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- [00:00]
A
What's up guys? I am very excited to share. We have Yannick Malling on the show today. He's the co founder and co CEO of Public and we are getting into how retail investors are positioning to start the new year. What's happening with the Iran war and what that means for your portfolio. And we are also breaking news on this show about how AI agents are coming for your portfolio. This is a fantastic conversation. Stay tuned to the end. I think you're going to love it. Yannick. You're running one of the biggest investing platforms in the world right now and I would love to get your take on just what you are seeing as far as retail investor positioning to start the year right now.
- [00:38]
B
Yeah, it's been super volatile obviously and I think people are having two competing ideas in their head. This AI super cycle that feels easy to put money behind and invest in. I think every week almost we have another breakthrough in the world of AI retail investors. Look at that. And they're like wow, okay this is definitely going places. But then at the same time a lot of short term turbulence through obviously the war in the Middle east, the impact on oil, what that might mean for inflation and like having that whole merry go around kind of happen again. And so I think it's folks are a little bit, it's a little bit two sided right now. A lot of opportunities for sure but also a lot of short term risks at the same time.
- [01:29]
A
What are you seeing as far as like the most popular trades on, on the platform public right now?
- [01:34]
B
I mean I think buying the dip is always something that's very tempting for folks. We saw it through Covid, we saw it for the tech wreck. It's been the same this time again. I think however you are also seeing folks that are a little bit more focused on trying to hedge. And I think there's generally speaking two camps. I would say the majority of people think this too shall pass meaning the oil price and the war in the Middle east and the effect that will have on the US economy and the US stock market which feels a little bit more insulated from some of that stuff by the way than other economies around the world probably are. But then there's another group that says hey, this could take a while to play out because whenever you mess with the shipping, whenever you mess with the price of oil, the ripple effects are just massive. And so the second and third order effects are kind of a little bit difficult to comprehend sometimes. And therefore they want to put a hedge on. And so you've seen Some people go into energy. You've seen some people go into some of these shipping stocks that have done incredibly well on the back of all this stuff, just as they did during
- [02:45]
A
COVID Can you share an example of one of these interesting trades that you're seeing?
- [02:52]
B
The BWET ticker, which is a shipping etf, has been kind of interesting. And generally, I think what was interesting is a lot of the energy names already were playing a part of the AI narrative sort of on a longer term cycle, and then now they're also playing sort of a role here in the short term with some of the geopolitical tensions that we're seeing playing out.
- [03:21]
A
Yeah, I think I last checked, energy's up like 27% or something to start the year. Just absolutely crushing every other sector. This idea of retail buying the dip, they've pretty much been correct to buy the dip every single time last few years. That's something you're seeing on the platform. Is that true?
- [03:41]
B
Absolutely. Okay, absolutely. And I think, by the way, they've always been successful. It's just a question of time. Right. And I think many believe that the same is going to be the case this time around.
- [03:51]
A
Okay, I think that makes sense. Do you see any type of, I don't know, things that retail investors maybe aren't thinking about right now, if they're still buying the diplomatic? But, you know, maybe there's risks in the market that you're observing that you don't see being picked up on.
- [04:08]
B
Yeah, like I said, I think whenever it comes to geopolitical risk, it's always a little bit tricky for folks to kind of wrap their head around what that means for their portfolios. I think you saw the same with Ukraine. And it's also a situation where everything can kind of turn on a dime.
- [04:25]
A
Right.
- [04:25]
B
Like literally one, one tweet from, you know, the president or one of the secretaries can, can send markets warring or plummeting. And, and so I think people feel a little bit on edge with some of these short term, kind of very volatile moves. But then they look at stuff like AI and it's easy just to have just like absolute conviction that AI is going to continue to play a massive role in all of our lives and investing through that stack. Obviously there's been a lot of risk around private credit, but I would say generally folks in public have not been exposed to that really much. So I think fortunately they've sort of stayed clear of a lot of those.
- [05:08]
A
Where do you fall on the AI bubble debate as far as the Stock
- [05:12]
B
market bubble, I fall on two things can be true at the same time, that this may be a little bit of a short term bubble, but it's still to be a lot larger if you look out five, even 10 years.
