Is the “Santa Rally” Cancelled This Year?

Summary

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Motley Fool Money: “Is the ‘Santa Rally’ Cancelled This Year?”

Date: November 14, 2025
Host: Travis Hoyam
Analysts: John Quast, Emily Flippin
Theme: Assessing market pessimism heading into year-end, the impact of layoffs, debt-fueled AI spending, and how investors can respond amid uncertain prospects for a traditional “Santa Rally.”

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Episode Overview

This episode investigates whether the stock market’s usual year-end “Santa Rally” is off the table for 2025 amid rising fears, a declining S&P 500, weak consumer data, layoffs, and the growing influence of AI and tariffs. The analysts weigh short-term risks against long-term opportunity, give tactical advice for investors, and offer insight into how shifting risk is impacting both equities and the bond market. They also play “Calls and Puts,” debating which stocks they're most bullish and bearish on right now, and wrap up with thoughts on strategic streaming M&A and their top stocks on the radar.

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Key Topics & Insights

1. Has the Market Peaked for 2025?

• Debate on the 2025 Highs
  • Travis frames the main question: with the S&P down 6% off October highs, are these just jitters or signs of deeper problems?
  • Emily notes a growing disconnect between market performance and on-the-ground consumer sentiment and corporate results (01:23):

    “It feels like, with so few trading days left in the year, it's unlikely that the market could go higher from here, given all the headwinds.”

  • She points to increasing layoffs, illustrated by Paycom's earnings and its own internal cuts, questioning how much AI is real driver versus a convenient excuse for belt-tightening (01:45).
  • John connects fear-driven market reactions to the “boiling frog economy” metaphor and the “fear and greed index” flashing red for a month (04:44):

    “Even though we've had a great year for stocks ... investors are looking for reasons to be afraid and it can kind of become this self-fulfilling prophecy.”

Memorable Quote:

• Emily (03:47):

  “These quarters of, like, everything and the kitchen sink ... I don't feel like the bad news is all encompassed in these quarters. I actually feel like it's more this trickle-through thing.”

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2. Investor Psychology & Actionable Advice

• Panic or Patience?
  • Emily stays the course:

    “I’m not actually doing anything differently. ... Nobody knows how the market is going to perform in the short term.” (07:36)

    • Reiterates not investing money needed in the next 3-5 years and advocates steady, periodic investing regardless of market level.
  • John admits to a high cash balance (17%), citing the “psychological benefit” of dry powder:

    “It’s really exciting to be able to invest in high-quality businesses trading at a discount ... if you don't have cash in the portfolio ... it’s psychologically difficult.” (09:16)

  • Travis highlights the importance of rationality through both good and bad markets, referencing 2001-2002 and 2007-2008 bear markets (10:48).

Notable Exchange:

• John (06:30):

  “So many things were actually pretty much the same, but what had changed was our feelings ... that does happen in business where you are not feeling great about what you're seeing. And so then you start adjusting your business accordingly.”

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3. Bond Market & AI Debt Risks

(12:23)

• Travis raises alarm over Oracle’s 30-year bonds dropping sharply (falling 8%, yield jumping to 6.7%), suggesting “maybe this AI trade ... is maybe a little bit riskier than we thought.”
• Emily attributes Oracle’s move more to its questionable capital allocation and huge debt loads to fund AI ambitions, rather than a broad bond market canary (13:19):

  “Oracle is paying a ton of debt to fund this AI ambition and maybe doesn't have the best track record ... I think lenders are just catching on.”

• John notes massive, ongoing capital needs for AI infrastructure—"deploy more GPUs, more data centers, more power"—and highlights the staggering electricity demands articulated by Sam Altman (15:48):

  “Sam Altman ... wanting 250 gigawatts of electricity by 2033 ... as much as India.”

• Emily pushes for investors to scrutinize not just expected AI ROI, but also the real cost of capital (16:42):

  “Maybe we should all be thinking a little bit more about the ... cost of our debt financing ... As an equity investor myself, I actually think that there's a massive opportunity cost that exists ... I as an investor like to see more than 10% [ROI].”

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4. Calls and Puts Game

(21:13) Travis challenges Emily and John to pick long (call), short (put), or neutral positions from baskets of three stocks, in a nod to Michael Burry’s closing hedge fund.

