Markets Wrap: From YOLO to HALO

Summary

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Merryn Talks Money — “Markets Wrap: From YOLO to HALO”

Host: Merryn Somerset Webb
Guest: John Stepek, Senior Reporter at Bloomberg
Date: February 26, 2026

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Episode Overview

In this concise and insightful Market Roundup, Merryn Somerset Webb and John Stepek dissect the week's most significant market trend: the pivot from ‘YOLO’ (You Only Live Once) investing to ‘HALO’ (Heavy Assets, Low Obsolescence) stocks. Their candid exchange explores why investor sentiment is abruptly shifting away from frothy tech and AI companies toward tangible, asset-heavy businesses — and what this means for valuations, risk, and portfolio strategy in an era of stubbornly higher interest rates.

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Key Discussion Points & Insights

1. Defining ‘YOLO’ vs. ‘HALO’

• YOLO Investing:
  • Merryn and John define YOLO as the high-risk, high-hope approach typified by piling into software and AI firms, fueled by the belief that "you only live once" and should chase the next big winner.
• HALO Explained:
  • Merryn: “HALO is Heavy Assets, Low Obsolescence. I wish they'd stopped chucking this stuff out. Endless acronyms.”
  • The term is traced to a JP Morgan analyst, though now everyone’s claiming it (03:00).

2. Why the Big Shift?

• AI Optimism Gives Way to Jitters:

  • Recent software hype climaxed with Anthropic’s product launches and an alarmist note by Citrini Research warning of an AI-induced economic doom spiral (03:43).
  • John: “Regardless of whether it actually caused the sell off or if it was something else, it certainly got the blame for a significant sell off on Monday. It sort of shows you how jittery everyone is about this.”

• Valuations and Sentiment:

  • Merryn argues that what triggers a tech selloff doesn’t matter as much as the inevitable retreat from overvalued stocks:
    • “If you have an environment where a particular group of stocks are very expensive, in the end they'll stop being so expensive. And it can be triggered by pretty much anything under the sun.” (04:26)

3. From Asset-Light to Asset-Heavy

• Changing Business Models:

  • Tech darlings—once asset-light, high cash flow machines—are becoming more asset-heavy as AI requires vast infrastructure investments.
  • Merryn: “We've gone from asset light to asset heavy and you don't pay as much for asset heavy companies...” (06:34)

• Speculative Investment Risks:

  • John: “It's one thing if BP turns around and says, all right, we found a load of oil... But these guys are saying, okay, there's an uncertain amount of AI required and it's going to be of uncertain profitability, but we're still going to splurge...” (07:25)
  • He notes the unknowns in private funding channels and potential system vulnerabilities.

4. Interest Rates: The Real Underpinning

• End of an Era:
  • John: “A lot of it is about... the market still going through this wake up process of having got used to being at 0% interest rates... The normalization in 2022 was permanent. We're not going back to zero percent.” (11:42)
• Why It’s Taking So Long:
  • Merryn: “I thought that would be a six month process, but it's not, it's years.” (12:31)
  • John: “Momentum's a really powerful factor and I also think that the longer something's going on, the harder it is for people to change their minds.”
  • Additionally, the arrival of new AI optimism after 2022 briefly “gave everyone an excuse to go back to the old way of thinking.” (12:52)

5. Investor Psychology: The Lure of Expensive Stocks

• The ‘Lottery Ticket’ Mentality:
  • Merryn quotes a contemporaneous report:
    • “They like owning expensive stocks because they have lottery like payoffs. They are fully aware the stock is expensive but they invest in it anyway because they think the share price will go up even further and no amount of data will convince them otherwise.” (14:44)
  • John is skeptical: “That argument is used for everything... doesn't sound Like a good reason for buying.” (14:47)
• Perceived Safety and Herding:
  • Merryn: “It's popular supremacy. I'm buying the best stocks. Everyone please see my column on that from last week. This does not work, but the majority of people say perceived lottery because it might go up a lot more. That's why the market is not efficient.” (15:09)

6. From Software to Stuff: The Case for Materials and Infrastructure

• Metals as the New Core Assets:
  • In a memorable closing exchange, Merryn quizzes John:
    • Merryn: “How many different metals do you think are required to make one server?”
    • John: “I'm gonna just take a random guess at 12.”
    • Merryn: “30.”
  • Merryn’s punchline: “So why would you pay more? Why would you pay more for a share in a company that needs desperately to have those metals or the company that in an environment of relative supply shortage, produces those metals?” (16:08)