- [05:27]
A
Wait, tell, tell me more. What, how short term are you talking?
- [05:30]
B
Well, it's just like generally, I mean, as of this recording, you'll look at valuation multiples and they've obviously come a little bit down this year given, given how the market's kind of traded in general. And so I think maybe now they're a little, a little bit more reasonable. But I think throughout last year, a lot of people looked at it and said, okay, Nvidia in theory is getting cheaper because enterprise earnings ratio, it actually continues to do pretty well. This is not just all multiple expansions, it's actually because they're putting up a lot of results. But then there are questions about how long can it last. Jensen just continues to knock it out of the park at all these events and all these earnings calls. And so I personally am definitely long the AI super cycle in a big way. I think I've seen the evidence now that this is going to transform pretty much every aspect of society and especially of our professional working lives. And I think the ripple effects of that are just impossible to model. And it's in those situations that I think as a retail investor especially, you can find a little bit of alpha because most of these technologies that have their own super cycles. As a Wall street investor, it's really hard to go to your boss and be like, oh, Nvidia is going to be a $10 trillion company in a few years just because we've never seen a $10 trillion company. Right. And so I think if you believe as a retail investor, that's where some of the best opportunities tend to be, because retail investors don't have anyone to answer to but themselves. Right. And so it just comes down to the level of their own conviction and they can sort of do the first principles research in a little bit more of a pure way because they don't have to worry about, wait, how I'm, how is it going to be perceived if I end up concluding that this thing is going to be absolutely massive and it's going to shatter all records, et cetera. Whereas like a Wall street analyst sometimes maybe have to think a little bit about that before walking into the room and presenting all the findings. Right. And so I think, I think generally speaking, that's one of the things that I love about retail. It's a Sort of little bit of a cleaner world than the world of analyst ratings and all that. It's just people with their own money putting their money in the things that, that they believe will be true in the future.
- [08:04]
A
Totally. And retail, they don't have the quarterly deadline. You know, they're not trying to impress or beat on anything on a three month basis. Which I think makes the almost like the sport of being a retail investor so compelling. And. Okay, Yannick, you have actually news to break today and this leads us right into that public is launching AI agents inside portfolios. Can you tell us what that means?
- [08:32]
B
Yeah, absolutely. So it's the easiest and safest way to start using AI agents to manage your portfolio. And so it's a tab in the app called Agents and you can literally just go there and you can instruct agents to do whatever you want. So examples might be like if oil spikes on the open, find me a few ways to get my portfolio hedged with put options. And then it would ask you a few questions that you go about answering. How much risk do you want to take? How much of your portfolio would you plan to hedge? But then it actually is able to not just help you do that work, but execute those strategies on your behalf. And so it's AI agents that you can use to monitor markets, move money around and even execute trades.
- [09:25]
A
So if I were to go in and type in something like every time Nvidia dips 2%, buy 500 bucks of it if I hit enter, what exactly like what, what actually happens in my portfolio?
- [09:41]
B
So the AI will first off propose an agent that lays out that entire workflow. Right. And so it's on you as a user to kind of read that through. There's a visualization, kind of like a flowchart. In this case it would be like, hey, every day I'm going to check for Nvidia or every hour or every five minutes, whenever it is, I'm going to check this thing and it's going to map out all the conditional kind of logic and then show what action that it's going to take when you run that and activate that in your portfolio, that will run. And that actually very importantly runs in a deterministic way. So you do not have to worry about hallucinations, you do not have to worry about any of that stuff. That has been a little bit, I think so far of maybe a blocker for some people when it comes to using AI for their investing. Like, I think a lot of people can see the idea, but have been a Little bit more worried about full autonomy of agents not having any control, the security risks that comes with things like openclaw, et cetera. And so we've designed this to run within your public account so it's secure. It's also transparent by the way. Every day you'll see exactly what your agent does. Every day it will likely send you a push notification being like, hey, Nvidia got close to hitting that mark today, but it didn't quite get there. So it didn't do anything. Like it's really built to be overly informative and sort of over communicating, if anything, so that people get a sense of control and transparency and it's not a black box as far as what these agents are doing within their portfolios.