Basket 1: “Growth at What Cost?” – Axon, Zillow, Spotify

• Emily:
  • Long: Spotify (“Plenty of room to run.”)
  • Put: Zillow (“Legacy position ... never quite panned out.”)
  • Neutral: Axon
• John:
  • Long: Axon Enterprise (“Visionary leadership, large market.”)
  • Put: Zillow (“Real estate ripe for disruption, not sure they’re the disruptor.”)
  • Neutral: Spotify

Basket 2: “Are Consumers All Right?” – Celsius, Monster Beverage, Dollar General

• John:
  • Long: Celsius (“Growing brand; big upside with Alani Nu.”)
  • Put: Monster (“David over Goliath.”)
  • Neutral: Dollar General
• Emily:
  • Long: Dollar General (“Set up well over next 3–5 years.”)
  • Put: Celsius (“Still skeptical about large acquisitions, faddish energy drink market.”)
  • Neutral: Monster

Basket 3: “Why Aren’t These Better Businesses?” – Unity, Roku, Airbnb

• Emily:
  • Long: Roku (“People don’t understand the business ... ramp up in free cash flow.”)
  • Put: Airbnb (“Too slow to innovate, left a lot on the table with services.”)
  • Neutral: Unity
• John:
  • Long: Airbnb (“Unsinkable brand, lots of free cash flow, optionality.”)
  • Put: Roku (“Engagement rising, monetization not keeping pace.”)
  • Neutral: Unity

Quick Side Debate:

• Roku’s under-monetization, international expansion (32:00):
  • Emily: “International viewers monetize at a lower rate.”

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5. Streaming Wars & Media M&A

(34:28, 35:19)

• Warner Bros. Discovery is up for sale—who needs it most?
• Emily: Paramount was first to bid, “offering some of the weaker streaming offerings” and needs the Max/HBO library to drive growth. But Netflix buying WBD would be a “genius defensive move”:

  “For Netflix to get HBO ... a great content library ... pushing out competition ... I hope Netflix goes for it as a shareholder and as a viewer.” (36:32)

• John forecasts a “return to streaming cable”:

  “We’re heading towards streaming cable, essentially ... not so important to be number three streaming individual service because you’re going to wind up in the bundle.” (37:17)

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6. Stocks on Their Radar

(38:47, 40:21)

• Emily: Disney (DIS)
  • “Misunderstood business,” strength in parks, experiences, ESPN outweighs overhyped streaming narrative.

  • “Quietly under the water, Disney is just steadily improving its profitability picture in terms of its highest margin segments.”

• John: Sea Limited (SE)
  • Three units: Garena (gaming), Shopee (e-commerce), Moni (fintech); “balanced profitability with growth” and has a strong cash position.

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Notable Quotes & Timestamps

• Emily (03:47): “These quarters of, like, everything and the kitchen sink ... I actually feel like it's more this trickle-through thing ... through the fourth quarter and maybe into the first quarter of next year as well.”
• John (04:44): “Even though we've had a great year … investors are looking for reasons to be afraid and it can kind of become this self-fulfilling prophecy.”
• Emily (07:36): “I’m not actually doing anything differently … nobody knows how the market is going to perform in the short term.”
• John (09:16): “There’s a psychological benefit that can come from having some cash in a portfolio ... it makes me feel good about the bear market rather than panicking.”
• Emily (13:19): “Oracle is paying a ton of debt to fund this AI ambition ... I think lenders are just catching on to the level of risk associated.”
• John (15:48): “Sam Altman ... wanting 250 gigawatts of electricity by 2033 ... that's as much as the country of India.”
• Emily (16:42): “We should all be thinking a little bit more about the ... cost of our debt financing ... As an equity investor, I actually think that there's a massive opportunity cost.”
• John (37:17): “We're heading towards streaming cable … all these services, they're trying to make us bundle … essentially we're heading towards a streaming cable in the future.”

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Important Segment Timestamps

• Market Outlook & Investor Mindset: 00:40–11:18
• Bond Market, AI Debt, ROI: 12:23–19:58
• Calls and Puts Game (Stock Debates): 21:13–32:55
• Streaming Wars Discussion: 34:28–38:47
• Stocks on the Radar: 38:47–41:39

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Summary Takeaway

The usual “Santa Rally” looks unlikely this year as investor sentiment shifts from extreme optimism to pervasive fear. Yet, the team’s consensus is to stick to long-term investing strategies—don’t try to time the market, mind your cash needs, and seize bargains if you can. AI’s hype cycle is shifting from limitless promise to hard questions about returns, costs, and sustainability, as seen in both soaring debts and bond market warnings. The streaming landscape’s coming consolidation could echo the old cable model. Despite short-term jitters, attractive opportunities remain—if you keep your head and think past the headlines.

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Transcript

[A]

Stocks are falling, but is this an opportunity or are we going lower? Motley Fool Money starts now.

[B]

Everybody needs money.

[A]

That's why they call it money. But you can give them to the buzz and be that.

[C]

From Fool Global Headquarters, this is Motley Fool Money.