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Memorable Quotes & Timestamps

• On market psychology:
  • Merryn: “Once everything becomes more emotional than fact based, then this always happens.” (04:26)
• On asset-heavy transitions:
  • Merryn: “You don't pay as much for asset heavy companies. And you don't pay as much for companies that are constantly having to invest as you do for companies that are simply cash flow machines.” (06:34)
• On market inefficiency:
  • John: “Markets just aren't that efficient compared to what we might have thought.” (13:50)
• On metals and real assets:
  • Merryn: “So why would you pay more for a share in a company that needs desperately to have those metals or the company that...produces those metals?” (16:08)
• On the ongoing challenge:
  • Merryn: “How many medals can you name? It's really very important.” (16:43)

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Noteworthy Segments & Timestamps

• Defining YOLO and HALO: [02:29]
• The recent AI-triggered tech selloff: [03:43]
• Valuation resets and emotional markets: [04:26]
• The shift from asset-light to asset-heavy tech: [06:34]
• Risks around speculative investing and private market unknowns: [07:25]
• Interest rates and the prolonged adjustment in market thinking: [11:42]
• Why people love expensive stocks (‘lottery ticket’ thesis): [14:44]
• The metals question—why ‘real stuff’ is back in fashion: [16:02-16:43]

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Tone & Take-Home Messages

• Conversational and Witty: Both hosts blend market savvy with self-deprecating humor.
• Skeptical but Pragmatic: They question easy narratives, stress the importance of fundamental cash flows, and caution listeners not to chase hype.
• Actionable Question: Listeners are challenged to think about “how many metals you can name” — a metaphor for re-engaging with real-world economic drivers.

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Bottom Line

This fast-paced episode demystifies the sudden market rotation, highlights how higher rates and AI realities shake up valuation models, and reminds investors to follow the flow of capital from hope-driven stories to the hard assets that power the real economy.

Merryn’s call to action: Think about the materials behind all the tech — and consider if it isn’t wiser to own the building blocks than the dream.

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Show note link for the referenced Pamya Labirum report will be posted, as promised.

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Transcript

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[Maren Sumset Webb]

Welcome to the maritalks Money Market Roundup where we talk about the biggest moves in markets this week and what's driving them. I'm Maren Sumset Webb, Editor at Large for Bloomberg UK wealth. And as ever, I am joined by John Stapek, Senior Reporter at Bloomberg and author of the award winning Money Distilled newsletter. I've made it absolutely clear for people who've only joined us relatively recently that I too have many, many awards. Many awards.

[John Stapek]

Probably more, actually.

[Maren Sumset Webb]

I'm older than you.

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Yeah.

[Maren Sumset Webb]

Anyway, listen, there's only one topic this week, John, and we haven't got long today, so we're just gonna dive right into it. We are YOLO to Halo, right?

[John Stapek]

YOLO to Halo. This is great. Tell me what those well, we know what YOLO stands for, but what does Halo stand for? I've temporarily forgotten okay, well YOLO is you only live once, so bye. And Halo is heavy assets.

[Maren Sumset Webb]

Heavy assets, low obsolescence. I wish they'd stopped chucking this stuff out. Endless acronyms. Anyway, this One comes from J.P. morgan, I think. Halo, doesn't it?

[John Stapek]

I think so, although I read it.

[Maren Sumset Webb]

But now everyone claiming it, just like everyone. Do you remember when we invented the phrase physical bitcoin gold? The next thing we knew, everyone was using it without any attribution. That's what's happening.

[John Stapek]

Should have copyrighted that.

[Maren Sumset Webb]

One analyst over at JP Morgan with, with Halo. So what's happening is that people are looking around and going, gosh, you know, we're paying an awful lot for hope when it comes to things related to AI software companies, et cetera, et cetera. We prefer not to pay so much for hope anymore. We'd prefer to bird faith for real stuff. So we're going to dump all that software and AI related nonsense and we're going to buy, oh, I don't know, mines, metals, any company that can show it's already invested in its infrastructure and that that infrastructure is going to continue to work long term. Is that a reasonable summary?

[John Stapek]

Yeah, I think that is a reasonable summary and I think it's interesting partly because the market really has latched onto this in the last month or so because first we had AI Anthropic releasing all of those software products and really hitting some of the big names very, very hard. And then this weekend a company called Citrini Research, who just do research notes, released this apocalyptic but basically sci fi scenario about how AI could trigger an economic doom spiral. And certainly regardless of whether it actually caused the sell off or if it was something else, it certainly got the blame for a significant sell off on Monday. So it sort of shows you how jittery everyone is about this.