- [11:14]
A
Okay, I think that makes sense. When I hear people talk about giving AI agents access to things. A lot of people are skeptical to even give it their Google Calendar. Right. Just to look at their calendar or even like their Slack messages.
- [11:30]
B
Totally.
- [11:31]
A
Do you see that barrier when it comes to actual money on the line
- [11:36]
B
with things like Openclaw, etc. Absolutely. And I have, I have also been like, I love openclaw and we were the first brokerage to still the only brokerage I believe to actually have an officially maintained openclaw skill. And that that business has been fantastic for us and it's super exciting. But I think the users of that know how to mitigate some of those security risks. If you don't, it can get a little tricky. The openclaw founder himself even made some remarks alluding to this. And so these agents that are running inside public with those, you don't have to worry about any of that stuff. Right. Because they're running within your authenticated brokerage account, you don't have to worry about sharing of API keys, you don't have to worry about security leaks or any of that stuff because it's protected by the same bank level security that protects all your assets on public. So that's number one and number two is it's just a lot easier. You literally just go to a tab in the app and you can prompt whatever you want and in a few clicks you can start spinning up agents to do stuff on your account. And you know, you can have it notify you of certain things or you can have it actually make the trade so that you don't have to. But again, even if you decide to give it full access to trading, it runs in a deterministic way. And so it will never be able to do anything outside of the rules that you've defined for each agent. And that, I think is a key design principle that helps people get more comfortable with starting to leverage these AI agents to manage their portfolios. Because I think there is a real opportunity for retail to start, you know, using AI more and more to run their portfolios. Because it's, I think, the biggest resource that retail has ever gotten access to.
- [13:28]
A
Totally. You know, and Wall Street's been using AI tools Absolutely. For a long time to just help them make decisions, research, execute trades. And I'm wondering, is the implicit goal of this new product line to improve returns? Is that part of the plan for AI agents?
- [13:49]
B
Yeah, I think we always look at our products through the lens of what can we do to help make people the best investors they can be. And obviously, implicitly in that you have things like returns right now, what I think is interesting with agents specifically is that they help take a lot of the emotion out of the equation. And I think you talk to any investor or trader, they probably say, everyone will probably say, I've never been 100% disciplined around my. My sort of strategy. And I probably would have had better returns if I had stayed 100% discipline disciplined around my strategy. Right. And so agents give you the ability to do that without needing to have any technical competency. Right. You've sort of had some people doing programmatic trading, but they would sort of have to fit that Venn diagram overlap of knowing how to code and knowing sort of like having all the ideas. What happened now is that Venn diagram got eclipsed overnight because you can just. You don't have to learn how to code to start automating some of your strategies. And even the example you just weighed with like buying the dip on Nvidia, like a lot of people have these strategies, these. But they're like these unstructured thoughts in their minds. Right? So you talk to them and be like, yeah, I'd probably always buy Nvidia if it's down 5% intra week, right. Because I believe in the company long term, and I'd always see that as a buying opportunity. Or at least they'd say, if Nvidia is down 10% for the month and the PE ratio is actually down as well as the stock gotten cheaper, then I would always buy. And so everyone ultimately has strategies. I think what AI agents can do is help them crystallize those and then obviously have agents kind of carry them out, which means that they don't have to sit there 24, 7, monitor the screens waiting for the right Moment of entry. They can just sort of prescribe it to an agent who will carry out all the work.
- [15:53]
A
Real quick, we'll get right back to the interview. Just wanted to pop in and say if you like this content, I write a newsletter every single morning called Opening Bell Daily. I cover macro, the stock market, asset prices, why things are going up, why they're going down. And if you want to get that for free, you can sign up at the link in the description. Let's get back to the interview. Taking out the emotional side of trading, I think is a huge win. And that's probably the biggest thing that handicaps retail because you're pretty much having to manage your own emotions because you're going in and out of stuff. And generally the more you trade, the more money you lose over a long time horizon. So, okay, what do you think of this? The agents pretty much unlock access to potentially very sophisticated strategies. Right. If I wanted to implement a covered call strategy that's mixed with like a technical indicator or something, I could have the agent do that. But if I'm a very beginner or amateur trader, then you're pretty much pairing an amateur with a very sophisticated strategy. How, how are you thinking about that?