[A]

Welcome to Motley Fool Money. I'm Travis Hoyam, joined by John Quast and Emily Flippin. There's a lot going in the market on in the market right now. The stock market S&P 500 down about 6% since its high in late October. So I wanted to kind of get a pulse on what is going on and ask the big question, is the top for 2025 already behind us? Look, there's a lot of data coming in. We've been talking about artificial intelligence all year, tariffs. But restaurants are weak. Consumer spending is struggling. We're hearing more and more about layoffs. Housing isn't necessarily affordable. Emily, have we seen the top for 2025? Is there not going to be this Santa rally that we talk about? How should investors be thinking about this moment right now?

[C]

Well, for so many investors, it probably feels like reality is catching up to the market because there's been this difference between how investors and consumers have been feeling vers vs what the market has been experiencing. So it does feel like to me, with so few trading days left in the year, that it's unlikely that the market could go higher from here, given all the headwinds that you just mentioned. You know, one of the company that I follow pretty closely is a business called paycom. They manage payroll processing and they reported earnings earlier this week. But one of the things that Paycom noted is obviously as a payroll processing company, they depend pretty heavily on how many times companies are processing their payroll. So if companies are going through stuff like layoffs, that has a tangible impact on their business, and they're seeing that firsthand as companies go through these kind of like late layoffs into this part of the year. We talked about it last week on the show, but employers typically don't like to lay people off this late into the year because it's a bad look to do so during the holidays. But this year tends to be or seems to be the exception. And even Pay Con themselves are going through the process of laying people off. And it seems like AI is this broad excuse for why people are doing that. It's kind of like, oh, well, we're automating. But in reality, I have to wonder how much of that is actually true. If there already wasn't a lot of influx of hiring coming out of the pandemic and if companies aren't already looking to just kind of cut cost right now, it seems like given the economic environment we're living in, it makes a lot of sense that layoffs are happening right now. We probably haven't seen the worst of tear offs inflation, tariffs. Inflation is still a big question mark. And heading into what seems to be a potentially weak holiday season, I'm not surprised at all that the market is finally down.

[A]

It's interesting you mentioned tariffs. One of the comments that I continue to see in earnings calls is this was the first quarter that we really saw the full impact of tariffs. Emily, I just, I want to get your quick thoughts on this. Reminds me of the moment you change CEOs. So you fire the old CEO and the new CEO comes in and they just do all of the bad things that the old CEO wanted to do. So but maybe, you know, it, it was coming, the holidays were coming up or whatever and it kind of gives an excuse to sort of clean the slate. Is that maybe a way to think about this is that AI is, is kind of an excuse to say, you know what, we really wanted to cut our workforce by 10% but we didn't have a great excuse and now we can kind of blame AI.

[C]

Yeah, these quarters of like everything and the kitchen sink, let's just throw all the bad news off at once. But the problem is is that I don't feel like the bad news is all encompassed in these quarters. I actually feel like it's more this trickle true thing where I'm getting a little bit of the bad news. And if it was a case where we're blaming AI and we're getting it all done in the third quarter and then fourth quarter is going to shape up to be a lot better. I would agree, Travis, but I actually a little bit worried that we're going to see a continuation of this not just in the third quarter results that we've for the most part already seen, but through the fourth quarter and maybe into the first quarter of next year as well.

[A]

Yeah, Lou's been calling this a boiling frog economy for months. John, do you think that we've kind of hit the top, the peak of optimism in the market at least? You know, we're kind of through the third quarter. We're not going to get a ton of data and we may not get much economic data from the government over the next few weeks, but does that mean that we're going to kind of be on a risk off trade for the rest of the year?

[B]

Yes, Travis, I think that's probable. I think we have probably already seen the top for 2025. But let me preface that. I'm talking about for the market. I think that individual companies could still see new highs before the end of the year. But then again, we're only Talking about roughly 30 trading days left in this year. And I trust my predictions for 30 days as much as I trust a coin flip. I mean really, anything can happen over the short term. Right. But I would say perhaps we have already seen the high for 2025 just because of something that. Emily, you and I were talking on the show last week. There's the fear and greed index out there and it's been pegged on fear or extreme fear now for over a month. Even though we've had a great year for stocks and relatively speaking stocks are close to all time highs, it seems like investors are looking for reasons to be afraid and it can kind of become this self fulfilling prophecy. You start looking for everything to worry about and there are some things out there to be concerned about. And so then it starts to really stoke those fears. And perhaps we have already seen the high for that reason.

[A]

John, do you worry that it's not only a self fulfilling prophecy for the market, but also for companies? I remember in 2007, 2008, I was sitting in a meeting that the CEO of 3M was leading and they were just starting to announce layoffs and he just basically said, I don't know how bad this is going to get, so I'm going to kind of cut as much as I can. It almost seems like investors have been doing that at least over the past couple of weeks. We don't want to panic over a few percentage point move. But if this does become a snowball, not only in the markets but also for companies, that's where things could get kind of tough pretty quickly.

