C (2:56)

Yes. So for receivers, gosh, there's a lot of names I can give you. But one in particular that I've talked about a bit in other places has been Cognix, which has this kind of like boring old business of sensors and things for packaging and, and they are starting to expand into being kind of the eyes for robots in the future. And so that's also seemed like kind of. I tend to be a value investor. Other people in my team are more growth investors. So we balance each other out. But that's done pretty well recently.

B (3:36)

A little bit hardware stock.

C (3:39)

No, I mean they literally, quite literally make like the sensors for packaging and things like that. So yes, I guess you would call it a hardware, but it's sort of the things that would end up being like the eyes and like the skin of, you know, the future skin of a robot. On the resources side, we've had, we have been owning aspects of energy for a while now, even before, you know, the conflict started because the demand for energy is, you know, doesn't seem to be going away anytime soon. So that's from traditional energy to you know, like Baker Hughes, which isn't more in the natural gas space to, you know, even rare earth metals.

B (4:30)

When you think about, let's say the market right now, my guess is with these three buckets of stocks, you're looking at this as a stock pickers market, right?

C (4:40)

Oh yeah, and I didn't give you my recoveries example.

B (4:43)

Well, let's go back to it.

C (4:45)

VF Corp is one, it's a retail name. It's been under pressure a little bit recently, but they make vans, sneakers, which I feel like are going to come back at some point. But they've been doing things actually with their balance sheet where they, they've sold a business, they're trying to reduce debt. Gap has done the same thing over the last like year plus. And so I just like names that sort of like on a micro basis are doing things to improve their business.

B (5:13)

How do you think about looking for stocks in this market? Like what are the variables you're looking for that you think, okay, this is a great buy in this environment at

C (5:24)

this moment, our process. And actually this goes back to your question before I rudely interrupted you on not giving you an example on recoveries is we start firstly I learned a lot over the years about behavioral finance. I worked on a team that used behavioral finance principles and it ends up meaning a lot of quantitative beginnings. So we've built factors that are value, growth, income, and that actually creates stock sleeves for us that we can use to pick. And then we kind of combine a qualitative overlay to that and we have some ways of figuring out what are the best factors to own at this moment. And then we look at what securities or stocks end up in those factors. And then we overlay a macro perspective as well. Because I think one of the downfalls I also learned over the years, and if you use a purely quantitative process, the minute sort of something secularly changes, that process is no longer going to work. And so you sort of need to be able to, from a macro and human perspective, know something's changed and we have to pivot to a new theme. And so we do a lot of macro reading, like a ton. I have to say, like X has Begun has become a huge source for me because I actually think it's almost become like faster and smarter than traditional sell side research in a lot of

B (6:57)

ways, way faster and smarter.

C (6:59)

And so that's been helpful for me to kind of form my own opinion. And then, you know, I still do read the traditional stuff and I read some paid research my whole team does, and it just kind of helps us like ferret out what, what we should own and what we should know. And. But we, we do start with that stock basis. And then I think about too, like most digital advisors don't go into single names. They're owning ETFs and they're investing for the long term. We're investing for the long term and we do own some ETFs. But I just think there's been a ton of things that have changed really since COVID that, you know, the same way I just talked about like, you know, once the secular shift happens, you got to make a shift. And so I think relying solely on the principles, for example, of modern portfolio theory is over.

B (7:49)

And we're instead moving to what if modern portfolio theory is over?

C (7:54)

It's not. So using it solely is over. I think you still can draw principles from it. But we are in a stock picker's market and I think it's one of the greatest times for people who are willing to put the work in. And the reason why I say that is a couple of secular shifts started happening in Covid. If you think about, take a step back, we had severe inflation in the 70s that was then finally started to be tramped down in around 1982. And Volcker started, he raised rates, stopped being a political thing, and inflation started coming down. Interest rates started coming down. Interest rates generally without whatever the individual spikes were, came down consistently from 1982 until 2021 through 2021. And you also had from 2010 onward, quantitative easing. So rates were kept artificially low, especially in that time period. Money stopped having a cost and risk, risk was really not being measured properly. And so you had that. You also had for corporations, pretty consistent drops in tax rates, like effective tax rates for them. So you had these two tailwinds for a long time. And actually there was a paper written by the Federal Reserve. I can't remember if it was a state or if it was the broader Federal Reserve, but that showed that like 41% of profit margins from I think it was 1989 to 2009 were driven by those two things alone. And then the other things I think is different. Entrance into the market, we have a strong retail contingent that I don't think is going away this time like they did after 1990, 2001, I should say we have AI as part of that. Like knowledge now has never been easier to get right. Like you don't, like we just talked about before. You don't necessarily need to have this outside research to get sort of form your own opinion. And then there's another thing too secularly that I think is changing the way the markets work, which is that you had the baby boomer generation saving into their 401ks for decades and now they're net spenders. And some of that will transfer. But I do think it shifts like, you know, the average marginal dollar starts to shift with it.