- [17:03]
B
I think it's a fantastic example because I think if, if, if we zoom out a little bit, what we've been doing collectively as an industry for the last 10 years have been giving everyone access and lowered the cost of trading to zero. In fact, on public, as you know, you actually, if you engage in options, you actually get a rebate if you cover calls right now. Where do you go from there? I think the next job to be done is making sure that retail not only have access, but they have access to the same resources and essentially same intelligence as institutions do. And the covered call example is a great one because there are a lot of people that would like to generate more income for their portfolios selling covered calls that might still not really be confident enough to know how to navigate an options chain. Figure out what's a high risk or low risk way of actually doing this. And so with agents on public, this is now simplified to simply a prompt. Help me find ways to make ten grand a month sending covered calls across my top portfolio. But don't touch Nvidia, you know, and you prefer a technical indicator, be that like do it on stocks that are, you know, mostly overbought or oversold or whatever. And so then it will come with a few. Again, you'll have a conversation with it. It won't try to one Shot anything. It's really designed to be your sparring partner. I think a lot of these AI tools try a little bit too hard to kind of one shot stuff and then they implicitly make too many assumptions that they shouldn't have. There's this old great saying that I love. That assumption is the mother of all fuckups.
- [18:38]
A
Right?
- [18:38]
B
Excuse my French, but. And so our agents on public won't do that. They'll instead ask questions to get the detail right, to make sure that you're comfortable with the agent workflow that's being created for you. But ultimately, yeah, it's as simple as putting in that prompt you'll have a conversation where you'll figure out what's a low or high risk to do this. Is it a 30 day thing, is that a 90 thing, et cetera. They'll kind of guide you through it and in the end you'll hit activate and it'll run on that, on your account. And so you can go from a situation where you can start making money selling covered calls without ever having to navigate the options chain, which I think is a huge sort of leap in the user interface and in how frictionless essentially it is to have a sophisticated investing portfolio.
- [19:26]
A
I mean it's really, I think it's amazingly innovative. And certainly no other company or brokerage is has this product available. So here's something I'm sure you've discussed with your team. Is it possible to prompt an agent to essentially destroy your portfolio? Like if you said something outlandish and said I want you to execute this trade or series of trades, even if it'll probably bring me to zero, will an agent push back and try to.
- [19:55]
B
It absolutely will push back. Actually, I'll give you a, a less degenerate example, which is I was trying to set up a Martingale strategy, which is when you double if you're in trouble kind of thing. And these things obviously can quickly build up massive positions. And it asked me from the get go if I wanted to have a maximum kind of stop out, like a maximum amount of capital that I wanted to put on the line for the strategy. And I said no. And it asked me two or three times, like, are you really sure you already have a margin balance? I see. This could get really out of hand. Like, you know, you can build up if the market goes against you, you can end up taking a lot of risk. And so I think we've designed these. I mean, look at the end of the day, outside of the user themselves, no one has less of an incentive for your account to go to zero than public. Right. And so we think a lot about the return profile for our users, the sort of outcomes that they can potentially get with every tool that we roll out. I think we have a track record of doing that and we've obviously kind of done that here as well. And so in this example, it would push back very, very heavily and make sure that you understand every single aspect of what you're actually getting yourself into before it would execute that stuff on your account. And so there's always been that balance of like, you don't want to be too paternalistic, but I think you do want to put up guardrails and make absolutely sure that people know what they're getting into. And in the era of AI, by the way, we used to do that through just like pixels on the screen, right? Like basically UI elements and such. With AI, it's a lot in how the model is trained and how it thinks about stuff and a lot of that harness and kind of context engineering that goes into it.
- [21:52]
A
Yeah, I think that's a pretty good answer. When you think about, let's say three, five years down the line and you think about your brokerage account, do you anticipate it'll be mostly agents executing your trades or you still think retail investors will want to have that human touch involved?