[B]

Yeah. There is a great section of author Morgan Housel's book the Psychology of Money. He talks about if an alien was to come down to earth and look at the economy right before the Great Recession and then come down again during the Great Recession, what would that alien actually see that was different with the economy that so many things were actually pretty much the same, but what had changed was our feelings about those things. And that does happen in business where you are not feeling great about what you're seeing. And so then you start adjusting your business accordingly. I think that that is very possible.

[A]

All right, Emily, I want to start with you and sort of how investors should be acting today. What's the actionable insight? Let's say that we have hit a top for 2025 and we actually go through a big drop. The market falls 30%. We hit almost 20% in April, but let's say we fall a total of 30% from the high. How are you preparing for that possibility? Are you raising cash? Are you shorting anything? Are you planning to add stocks? Are you in panic mode? What is your mindset going into this moment?

[C]

Yeah, that's a great question. And let me start off by saying I acknowledge that my first thoughts when talking to you earlier, Travis, was of course I don't think there's going to be a rally towards the back half of the year, but want to also acknowledge there could be. And that's part of the reason why my answer to your question is I'm not actually doing anything differently. And, and that's part of the reason why, regardless of what my personal feelings may be about the short term implications for the market, the reality is that nobody knows how the market is going to perform in the short term. If you had asked me the same question at this point last year, I would have said the market's gotten away from the fundamentals. I think the next year is probably going to be a weak year of performance. And if I had changed my investing strategy as a result, I would have potentially, potentially missed out on an incredible year of market gains, at least as S&P 500 has performed. So I don't mean to sound dismissive in my response. In fact, it's actually the opposite. But I'm actually not doing anything differently. The truth is that even if we do experience a drop of, say, 30% over the course of the next month, that doesn't actually change anything for me or long term investors. I don't have any money in the market that I'll need for the next three to five years. I don't personally recommend that anybody has any money in the market that they need for the next three to five years. So if the market drops in the short term, I just continue to do what I always do, which is I get a nice steady paycheck. I'm very fortunate in that regard. I continue to buy as I get money and that means that I will buy as the market drops, which is great, but I will also buy as the market has increased as I have over the course of the past few years. So I buy on the way down the same way I buy on the way up.

[A]

John, how are you thinking about a potential pullback in the market.

[B]

The thing about personal finance is it's personal.

[C]

It's.

[B]

And for personal reasons, I don't have a ton of new money to be putting into the market right now on say, a monthly basis. I think that is the best approach to always be able to continue to put money into the market, whether the market is up or down. I think that the data bears that out. In my personal situation, my portfolio is pretty high in cash right now, relatively speaking, about 17% cash. And I'm not saying that that is a strategy for every investor out there. Again, it's personal. But I think that one of the. There's a psychological benefit that can come from having some cash in a portfolio. And especially when the market is going down. You know, when the market is going down, there are often some really attractive, compelling bargains out there if you're taking that long term mindset. And it's really exciting to be able to invest in high quality businesses trading at a discount. If you don't have cash in the portfolio and you don't have new money to be adding to the market, it's psychologically difficult to sell perhaps one stock that's down to buy something that's even better. Right. So just for me, having that cash already there, I can sit tight with the investments that I have, not panic, but I also have cash available to take advantage of the bargains that I'm seeing out there. And that really makes me feel good about the bear market rather than panicking about all my stocks being down.

[A]

Yeah, being able to keep your head in down markets, I think is something that we talk about a lot at the Motley Fool. But it's so key if you have been through a big pullback. 2001-2002-2007-2008, that's really the hardest thing to do, is be just as rational at the bottom as you are. You think you're being at the top. When we come back, we're going to take a look at bonds. Something we don't talk a lot about, but may be an important thing to bring up. Right now. You're listening to Motley Fool Money.

[D]

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[A]

Welcome back to Motley Fool Money. Let's be honest, the bond market is boring. But the bond market is also 10 times the size of the equity market. And investors think about risk when they look at bonds, not just upside, something we talk about a lot. One of the things that caught my eye this week is that Oracle's two month old 30 year bonds fell 8%. Now that doesn't necessarily sound like a lot if you're a stock investor, but if you're a bond investor, that is a huge, huge move. The yield increased 2 percentage points to 6.7%. This is something that has been getting a little bit more attention is that maybe this AI trade that is now being more fueled by debt is maybe a little bit riskier than we thought it was a few months ago. So Emily, is this something, how should we take note of this? I guess maybe is the right way to look at this. Is, is Oracle A1 off or are we sort of seeing the bond market flash some warning signs that there's more risk out there than we thought?

