don’t have that.Kind of tradingpower.

10:41 spk_0

And when we’re talking about meme stocks and the momentum trades that we’ve been discussing, I wonder if it’s because retail investors, they’re typically younger, they have a shorter time horizon. Maybe they’re just used to this V-shape recovery stocks bouncing back. You can look at COVID. We had a pretty quick recovery from then, the April lows, same thing. Do you think there’s an element of maybe they don’t know how bad things could get? So stocks always usually goup?

11:06 spk_1

Yeah, they’ve they’ve had the experience. Think about it from 2008 all the way.Through to today, we had some, I mean, 2008, 2009, the great financial crisis was a reckoning. A lot of people started investing, but then they saw what the government did in terms of flooring interest rates and raining money down on everyone. That happened again during COVID. And guess what? We had a cute little bear market for a couple of weeks and then we were back to the races because we had money and time on our hands. But also younger investors, especially new, younger, and more traders and investors. This is a little bit like sports gambling to them, right? So they’ll take a flyer on a stock.That might be pre-revenue, pre-profit. Nobody’s ever heard of because they’re hearing about it. Not that big of a loss if they didn’t get in too hard on it. And they’re taking chances. They’re taking bets versus saying, let me build myself a long term established portfolio that I can ride into my retirement. Very few people, especially younger generations, are thinking that way in the early part of their investingjourney,

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right? Because I think the great financial crisis left a little bit of scar tissue, I would say, on some millennials out there. But hold that thought, Caleb, because we’re going to take a short break, but we’ll be right back.Welcome back to Stocks in Translation. We’re here with Caleb Silver. We were just talking about meme stocks as momentum trade, but I want to get your viewpoint on another risky asset, and that is Bitcoin. We’re seeing record highs there as well. I cryptocurrency, it’s gone through waves. It feels like we’re in this period of momentum as we’ve been discussing the entire show. So what’s your view on cryptoright now?

12:39 spk_1

Yeah,In cryptocurrency’s favor. I was at Bitcoin 2025 in Las Vegas. The vice vice president showed up. Uh, the president’s sons were there touting their new decentralized finance platform and their, their crypto trading platform. So they’re all in. And when you have that type of easy regulation and favoritism from the government, well, it’s green lights. But if you’ve also noticed lately, Bitcoin has gone through this resurgence where it’s not just retail andInvestors who are buying it, big companies are adding it to their treasuries by the billions, right, to grow their treasuries and have something that’s separated from the dollar denominated currencies that most of them do business in. Why would they want to do that? Well, if you own Bitcoin in your treasury, let’s say you have, you know, $500 million worth of Bitcoin in your treasury, Bitcoin goes up 10%. That makes the overall value of the assets, part of your balance sheet look a lot.Healthier, so you’ve seen companies do that from the black rocks of the world, which owned billions of dollars in Bitcoin to the GameStops, which just an offering so it could free up cash to buy $500 million in Bitcoin. They’re loading up their treasuries. Now we had this big rally in Bitcoin when the spot Bitcoin ETFs were approved finally and we can now own them in our 401ks and in our portfolios, and that drove a lot of retail interest in Bitcoin.But right now the institutions are all in and they’re building their own war chests of Bitcoin before the supply runs out because there’ll only ever be 21 million Bitcoin ever printed. So we’re at around 19, 19.5 million or so. They want to make sure they own as much of it as possible because they see a further deregulation or an easing of regulations into this industry to bring cryptocurrencies into the financial services sector. PS, it’s already here.

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This is gonna sound really stupid, but can’t companies do this with anyStock, like they’re, they’re just they’re they’re supporting their balance sheet with crypto, if they believed, let’s, I’m gonna throw a random name out there, if they believed Apple was gonna go up a ton in the next 10 years, can’t they just do that with the stalk or is there something different about Bitcoin. Bitcoin

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has a limited supply, so that’s one of the reasons, and they see how widely it’s being adopted, so it’s also a hedge against the other types of regular assets they might have in their portfolios. And you see companies.in other companies all the time, but you know what they mostly do? They buy back their own stock, best use of their cash for the most part, more tax efficient way for them to actually return cash to shareholders also kind of props up the PE, the part of the equation in PE, because if you take shares off the table by buying them back, your profits look a lot better.