A (10:40)

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B (11:47)

All those tailwinds here, I think that's a big driver of why retail has flooded into the market. Right. All those things combined and Robinhood has been maybe the biggest beneficiary of the retail boom. What are you seeing on the platform as far as let's say the trends or even the most popular single name stocks right now?

C (12:11)

Yeah, the trends. It definitely shifts over time. The two most popularly traded stocks consistently have been Tesla and Nvidia, but doesn't mean they're consistently buys or sells. More recently what I have been seeing is, what we tend to see is that they trade single names and they do trade around their position. So they'll hold a lot of the Mag 7 and other positions and then kind of trim and add as they go up and down. However, in times of kind of greater uncertainty, they do tend to start building positions in broad based ETFs and that has actually I'm starting to see that now more recently again. So there's a lot of like the S&P 500 index funds that are at the top of the buy list. Tesla's still at the top of the buy list. And then silver has been a consistent trade this year, especially on the buy side. On the sell side more recently, interestingly, even though you're seeing S&P 500 be a big area of buy, the Mag 7 are being sold ex Tesla, that's more recent and that to me is the most interesting thing like almost also the as a part of that, like

B (13:31)

the AI trade, I mean that matches the broader market right off off platform. Let's say we've seen the MAG7 negative year to date. The market seems to be rotating into every other sector except tech right now. The retail trends on Robinhood, how have those matched or maybe been contrarian to what you're managing as far as Robinhood strategies,

C (13:58)

there's definitely some differences in that like our focus on the resources that that theme has. Not outside of silver, which I kind of put in a different category, almost think of that as like inflation rather than like needs for the global economy. And so that's been something that we've been in that are we haven't seen as a broader theme across our customer base. And then this recovery theme as well, I'd say a little bit in the software area. You've seen nibbles on our broader platform. And we've also nibbled on it.

B (14:38)

Like dip buying.

C (14:40)

Yes. Yeah, and we've nibbled on it, too, which has worked out more very recently. But you don't see some of the retail names that we, you know, have taken a. A stake in. They haven't. Yeah, you haven't seen any of that.

B (14:57)

Okay. You said that ETFs have become very popular with retail. What is the differentiation or maybe what's the pitch? If I log onto Robinhood, why would I go with Robinhood Strategies and you're managing the money versus me just buying the S&P 500 index fund?

C (15:17)

Well, to me, I think it's because you're going to leave something on the table. It's going to be 40% of the S&P 500 is driven by the top 10 names. Seven of those are the Magnificent Seven, which haven't been doing well. I think you're leaving opportunity on the table for all the reasons I just talked about, which all of those tailwinds to stock picking and Robinhood Strategies is not expensive. It's 25 basis points per year. And for gold members, if you any dollar above 100,000 is 0% fees. So I think over time it means you can actually like. Our goal is to grow your wealth at a faster clip over time.

B (15:58)

I think that makes sense. Robinhood's been rolling out pretty unbelievable features over the last year, this one included. So one thing I want to ask you about, you were very early on rotating out of the Mag 7, I think probably a year ago. Right.

C (16:14)

February of last year. I said, there's more to Life than the Mag 7.

B (16:17)

Yeah, I mean, it was a great. Turned out to be a great call

C (16:19)

because it was scary.

B (16:21)

There you were on an island at that time, but now you have every other portfolio manager saying, hey, we're looking at, you know, other sectors or even small caps, just anything but tech. Where do you think we are now in this broader AI trademark?