[C]

Yeah, maybe you guys can tell me if I'm being too blase about this, but my first interpretation is that this has a lot more to do with Oracle in particular than it does with the bond market. And this could have broader effects on the tolerance for lenders and AI ambitions. But look, Oracle is paying a ton of debt to fund this AI ambition and it maybe doesn't have the best track record when it comes with capital allocation in the past. So I think lenders are just catching on to the level of risk associated with the deals. And with Oracle in particular, I mean, we're talking about tens of billions in new bonds and project finance loans with Oracle. So I mean, the good thing about being on the equity side of Oracle is that you have the theoretically all of the upside of those investments actually pay out. And yes, of course, all the downside if they don't. But bond investors really only get that principal and interest back. So in my opinion it makes sense that they're demanding little bit more of a premium for taking on that additional risk.

[A]

John, one of the things that Oracle could be telling us is that this AI trade, which extends to companies like coreweave, Nebius, which has been some of these, have actually dropped pretty significantly. I think Core weave is down 50% from its peak. But if, if investors on the debt side are demanding more, that could make it a little bit harder to buy those Nvidia GPUs to build out energy, to build out data centers. So is that something that you as an investor are at least keeping an eye on?

[B]

Absolutely. And I'll tell you Travis, one of the things that has really caught my eye when it comes to this AI infrastructure build out is just how much more these companies want to do. They've spent hundreds of billions of dollars already, and yet when you look at their roadmap, if you will, they haven't even come close to what they want to deploy and what they want to build and what they want to spe. And so if it's already just bringing in some questionable debt for some players, there's going to be a lot more debt coming online because there's so much more left to do. When you think about super intelligence, this is what many of them are aiming for. This is where AI is smarter than human beings in all domains. That's going to take a lot. And I think that the only real plan that we have up to this point is just deploy more GPUs. Okay. We're talking more data centers, we're talking about more power. Sam Altman on the record wanting 250 gigawatts of electricity by 2033, which by.

[A]

The way is a lot of electricity.

[B]

Yeah, I think that that is as much as the country of India. So I mean it's, it's astronomically large. That's going to take a lot of money to even approximate what they're shooting for. And so yeah, there could be a lot more debt in coming years to build this out.

[A]

Emily, as we look at how investors should be thinking about some of these things, you know, the return on this investment seems to be something that is now getting a little bit more attention. It used to be that every announcement a stock would pop. Oracle, right, announced $300 billion in remaining performance obligations. Their stock went up and now suddenly a couple months later, investors go, wait a second, are they going to make, are they going to make money on that? How much Is this going to cost? Is this going to be fueled by debt? How does the ROI of some of these investments come into this? Because it seems like that's where this interplay between equities and debt kind of becomes important.

[C]

Yeah, this is such an interesting question because this calculation has been centered upon what's the return on investment for artificial intelligence in particular, right? And this equation has always been, okay, we make all these investment dollars, what am I getting out of it? And the equation is actually what is the return on investment for the artificial intelligence investments really? Data centers. That's what the debt's being used to pay for versus what is the cost of financing? And the focus has been on the former part of that equation, not so much the latter. But maybe we should all be thinking a little bit more about the latter part of that equation as we look at the bond markets here. Because even if the former gets a decent return, right, even if we're getting 8 to 10%, let's say of the, of a return on our AI investments, is that actually more than the cost of our debt financing? And even if we're not funding with debt, if we're funding with cash, and there's been some question marks about how much of this is being covered with cash, I would challenge, challenge the perception that cash is actually free. As an equity investor myself, I actually think that there's a massive opportunity cost that exists with these big, large organizations, tech companies that are using all their cash and reinvesting into artificial intelligence. I as an investor like to see more than 10%.

[A]

What else could they be doing now? Let's say Mark Zuckerberg for example, what could he be doing besides building data centers and spending money on VR headsets?

[C]

Well, Mark Zuckerberg is probably the worst example because Meta has in my opinion performed well despite his capital allocations skills. Because Zuckerberg has spent tens of billions of dollars investing into the Metaverse that has effectively gone nowhere. But the Microsoft of the world, you know, the, the Amazons, these businesses that actually get a really good return on investment by reinvesting either into their core business, but also potentially returning shareholder dollars through dividends, share buybacks, other capex expenses that are a bit more known versus data centers. I mean there's a million and one ways that businesses could be spending capital that have a more clear return on investment probability versus artificial intelligence. Now I will say more clear does not necessarily mean more profitable. And I, the leaders of these organizations see the risk and reward proposition that is building out data centers and say I would rather potentially be wrong about artificial intelligence and invest the capital here because the risk of being right and we're being wrong in this case outweighs it. And if they don't invest in artificial intelligence and they're wrong and artificial intelligence ends up being the future of whatever industry they're operating in and they don't make those investments and they could potentially actually just obliterate the relevance of their company in 10 years.