15:10 spk_0

So what do you think of the crypto strategy of a company like Strategy, which owns a ton of Bitcoin? Does that make you nervous as an investor? No,

15:19 spk_1

aslong as they areThey are, who, who they say they are, and they have decided very clearly. Michael Saylor has said, no, we are basically a Bitcoin treasury company. No need to play around with the other businesses that required a lot of people to manage, required contracts with other companies. No need to play around in that area when we can just ride the wave of all our Bitcoin holdings, and they’ve been buying it for years and years. So you got to imagine their average price is pretty low over there. All in. And as long as you’re saying that’s what we do, we are all in on this, and if you buy our stock, you’re basically betting on.Bitcoin, that’s a proxy.

15:51 spk_2

But it’s very volatile, so it, it scares me a little. Maybe I’m not understanding it completely. When Bitcoin tanked, didn’t it go to like from 100 to like 70,000. So that’s a, that’s a big swing and yes, it did recover, but it still makes me skeptical.

16:07 spk_1

Sure, but if you don’t have a stomach, you’re not allowed to cryptocurrency, right? You can’t crypto Bitcoin has gone through 50% crashes multiple times since 20.14 or so, right? We’ve seen that happen multiple times, but guess what’s happened after that. It just keeps rising. The chart goes up and to the right, mostly because people want to keep owning it and especially as it becomes more widely adopted and more widely used and America becomes the so-called crypto capital of the world. Everyone wants their coins. They want their own piece of it. And so, yeah, it does crash, but so do stocks and so do other asset classes. Bitcoin has been like any other asset class we’ve ever seen in the history of the financial markets.We’ve never seen anything like the charts that it’s produced

16:51 spk_0

and the riseof stablecoins as well helping to boost the overall crypto sector. But you did say in your notes to us that rise in risk assets, which include Bitcoin, that that points to a fundamental problem inside the economy. So what is that problem?

17:03 spk_1

Theproblem is that as I said earlier, lots of sprinkles on top, tasty, the top of that ice cream cone, but once you get into it,

17:12 spk_0

you see I hate whenI lick all the sprinkles my ice cream. I will say

17:15 spk_1

what do I have? I got a soft.But what do you have? You have an economy that’s slowing, right? We only grew at a 0.5%, 0.5% in the first quarter coming off at 2.4%. Some of that was, you know, uh, concerns about tariffs, companies pulling back on manufacturing, pulling back on capex, pulling back on industrial production in general. So the economy is slowing a little bit. We got a decent jobs report. Jobs were 147,000 added kind of bang on on average, but if you look inside the numbers in the private payrolls report, that actually fell for the first time in.Months last month and you’re seeing big announcements from companies like the Microsofts of the world they’re laying off 8000, 9000 people, and that’s not a lot, given the size of its workforce. I think fundamentally it’s not as strong as we think it is. Small businesses will tell you that. And I think if you look inside the balance sheets of most Americans right now, well, the top 10% are doing fabulous. More millionaires than ever were produced last year, rising stock prices and rising housing prices. That just makes you richer and richer. But most people don’t feel that, so under the surface, not so great.

18:15 spk_0

Well, when did thecrowdbreak the ice. We haven’t seen it so far. When

18:19 spk_1

westop spending and guess what? We’re really good at spending. We really have a hard time stopping our spending, and especially as things become more expensive. And so far we haven’t done that yet. We have kind of rising credit card delinquencies, but they’re not where they were during the great financial crisis. We have rising mortgage delinquencies again, nowhere near where we were in the past, and wages have increased, people have gotten used to higher costs in general, but two big things have happened lately, right?Egg prices have fallen and gas prices have fallen. What are the two things we buy almost every single week? Gas and eggs, right? And those make you feel like you have a little bit more money in your pocket when you’re not spending $60 on the fill up, you’re spending $35 on the fill up. But when we stop spending, that’s when the economy really slows, and that’s when the wheels start to come off a little bit. I haven’t seen that yet.