- [22:12]
B
I think there will absolutely be agents involved. Even if you're a passive long term investor. Just the agent of like every year when my tax documents are ready, just email them to my accountant, you know, like stuff like that. Or if we're talking three, four years from now, it might be prepare my taxes for me and send it to me. Right. And so I think for every type of user, I mean, there's no question that there's a lot of traction in the world of agentic trading right now, which obviously has more to do with people that are a little bit more active, you know, swing traders and active traders and such. But I really do believe that there's a user interface shift that's kind of happening here. You know, we used to basically call a broker on the phone, right Then with the dawn of the Internet, we could lock in and we could do it ourselves. That was an easier way to do it. Then Steve Jobs came with the iPhone. That turned out to be an even easier way to do it. And that gave birth to the neo broker, if you will. And now with AI, we think it's the era of the agentic brokerage. Now what's interesting is that every other shift has been about trading becoming more streamlined. Trading obviously got cheaper, which is great. But the role that a broker plays was reduced at every step because actually back in the 80s the broker used to call you and discuss markets, research ideas, risk management principles. And so with every step and with every new technology, whenever new type of broker, we reduce that to just being trade execution. I think what you're going to see happening with agentic AI and the era of the agentic brokerage is it's going to be back to being that full service broker model. Actually it's likely going to be full service plus because an agentic broker can do much more for you than your 80s broker ever could. I mean they can ride a whole algorithmic trading strategy for you in 10 seconds. They can help you with tax loss harvesting. Like they can do so much more. And so it probably reaches even into, you know, what a quant would do or a financial advisor would do. And so we do believe that it's a big platform shift. And I don't know if every single person will only use agents to engage. Like I think there'll always be this need to log in, see your charts, your positions, etc. Which is also why I think that something like public is a platform that's well positioned to kind of do this versus the general kind of models. But I do believe that every retail investor three, four years from now will have some mix of agents running in their accounts.
- [24:55]
A
Wow. It's very exciting to think about. I mean, you know, as myself an independent investor, right, I'm using public, I'm using generated assets. I love backtesting with the AI tools you have. Is this something you anticipate your competitors will start to try to catch you on as far as these agentic workflows and AI tools you're implementing?
- [25:20]
B
Um, yeah, probably. I mean, but I think we were, we took a bet on AI being a real user interface shift quite early. So we've been working on this for over three years now and started with research, which started off kind of, let's just say, kind of fragile, you know, back in 2023. Still a lot of hallucinations and such, but we saw the pace of change and then that led us to actually using AI to create whole new assets with generated assets that we launched last year and now AI actually taking action in your account with agents on public. And so we think that if this is a user interface shift, obviously other people will have to kind of do something similar. But you know, speed is sort of the only mode in this World, I find I think public has a record for having one of, if not the highest product velocities in the space. And especially when it comes to our AI stack, I think that has the fastest product velocity of any product that I've ever been part of building. And so. But yeah, of course, similar to mobile, similar to kind of fractional shares and stuff. I do think what's interesting is if you look at the incumbent set, some of them are still seem to be catching up to the era of mobile. And so I think your risk being two kind of super cycles behind if you don't get into AI. But it's obviously a lot harder for some of these mega, mega giant corporations to move fast on these kinds of things.
- [27:10]
A
I mean, the ones that have been around for a hundred years, some of
- [27:13]
B
them are really old.
- [27:14]
A
Yeah. Like it's going to be so hard for them to try to get into agents suddenly just because they're smaller, maybe nimbler competitors are doing it.
- [27:22]
B
I mean, I think we looked around and on average our competitive set is 65 years old. And on average probably built on something like Cobalt. And so it was a big leap from that being your core infrastructure and then deploying AI agents in a safe, secure, transparent way in your portfolio.
- [27:42]
A
Totally. Well, if everyone should definitely check out public and use public.com openingbell of course to sign up. And can you talk about the rollout for this product? Like when can people get access to this?
- [27:58]
B
Yeah, so we started rolling it out. Now there's a wait list that you can join. Join the waitlist quickly and you will get early access.
- [28:08]
A
Okay. Yannick, I really appreciate you taking the time to do this. I know this is the craziest week ever for you, so we'll have to do it again soon.
- [28:16]
B
Absolutely.