[A]

Yeah, they are really thinking about disruption, maybe in a way that we weren't thinking about it 30 years ago. John, quickly, how does depreciation play into this? Because this is something that ends up on income statements. But maybe we don't talk about it a lot.

[B]

Yeah, I mean, this is such a lively conversation on bonds. Why don't we make it even more exciting by talking depreciation? But no, this is a question. You spend a lot of money for GPUs and how long do those GPUs last you? And people say, well, you don't need to worry about depreciation because it's a non cash thing on the, on the chart. But hey, the thing is once those GPUs are depreciated, you have to replace them. So it does come into play. And so how long can we use what we've already spent money on? That's a big question.

[A]

When we come back, we are going to play a game called calls in puts. You are listening to Motley Fulman.

[C]

I said it here.

[E]

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[C]

The number you have reached has been disconnected.

[A]

Welcome back to Motley Fool Money. In honor of Michael Burry closing his hedge fund or at least the outside capital that's being invested in his fund. We're going to play a little game called calls and puts. Here's how this works.

[E]

Works.

[A]

I'm going to give you basket of three stocks in a theoretical trade. I want you to buy long dated calls, so leaps on one of them, puts on the other. So you're betting against one of these stocks and the third you can just leave out of the portfolio and then we'll see how things shape up. I got, I got some interesting categories here, and I actually cheated a little bit in picking the, picking these stocks. I, I looked at what Emily is invested in and so I wanted to put her on the hot seat with a bunch of these. And John and I talk stocks. I know that you're invested in at least a few of these, but the first group is growth. At what cost? The three stocks in this group of stocks, Emily, are Axon, Zillow and Spotify. I think we can all agree these are good businesses, but at what cost? So who are you taking a leverage long position in and who are you taking a leverage short position in?

[C]

Well, I want to say, Travis, I was wondering why these stocks look so familiar. And now I feel like you're, you're putting my portfolio on blast here a little.

[A]

I set you up a bit.

[C]

Well, I appreciate it. And, and we are flying blind here a little bit, Travis. You know you told us, don't, don't prep too much. Come in with your organic thoughts. And now I know why this is an easy basket for me between Axon, Zillow and Spotify. I, I'm a big fan of Spotify still to this day. This is a business that I think has plenty of room to run. So in terms of taking a long call here on Spotify, that one is an obvious winner to me. In terms of a business that I would have to buy puts on. I think Zillow is one that I still remain a bit skeptical of. I purchased Zillow back when it was in the I buying pandemic driven craze that.

[A]

Oh, so it's just a legacy position.

[C]

It's a legacy position that never quite panned out. In fact, I think in the portfolios where we had recommended Zillow, we had since recommended a sale. And obviously I never got around to selling it in my own portfolio. Probably should have Axon always considered about its valuation. I'll just let that one run.

[A]

John, what do you think about Axon, Zillow and Spotify?

[B]

I should preface this by saying I Wouldn't want to bet against any of these three. But if I'm taking a long dated call position, I'm doing that on Axon Enterprise. I think that this is a company that's proved itself time and again. The market opportunity remains very large and it has visionary leadership that really wants to expand into so many different things. I think that that's one that I would like to have my money riding on even at today's present valuation. If I'm putting a put on something, I'd say it's on Zillow. And the reason why is I think that the real estate market is still just ripe for disruption. Is Zillow the disruptor at this point? I'm not sure. So if I had to take a put on one of these three, I'd take Zillow and then Spotify. I'm a little bit more neutral on that.

[D]

That.

[A]

Let's go to Consumers and this round is called Are Consumers. All right, the stocks here, I'll start with you, John, are Celsius, Monster Beverage and Dollar General. So maybe some valuation concerns here, but also are people going to be buying energy drinks and going to dollar stores? These have been pretty volatile stocks over the past year or two.

[B]

Yeah, indeed they have. This one is somewhat easy for me. I'm just going to go based on how I'm investing my own money right now. And so if I'm taking a call, I'm doing that on Celsius. I really like Celsius. As far as it's going to be growing its brand presence. It just acquired a Lonnie New Aulani. New hasn't entered the Pepsi distribution system yet, but it does here in December. I think that that is a huge upside as far as its revenue growth goes and it's just now starting to get into international markets. If I am neutral on something, I would say that I'm neutral on Dollar General. I think it's a great business. I think it's going to do well. Is it going to outperform The S&P 500? I think so. But if I'm going to go neutral on one of these three, I'm going to do Dollar General. It's not going to be a huge market beater, that's for sure. And then Monster would be my put.