19:04 spk_2

So if there could be cracks to come, potentially, what are some hedges that you hear about the people like getting into? Is it gold? I mean, is crypto crypto is kind of a hedge sometimes.

19:17 spk_1

Yeah, they used to say it was a non-related asset. I don’t believe that anymore. Look at the stock market and look at crypto right now. They kind of march to the beat and that beat is gone, right? But what does well, well, sometimes short term treasuries do well. We saw how big move to that trade.Uh, earlier this year during a lot of the terror of madness, so a lot of people moving into the short term paper that makes a lot of sense, but also utilities do really well in, in an environment like that. They kick off nice dividends, we always pay our utility bill, right, every single month. So you saw that doing well and Staples did well. Now you’re seeing the reverse of that, right? Now you’re seeing aggressive growth, uh, do pretty well again, momentum do very well again, cryptocurrency doing pretty well again. So anytime you see fear, you see the.The safety trade back on and gold has been a big part of that. There were multiple record highs for gold going into just this month.

20:05 spk_0

All right, I want to switch gears to a segment that we like to call lost in translation, where we get our guest takes on what the market might be misunderstanding and something that you find people are not quite getting right is tokenization. So talk to us a little bitabout that. Yeah,

20:18 spk_1

tokenization is happening across the capital markets and what do I mean by that? Well, in cryptocurrency, lingua franca tokenization basically is creating proxies.For actual assets in cryptocurrency or in crypto tokens. So last week we saw an announcement by Robin Hood saying it was going to sell tokens uh for stocks like uh OpenAI doesn’t even have a stock yet, private companies like OpenAI. So investors kind of trade alongside of the progress of that company. But ultimately, and if you, if you listen to my good friend Rick Adelman and the Truth About Your Future, you know that all companies are moving towards tokenization in their physical assets. So soon.When we get 24/7 round the clock stock trading, it’ll be based on the tokens of these stocks, not the actual stocks themselves, the proxies for these and all that will happen on the blockchain. So you will no longer own 10 shares of your favorite company, you will own tokens that represent the shares of your favorite companies, and they will trade 24/7 just like cryptocurrency. We’re seeing that across sectors right now. All these announced.It’s about stablecoin adoption and allowing stablecoins, the stable act, allowing stablecoins into our banking system that paves the way for more transactions and more trading in cryptocurrencies just like the regular assets that we’ve been trading for the last 100 years.

21:37 spk_0

This isbringing my mind back to the NFT craze from a few years ago, but then it seems like that went away. We don’t hear about NFTs anymore.

21:45 spk_1

Right, and NFTs because there was really nothing beyond that, you know, if you, you bought a, a, a work of art, you didn’t even have the rights to display it necessarily. You basically own the rights, but the rights are not as important as having something that can be transferred into fiat currency. And one thing we’re starting to see as well, especially with Bitcoin, but other cryptocurrency holdings, we’re seeing lending institutions that I’m talking about established lending institutions allowing you to borrow.Against your crypto holdings, right? You can now borrow to buy a house against your Bitcoin holdings if you didn’t have basically good credit necessarily or you didn’t have other means to raise the cash, but you got into Bitcoin 10 years ago and you’re sitting on a few million bucks. You can borrow against it for fiat currency, put a down payment on a house or even buy a house outright. So it’s in our system right now, tokenization is just the next step where all of a sudden.Nothing’s quite real anymore. We’re just trading the, the, the token manifestations of our asset classes.

22:39 spk_0

All right, the token manifestation. Good to know here, Caleb. Thank you so much for joining us, and we’re winding things down here at Stocks and Translation, but make sure you check out other episodes of our show on the Yahoo Finance site and mobile app. We’re also on all of your favorite podcast platforms, so be sure to like, leave a comment, and subscribe wherever you get your podcasts.