C (16:38)

Well, if I think about the reasons why I said it, I said it because I think there was just so many fiscal tailwinds in play. And I had this kind of theme of investing aligned with fiscal policy. And so I felt there was going to be a lot of money. We saw it poured into strategic assets for our country. And that the other theme I kind of always said to myself was keep the customer happy. And so that to me didn't necessarily mean like making the magnificent seven bigger. That to me meant that there would be tailwinds going into the defense space. Defense spending you saw in the big beautiful bill. Like as soon as I saw that draft I was like, okay, so we had an allocation and defense stocks and we still actually do today. And so I just thought like the next marginal dollar is not going to necessarily be going into Mag 7. And then when you started seeing all the money that they were spending and then the circularity started. So where we are today is like, I think it still has legs that there's more to Life. In the Mag 7 you see a stock like Nebias, which is like taking on more debt or convertible, whatever you want to call it. The private credit space is I think another area where. This is going to sound crazy, but there's this book that I read a long time ago. It's called the Business book who Moved My Cheese? It's very short. It's kind of ridiculous because you're literally reading about mice. But I think about that story all the time. I think about you go searching in these tunnels for your cheese. You find it, you sit and there's this group of mice that look around and realize, like, we're going to run out soon. I'm going to go look for the next opportunity. But the ones that are like maybe found it first, right? Like they sit fat and happy until they almost can't even move anymore because. And I get when I see just like so much money flowing, like it makes me nervous. That's why I said mention private credit. And I'm not saying like the Mag 7 are like private credit and they're all actually different. One of the things I think is that you have to treat them on their own. It's no longer buying the group. You have to, you know. So I'm not saying don't invest in them. I'm saying like, look at them like any other stock.

B (19:14)

Yeah, I think the group trade of MAG7 or even like the Mags ticker has done terribly in the last few months when you, you know. So you're moving off MAG seven, right. Big tech. And I know you have the three.

C (19:28)

Which one is kind of interesting lately but.

B (19:31)

Oh, which one?

C (19:31)

Well, I think Microsoft has just sold off a lot and I feel like down 25%. Right. And I'm like, you can't. I don't think you should count them out yet.

B (19:39)

Are you bullish on Microsoft?

C (19:42)

We have a position in it.

B (19:44)

Was it new in the recent software sell off or you would have been

C (19:47)

holding it from Previous we had a small position in it because it's just hard to not own it sometimes. Right. Because so big in the index, but once it sold off, we added to it.

B (19:59)

Okay, can you share more about the opportunities you are liking in this market? Let's say if it's not the Mag 7 except Microsoft and if we move past the three buckets we named earlier in the conversation, what sectors or what verticals do you think, wow, this is being ignored or maybe no one's paying attention. What are you looking at?

C (20:21)

Gosh, I'm always looking for that. And we've been talking on the desk about where to look next. Citrini Research recently put out a piece about the photonics area and one of the stocks tanked after they did because they said it was fully valued. So we're not in. I'm not necessarily looking at that one, but I'm still really interested in that space and watching it and seeing if there's like an opportunity to get in because they have rallied pretty hard over the last year and they're just like another part of the whole AI trade. But I think one that's still maybe not as well appreciated as others. The other things that have gotten my attention is everyone's looking at the price of oil, but what are the knock on effects of that? And so like playing something in the helium space because there is, you know, there could be a lack of supply of helium and it goes into so many different things. And then aluminum too is another. So this is actually more in the resources I guess, which is why this three Rs is like still continues to work for us. I don't want to get too far. It like I'm a little nervous that we've been doing some research and we're probably going to put a couple of trades on soon. But I'm a little worried to go too far into it because if all of a sudden one day everyone decides there's peace in the Middle east, in a month or two you'll probably end up like this. Going back to having. So I'm, I'm kind of, I'm just taking a little bit of time to read through as to like are there other. Is there an investment case beyond what's just happened more recently?

B (22:05)

Yeah. And it's so even in media, let's say in publishing podcasts or newsletters, you don't even know if it's going to last till tomorrow morning because things are moving so fast.

C (22:18)

Okay, so that's actually something that I have been saying too Is that like trim your, like I'm a big long term holder, you know, advocate. But in this, like you just said tomorrow it could just change in a minute. And so I always like if something moves really, really strong upward in my favor, I do want to trim that position a little bit.