[A]

Here so long Celsius short Monster.

[B]

Yeah, I like. I like the David. Not so much the, the Goliath. If I have to pick one of the two.

[A]

Interesting that Monster has become like Goliath here. Emily, what do you think about Celsius, Monster and Dollar General.

[C]

I really, really hate this question. I don't want to put puts on any of these companies. To be very, very clear, I. I've been sitting here the entire time John's talking and just heavily debating with myself. The one that I feel very confident on is I, I want to go long and, and so I guess buy calls here and this is actually maybe a little counterintuitive. I think Dollar General is set up really well here over the next three to five years. And the only reason Dollar General is actually in my portfolio is back during the old Motley Fool Industry Focus podcast, Asit Sharma and I had a couple baskets going on and Dollar General was one of our baskets. And the business has struggled recently, but I actually think the discount grocer game right now is rising in relevancy. I actually think I might be buying puts on Celsius.

[A]

Interesting. Okay.

[C]

And I'll go neutral on Monster. And the reason I'm doing that is because while I do feel like I was broadly wrong about my concerns around the Aulani new acquisition, which I felt like Celsius was effectively just acquiring their own customer base, which I thought was potentially a waste of money, I will say I think I really undersold just how much market share Aulani New had gained. I think they ultimately end up potentially writing down part of that acquisition. The energy drink game right now has been incredibly fatty. I follow it as part of the Dutch Bros. Industry and Monster Beverage I think is in a better position in comparison to Celsius simply because their customers are much more regular purchasers versus the Celsius Alani new purchasers. I wish Celsius had just stuck with their core brand. I'm still skeptical. Even though the data's not backing it up. I'm still skeptical at the large acquisitions. So I hate doing it though, to be clear, like this is.

[A]

This is the weakest challenges. Yeah, this is the challenges. This is supposed to be hard. All right, round three. How are these not better businesses? And I have questions about all of these. I like the idea of the business, but then I have questions about valuation and why aren't they more profitable. Unity, Roku and Airbnb. Emily, I'm putting you on the spot first.

[C]

This is actually pretty easy for me. I think Roku is easy call. I think this is an incredible business. It's not my fault the market doesn't understand it well enough. People just fundamentally do not understand the business of Roku. They over focus on the hardware. In my opinion, Roku is like Spotify three years ago, where people don't understand the potential ramp up that could happen in free cash flow generation. That is happening actively right now. With free cash generation, there's been a couple of missteps by management. I'm not going to defend Anthony Wood and his push into home security systems. You know, Sometimes our founder CEOs are a little nutty. That was a bit of a nutty move.

[A]

That's the risk reward you get there.

[C]

Yes. But I will say if you, if you, if you doubt Roku, just look at their performance in the ad market over the course of the past couple of years, especially during election years. 2026 is probably going to shape up to be a decent advertising year for them with midterm elections coming up. So I really like Roku, you know, especially over the long term. But even over the short term, Airbnb is probably the one I'm calling puts on strong business, plenty of cash flow. I feel like management has just been too slow to innovate. There's a lot they could have done with their platform, but I think they were too tepid and they gave up a lot of space when they probably.

[A]

Services business that they launched. I was just traveling internationally and you know, I looked at it and it just seems a little goofy. I wanted to think that there was something there for me, but I don't know, just having a person take me around a city seemed a little bit odd.

[C]

Well, there's lots of competitors to the services division too. There's lots of, you know, different travel sites that actually organize unique sightseeing adventures. And in my opinion, that was Airbnb's space to, to grab. And for whatever reason, they, they were not successful in getting that market share. They could have made an acquisition that plenty of classes cash to do. So they could have came in and crushed the competition with better advertising, better services, better marketing. But they just did it. They blew it.

[A]

John. Unity, Roku or Airbnb.

[B]

So I'm going to agree with Emily when it comes to neutrality with Unity. And so with Unity, of course you can use its create solutions to create, say, a video game app. And then with its monetized solutions, you can then run the advertising that seemed like a good one, two punch. If you're creating the game with Unity, why not monetize it with Unity? What went wrong a few years ago was that its algorithm for monetization messed up and it wasn't providing its customers with good value and so it lost a lot of market share. Now, AIs come into the picture. Supposedly some good things are starting to happen. We're starting to see some momentum. So maybe this is something that pays off. I'm always leery when it comes to turnarounds. So Emily and I agree with our neutrality, with unity of these three, but we disagree when it comes to what we're putting calls on and what we're putting puts on.

[A]

All right, all right. You can just sell to each other.