[Maren Sumset Webb]

I mean, I suppose it doesn't really matter in the end. What sparks a sell off, is it, I mean if you have an environment where a particular group of stocks are very expensive, in the end they'll stop being so expensive. And it can be triggered by pretty much anything under the sun. And maybe it was triggered by this note, maybe not. But you know, once you get once everything becomes more emotional than fact based, then this always happens. In the run up to this we've listened to endless stories about AI which have been very positive. You know, the spread of AI will increase productivity across the board forward, it'll increase everybody's earnings. It will, it will add to the US dominance over global stock markets and the global knowledge economy, etc. Etc. And now we find, now we find that in fact AI kind of eats itself a little. And so in fact when knowledge goes from being very expensive to, as a result of, of the evolution of AI, to going to be from very expensive to being either completely free or very cheap, who wants to be in the knowledge economy? You don't want to be in the knowledge economy. You want to be in the, well, the infrastructure and the real stuff economy that backs up the knowledge economy.

[John Stapek]

Yeah, and I guess that's the thing because it's easier to, rather than worry about picking the winners and losers, you just go straight for the things that aren't going to be affected or are going to be affected because everyone needs more electricity, basically. And that makes a lot of sense. And that's a really good point of evaluations because I was looking just before we came on, you know, stocks like in, like UK listed stocks like Experian and LSE and Relics that all got hit hard by the initial kind of software panic. Yeah. One of the things you sort of realize is that, I mean they were all trading on PEs of you know, high 30s and 40s and you're, you know, they're now down in sort of like 20s, which is more reasonable. Ish. But you know, those were very high multiples. So a lot of it is about people going, oh, hold on a minute, I'm paying. This may be a good company, but that is a hell of a lot to be paying for it anyway. So yes, that point about this being an excuse as much as anything else is kind of very fair, I think

[Maren Sumset Webb]

so John, it's partially about that. It's partially about this idea that if you've relied on expensive knowledge to support your valuation and now knowledge may not be as valuable after all, it's partly that, but it's also about the shift from asset light to asset heavy. We've always looked at these companies, historically Amazon, Google, Meta, et cetera, as being incredibly asset light companies. They don't have to spend big money to build an infrastructure to produce their product. That's not a thing. And so they've always been very, very high cash flow companies. And now they're looking around and going, well, actually these are beginning to look like really sort of asset heavy companies. They've really got to invest in energy and power and you know, there's just a lot of money pouring into what comes behind the spread of AI. So we've gone from asset light to asset heavy and you don't pay as much for asset heavy companies. And you don't pay as much for companies that are constantly having to invest as you do for companies that are simply cash flow machines.

[John Stapek]

Yeah, especially because this is speculative asset investment. Ultimately, it's one thing if BP turns around and says, all right, we found a load of oil and if we spend this much and we get the oil at this price, then we're going to make this much money. But these guys are saying, okay, there's an uncertain amount of AI required and it's going to be of uncertain profitability, but we're still going to splurge a trillion dollars on building the capacity because we're pretty sure that it's going to work out at some point. That's the sort of future that I feel needs quite a high discount rate applied to it. And I think the markets can awaken up to that. And then there is the deeper worry about where's all this money coming from and how much of it is in the private market rather than the public market. Obviously that's not so much the case for the hyperscalers, but for all the kind of little companies that are on the side of this, a lot of them are raising money via private credit in various other ways. And it's not that clear how much of that there is or where the choke points are or where the vulnerabilities are. Which is yet another reason to be mildly weary of what's going on there.

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[Maren Sumset Webb]

Do you think, John, this is also partly about interest rates?

[John Stapek]

I think it's very much about interest rates. A lot of it is about, I guess the market still going through this wake up process of having got used to being at 0% interest rates from 2010 up to right up to 2021. Starting to take that for granted and not quite realizing that the normalization in 2022 was permanent. We're not going back to zero percent. I think it's taking a good few years for the market to start to really begin to acknowledge that and price it in. And actually, I mean this is part of the process of pricing that in a higher interest rate environment. The HOPE stocks, the YOLO stocks just aren't as attractive.