B (22:40)

Fair enough. You have a S&P 500 price target of 7,500, last I checked, I think is about 12% higher from current levels. Are you still high conviction on that call?

C (22:54)

No, I, I'm going to spend some time, I haven't changed it because I'm trying not to be reactive of what's happening in the market this year. But we've just kind of been dribbling down all year it feels. So I'm going to be looking at the credit markets earnings expectations. I definitely wasn't the highest on the street, I'll tell you that when I put it out, but I think it's still possible. I just, I feel like a lot of good stuff is already in, in the numbers and that's like the question I always ask like anybody on my team and they'll say like, oh well this is coming and I'm like are you the only one that knows that

B (23:40)

you know, well the pushback even with Iran, geopolitical uncertainty, oil shock. My read on it is that the earnings story hasn't really changed and if you just base your calls on earnings, it's probably still pretty solid.

C (23:58)

Yeah. But earnings, like another thing that I feel like I say a lot is expectations are everything and if everybody already expects really strong earnings and those are achieved, where do we go from here? Like it's always about moving the bar higher. And so I kind of say that like if you think it's something like Nvidia with their earnings right. Like they have to beat by quite a bit to actually impress the market. And so I, I, it gets to that same place in, in earnings growth expectations as well. And that's why I start to get a little worried real quick.

A (24:39)

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 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.

B (24:57)

Let's get back to the interview. So I, I want to ask you about Robinhood and its role in one democratizing markets. Right. That's very well established at this point. Robinhood is pretty much the app and the brokerage that brought retail into markets at a big scale. But what do you think of the concentration risk or maybe the volatility risk that comes with that? If you have so many retail investors suddenly coming onto this platform and maybe competitor platforms, and they all buy Tesla, right? They all buy Palantir, Nvidia. Is there some type of retail risk there or concentration risk?

C (25:41)

I think we've been working really hard to meet our customers where they are. And our customers, they have grown up a bit. We have all generations, but our average age has risen a bit over time with our banking app, with our retirement, with strategies, with, you know, even our. We've launched custodial accounts for our, you know, our clients, kids. Now I just, I think like, we, we have a way of. We have, and we've got lots more plans. And so I think we're well aware of like diversifying the business. So as much as trading is still a core part of it, we do have those three pillars, which I'm sure you've heard Vlad talk about, which is making sure we take care of our active customer and then also share of wallet and really growing wealth and then international expansion. So I feel that we don't have too much concentration risk as a result.

B (27:02)

Okay, let me try to clarify the question because maybe I didn't say it the right way in previous, let's say, bullish bubbles. We see pushes to democratize access to markets. And I think that happened during COVID We saw it in 1929. There were a bunch of new products that hit the market in an effort to democratize retail investing in the 90s. In the 90s, do you think about that as investment chief at Robinhood?

C (27:41)

I see. So you're sort of asking like, will we, you know, all these products come out and then like we lose them

B (27:48)

because a crash happens or even Robinhood's role in rising risks in markets.

C (27:57)

I don't, I mean, I just, I. It's funny that you're asking me the question because I think about all the time how despite the risks that have come out in history from investing, I think, one, investors have never been more have an ability to be informed. Two, I think if you look back also in history, labor's share of income has only fallen for a multitude of reasons. And so if you're not working and investing, you cannot level up your wealth. You just can't. And so we can't let history be our guide there in terms of like, we need to continue to provide access and Expand that from a. With perspective. And so I just, I think it's too important for people in general.

B (28:59)

I think that's a good answer.

C (29:01)

Sorry, I didn't get it.

B (29:03)

No, no, no, I think you definitely answered the question. Okay, so when you, you know, if we were to sit here in a year, right, and we look back on 2026 and the market tanked 15% this year, what do you think had to have happened for markets to go negative?

