HerMoney with Jean Chatzky – Episode 509
Expert Investor Karen Finerman’s Bold Bets (and Red Flags) for 2026
January 7, 2026

Episode Overview

In this engaging episode, Jean Chatzky welcomes back investment expert Karen Finerman to reflect on the market events of the past year, dissect her notable investing wins and missteps, and share her top advice for navigating the volatile, tech-driven markets headed into 2026. The discussion is candid, humorous, and rich with tactical insights aimed especially at women investors, with a key focus on how to keep perspective, see through market euphoria, and build a resilient portfolio.

Key Discussion Points & Insights

1. Lessons from Successful Women: Detours and Resilience

• Karen reflects on hosting "How She Does It": She shares what she’s learned from interviewing top women leaders—namely, “you don't end up where you think you're going to. You start somewhere. The path always changes. Some people end up in the most extraordinary places.” (03:39)
• Anecdotes highlight adaptation and resilience as recurring themes among high-achieving women.

2. 2025 Stock Market Review: Winners & Strategic Thinking

Google as the Standout Winner

• Biggest Winner: Google, against widespread pessimism over AI, antitrust, and cloud growth worries (05:43)
• Turnaround Story: “The rollout of AI was so bad in the last two years… yet they got their AI game together, and those fears about search being destroyed didn’t play out.” – Karen (05:43)
• Key inflection: Success attributed to a rebound in their AI rollout, relatively mild antitrust remedies, and strong YouTube and Waymo performance.

Staying the Course During Volatility

• Surviving Market Fear: During ‘Liberation Day’ market turmoil, Karen relied on the volatility index as her emotional anchor.

  “When the volatility index is in the 50s, that’s fear at its maximum. That has been a guide for me always… I am not selling my stocks when the volatility index is in the 50s.” – Karen (01:02, 07:54)

• Perspective from Experience: “The older you get, you’ve seen a bunch of these… however things are at this moment, they won’t always be like that.” – Karen (08:39)

3. Comparing Historic Bubbles: Caution in the Face of AI Euphoria

• Trimming AI Exposure: Karen tactically reduced exposure in October 2025 during signs of market euphoria.

  “This is just too much, too soon… The frenzied environment… burning money is reminiscent of 1999 and 2000.” – Karen (10:23)

• What's Different Today: Unlike the dot-com era, today’s largest spenders (Amazon, Microsoft, Meta, Google) have sustainable profits to fund innovation. But some unicorns (like OpenAI) are reminiscent of bubble risk:

  “Thank God they’re not public, because if they were, this could really topple the entire thing.” – Karen (11:41)

• Slowdown Ahead in AI Infrastructure: Data center build-out may decelerate due to financing and local resistance.

4. AI’s Broader Impact: Efficiency Gains For Non-Techs

• Banks as a Case Study: Karen highlights old-economy companies—mainly banks—leveraging AI for operational efficiency.

  “Banks operate on a pretty thin margin. If you can improve your expenses dramatically [with AI], that’s going to have a very big impact on your bottom line.” – Karen (12:55)

• Jean underscores AI’s value lies in practical improvements, not hype.

5. Honesty in Investing: Misses, Mistakes, and Lessons

Dell: Underwhelming in AI

• “Dell was up about 10%, which is terrible relative... huge backlog, but margins were less than hoped for… The street does not like to be disappointed.” – Karen (16:34)
• Karen remains optimistic, but admits to being too early and overly bullish.

Zillow: Impacted by Housing Market Slump

• Slow real estate transactions and an FTC suit weighed on performance; Karen notes she overestimated the resilience of Zillow’s new rental businesses. (18:42)
• On emotional attachment:

  “What a mistake I make again and again is getting too emotionally connected to stocks.” – Karen (20:01) “You can sell it… There’s an objectivity that you get from not owning something.” – Karen (20:25)

Abercrombie: Poor Trade Management Despite Fundamentals

• Early, aggressive buying led to painful drawdowns.

  “That really turned what could have been an outstanding trade into… yeah, okay, that was nice.” – Karen (20:53)

6. Navigating Geopolitics, Macro Risks, and Sector Rotations

• Venezuela’s oil news spurred a market rally—but Karen sees it as overblown:

  “It’s not that big a deal… Those companies that do the nuts and bolts, the guts of exploration and production and drilling—those companies were up a lot more because that whole infrastructure of Venezuela’s oil machine needs to be rebuilt.” – Karen (23:48)

• Jean raises uncertainty around tariffs, inflation, and global instability; Karen stresses the importance of looking past headlines to focus on fundamentals.

7. 2026 Outlook & Portfolio Guidance

Diversification and Inertia

• Karen cautions against overhauling your portfolio just because of the calendar change:

  “I don't look to sort of remake the whole portfolio because the calendar changed… I don’t think anything really has changed so much.” – Karen (27:08)

• She sees compelling tailwinds for banks, driven by deregulation and AI-driven efficiency.

AI: At an Inflection

• Core AI players are in flux; infrastructure build-outs may slow.

  “I think that company OpenAI really lies at the heart of the health of the AI business... I don't actually think the underlying business supports [an IPO] at the moment.” – Karen (29:09)

8. What Investment Club Members Got Right

• The HerMoney Investing Fix club diversified smartly, weighed decisions judiciously, and often outperformed Karen’s own picks.

  “Collectively they’ve made very wise decisions… and they’ve done a better job on a number of names than I have. So that’s great to see.” – Karen (31:30)

• Members’ eagerness to learn and willingness to debate various industries stood out.

Notable Quotes & Memorable Moments

• On fear and market volatility:

  “When the volatility index is in the 50s, that’s fear at its maximum. I am not selling my stocks when the volatility index is in the 50s.” – Karen (01:02, 07:54)

• On emotional pitfalls:

  “What a mistake I make again and again is getting too emotionally connected to stocks.” – Karen (20:01)

• On perspective:

  “However things are at this moment, they won’t always be like that.” – Karen (08:39)

• On the difference between 2025 and the Dot-Com Bubble:

  “Unlike 1999, these guys have the money to spend. It could end up at that public euphoria, yes, but for now, it’s different.” – Karen (11:02)

Key Timestamps

• 02:03 — Karen’s take on using the volatility index to control emotions in turbulent markets
• 05:43 — Deep dive on Google as the standout winner
• 07:54 — How Karen stayed the course during market panic
• 10:23 — Why she trimmed back on AI stocks in late 2025
• 12:55 — How banks could use AI to drive new efficiencies
• 16:34 — Discussion of misses, starting with Dell
• 18:42 — Zillow’s challenges and Karen’s reflection on emotional investing
• 20:53 — Abercrombie trade mismanagement and lessons learned
• 23:48 — Interpreting the market’s reaction to Venezuela and energy/infrastructure stocks
• 27:08 — Approaching portfolio changes in the new year, focus on banks and deregulation
• 29:09 — AI outlook, data center buildout, and thoughts on OpenAI
• 31:30 — Investing Fix club’s successes, what members did right

Conclusion

This episode delivers a blend of market savvy, humility, and encouragement, especially for women looking to take charge of their financial futures. Karen’s clear-eyed, sometimes self-deprecating take on the highs and lows of investing, paired with actionable guidance, offers practical wisdom for investors facing a year of uncertainty and opportunity.