[Maren Sumset Webb]

Yeah, it's just amazing how long this has taken, isn't it? I mean, I suppose we, I don't think either of us really believed the transition period, the bit when people would go actually interest rates aren't going back to zero. They're gonna knock around 3, 4% and I need to change the way I invest as a direct result of that. I thought that would be a six month process, but it's not, it's years.

[John Stapek]

I think it's partly. Well, I mean, I think momentum's a really powerful factor and I also think that the longer something's going on, the harder it is for people to change their minds. I think also it was happening in 2022, but then AI gave everyone an excuse to go back to the old way of thinking. And that is interesting because I mean when ChatGPT came out it was cool, it could make up little poems for you and stuff like that, but it was very much kind of a toy. Whereas now it is really pretty impressive what it can do. Even as someone who is, as I said, not skeptical, but hardly an early adopter, I can see the value in it. But of course as that's going on and it's evolved, it's also getting to the point where people are going, well wait a minute, what if this destroys all of these businesses that we previously thought were either going to benefit from it or use it to leverage their IP or whatever. So no, it's been a really interesting process and all I can say is markets just aren't that efficient compared to what we might have thought.

[Maren Sumset Webb]

I know, we think they are and they aren't. Now listen, one more thing I wanted to point towards. There's a little report came to me today from Pamya Labirum about the thought of the day and the question is why do people invest in expensive stocks, which I think you and I have talked about a lot. Why? Why do you invest in these expensive things? You can see they're expensive, you know, what happens when you invest in expensive stuff, etc. Etc. Anyway, he's written about this. Why is it that people continue to do this? And the answer is they like owning expensive stocks because they have lottery like payoffs. They are fully aware the stock is expensive but they invest in it anyway because they think the share price will go up even further and no amount of data will convince them otherwise.

[John Stapek]

How's that a lottery like payoff?

[Maren Sumset Webb]

Well, because every now and then one of them will go up a lot more.

[John Stapek]

I feel that argument is used for everything. It's used for why people invest in AIM stocks as well. And it makes more sense there because to me it's like, well, you get about a one in a thousand chance of making any money and you're probably going to get shot, you know, otherwise. But that doesn't sound Like a good reason for buying.

[Maren Sumset Webb]

So there's the reasons given. Perceived safety.

[John Stapek]

Yes. Safety in numbers. Definitely.

[Maren Sumset Webb]

It's popular supremacy. I'm buying the best stocks. I'm buying the best stocks. Everyone please see my column on that from last week. This does not work, but the majority of people say perceived lottery because it might go up a lot more. That's why the market is not efficient.

[John Stapek]

Yeah, I was going to read that study and I'll go and read that study in more detail because I will.

[Maren Sumset Webb]

I will send it to you. In fact, I'll tell you what, I will also pop it onto the show notes. I know we always say we do that. We often forget, but we're not going to forget today. We'll actually do that.

[John Stapek]

Now.

[Maren Sumset Webb]

Listen, this was always going to be a very short podcast, so I'm gonna finish it there. But asking one question for you, John, before we close. Based on this whole idea of moving from soft stuff to hard stuff, how many different metals do you think are required to make one server?

[John Stapek]

I'm gonna just take a random guess at 12, 30. 30.

[Maren Sumset Webb]

30. So why would you pay more? Why would you pay more for a share in a company that needs desperately to have those metals or the company that in an environment of relative supply shortage, produces those metals?

[John Stapek]

I'm trying to think if I could even name 30 metals.

[Maren Sumset Webb]

That's a different challenge.

[John Stapek]

I was just saying that I have

[Maren Sumset Webb]

not got time for you sitting there naming all the metals that you learned about in chemistry at school today. That's not happening.

[John Stapek]

That'd make a great podcast. Wait on it. No, it totally wouldn't.

[Maren Sumset Webb]

But, you know, challenge. Challenge for listeners. Challenge for listeners. John, I'm going to close this now, but John is now going to sit here and think to himself about 30 medals. In fact, we'll do this together. John, we got five minutes. But the rest of you, once I close this, think to yourself, how many medals can you name? How many medals can you name? It's really very important. Thanks for listening to this week's Marian Talks Money debrief. If you like our show rate, review and subscribe. Wherever you listen to podcasts and keep sending questions or comments to marenmoneyloombug.net you can also follow me at marionsw on X& John on Stepek. This episode was hosted by me, Marin Sums up Webb. It was produced by Moses Andam and Sama Saadi. Now, we would be fascinated to know how many medals you can name without looking it up. So let us know on Twitter where you got to. And we will let you know where we got to.

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