C (29:30)

Something I would say maybe one of two scenarios that make me nervous. One that is probably a little less likely than the other. But I mentioned the private credit space. Just from the seat that I sat in for so long before I joined Robinhood, I saw how much money flew into private credit funds. And as time went on, the more money flows into something, and we've seen this over history, the less diligent things can become in terms of, like, the loans that were made and like the, maybe the pricing or like the, you know, wiggly ness of financials. Like, I think I truly believe that happens. And so I worry that so much money flew into that and, you know, to your point, they started making more and more funds for retail in this space. And I just think, I worry that some of the wobbles that you're seeing now are just the beginning. It was something an estimate of like $2 trillion in the private credit space. Our banking sector is like a $25 trillion. And the one thing is that the whole reason private credit came about is because after 2008, they decided banks can't get involved in these kinds of loans anymore. But they found their way in because you saw recently JP Morgan's like, we're not lending to these private credit funds anymore. So instead of doing the loans, they were lending to the funds. They're called NDFIs, non depository financial Institution Loans. And more happened outside the US Than here. But there's these other things called synthetic risk transfers, which was a way for banks to provide these loans, but then transfer the risk out and still keep to their capital ratios. So that's the things that make me nervous. And you have seen banks, you know, start to fall in price this year. And second thing is just the amount of deficit that our US government has, it has built up over the years. It's not, you know, any one political party that is to blame for this. It makes it a security risk for our country relative to other ones because we do rely on so many, you know, not just our own people, but outside the US to buy our debt and we just keep spending and we just seem to not be able to get out of our own way with that. And I do worry at some point that like our interest rates that we have to pay are going to go to the point where it's just really going to like hinder the ability of our whole country to grow.

B (32:22)

Those are two very real risks. And I've certainly spoke to a lot of investors who have pointed to those two things. Is there a way to position or to hedge against those? As a everyday investor,

C (32:41)

I for one don't think that long duration debt is very attractive. And so way, you know, if you do have to have a bond portfolio, kind of to me is like keeping it shorter term. You know, rates go up and down, you get hurt or helped by that. We certainly, we did really like owning regional banks because we thought that the spreads would stay wide and it would be beneficial and the fiscal policy would be helpful to a smaller bank. And we were right for a time. But then we started getting nervous about this whole thing and we, we sold that. I don't really know how to hedge other than to just really save. Like make sure you're saving in a diversified way. Because if for one, the private credit thing I think could end up being like, even if it does blow up contained, it will just impact sentiment and the market for a period of time. But the other one, I think it will hurt, it could hurt everybody. And for that you just like, if the value of your savings goes down simply because of this greater macro risk, you just want to save more to offset that. And that's why I said before, I just really feel people have to work and invest and save and spend only on the things that are meaningful to them in experiences in my opinion.

B (34:08)

I mean meaningful spending could be stocks, stocks going up, could be gold, could be bitcoin, but diversified in lots of assets, of course. So Steph, can you share a bit more about where people can find your work and maybe what you're working on next with Robinhood?

C (34:28)

Yeah, I write a blog every week called Investors Guild after my last name. You can find it on the app like learn.robinhood.com I also tweet and I'm on Instagram. It's Steph Guild nyc and you know, I occasionally on podcasts like yours and on broadcast TV and what we're working on next, you know, we really just want to, I really want to grow strategies and make sure that we can take care of as many people as possible. We put a lot of humanness in, into the product, because I think it's really important. There's a lot of people who know they should be investing and they don't know how. And this is a way to learn how to do it or to just let someone else take care of you. And the one thing that I was really focused on is continuing to deliver this kind of human touch, which I think becomes even more and more important in the age of AI. And so I leave messages for our clients whenever we make a change to portfolios, when there's something big that happens in the markets that we think is important to comment about, right in the app, right in their dashboard and specific to them and their portfolio. And that to me is just like it's so important in this current time where there's so many headlines that could bring you down totally. And we want to expand the types of strategies we have for different investors, like an income oriented one. And we want to expand our account types. Like we've will be launching managed trust accounts and really just making sure we can offer every kind of way for customers to get invested.

B (36:20)

So Robinhood Strategies is now managing 1.5 billion. Right. How many months did it take to get there?

C (36:27)

About 10, 10 and a half.

B (36:30)

10 and a half months. 1.5 billion. I mean, it's unbelievable. Is there a. I don't know, can you even project, like in three years, where is it going to be at?

C (36:41)

I mean, I hope we're at several tens of billions by then.

B (36:48)

Tens of billions. Okay, so I'm going to hold you to that.

C (36:51)

I just want to earn people's trust.

B (36:53)

Fair enough. Steph, I really appreciate you taking the time to tell us what you're working on. So we'll have to do it again soon.

C (37:00)

Yeah. Thank you so much. This is really fun.