[B]

So in fairness, I own both of these stocks in my portfolio. Airbnb is my call. I really love this business. I think it's just an unsinkable brand. It's just generating so much free cash flow. And the CEO, Brian Chesky, he's just got big ambitions, right? Always trying new things. Not all of them are going to pan out, but I think eventually one of them will be a big idea that really carries this business higher. So I just like that optionality that it has. When it comes to Roku, I don't deny that streaming is the future. I don't deny that Roku is the number one player in the space and has done a good job getting into homes. What I haven't liked in recent years is that the hours that people are engaged on the Roku platform are going up at a faster rate than its monetization. And so for me, it's just not, I would expect those advertising, that advertising demand to increase those prices so much and it's just not, it's just not at the same rate.

[C]

Do you know why?

[A]

Yes. Explain this to us, Emily.

[C]

Because they're gaining a lot of international viewers. They monetize at a lower rate.

[A]

Even still this one, we should do a whole show on Roku because I think I would fall on John's side. But maybe, you know, Emily's obviously has strong opinions here. I think it's interesting where, where you both disagreed and that is kind of the consumer side of things and the all you both dislike Zillow, you know, such a huge market if, if they can get it right and maybe with a long dated Michael Burry type bet, I guess either puts or calls is probably right. It's probably going to going to go up exponentially or down to much lower levels. So I do want to get to our next topic after the break. That is going to be the streaming wars. They they're continuing and I think Emily has thoughts here. You're listening to Motley Fulman.

[C]

I met a gen so far room man in Memphis.

[B]

He tried to take me upstairs.

[E]

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[B]

As always, people on the program may.

[A]

Have interest in the stocks they talk about, and the Motley fool may have formal recommendations for or against. So don't buy or sell stocks based solely on what you hear. All personal finance content follows the Motley fool editorial standards. It is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show Notes One of the big topics of the week that I wanted to get your thoughts on was Warner Brothers Discovery. Discovery has essentially put it up for sale. That's what the reporting says. Paramount, Comcast and Netflix are all reportedly interested in their assets. Disney actually on their conference call said we're gonna back out of this one after their Fox acquisition. Maybe they're a little bit more leery of taking on debt to add these kinds of assets. Emily who needs Warner Brothers Discovery the most and why?

[C]

I think there's a reason why Paramount Skydance was the one to kick off this conversation for Warner Brothers.

[A]

They really want to buy the company and maybe the other players are being a little bit more defensive and I.

[C]

Think, I think that explains a lot And I think that tells you and investors everything you need to know about who probably needs it the most. Paramount was the first bidder. They have this old linear TV business. And in my opinion, they're offering with Paramount plus is just some of the weaker streaming offerings. So getting Max and hbo, that would just be a value addition that could actually potentially drive profitable growth and subscribers. So in my opinion, I think Paramount needs it the most. But I actually think it would be such a genius defensive move for Netflix to get this win. And if I was Netflix, I know they've been skeptical of large mergers. They're understandably all about organic growth as opposed to acquired growth. But in my opinion, this would be about crushing the competition. And for Netflix to get hbo, obviously there's a great content library there. It would be pushing out competition from the market. A good reason to charge more, potentially add an additional tier without a lot of added complex complexity. So I just, I think it'd be a really smart move by Netflix. I hope Netflix goes for it as a shareholder and as a viewer. But Paramount obviously needs it.

[A]

Obviously, Paw Patrol is not playing a lot at Emily's house. Unfortunately not, because we are definitely using the Paramount app quite a bit here. John, the interesting company here, I think, is Comcast, because Comcast is the one company with Peacock. It seems like they have everything going for them. They have all the infrastructure with cable. People can bundle with broadband or with their cable service, but they kind of need to be the number three player or why in the world are they in streaming in the first place? Number one is obviously Netflix. Number two is Disney. So is that a company that we should keep an eye on as well?

[B]

For sure. And whether or not it's important to be number two or number three, whether or not that's good enough, it's really going to depend on what the space looks like in a decade. And personally, I think we're heading towards streaming cable, essentially. And I know that that's what we tried to get away from the cable package and that we thought that we would do that with streaming. And the idea that I think a lot of people are stuck with is that we went to streaming because we wanted to pay less money by only paying for what we watch or what we use. And for me, that's only partially true. I switched to streaming so that I could watch what I want when I want. The fact that you can just watch it on demand, that's something that you didn't get with the old cable system. But I think that we're Finding more and more that we have all these services. They're trying to make us bundle this bundle that I think essentially we're heading towards a streaming cable in the future. And so maybe it's not so important to be the number three streaming individual service because you're going to wind up in the bundle the, the cable package.

[A]

It will be interesting to see how this plays out. I know we're considering getting rid of YouTube TV, which has been kind of a go to, but now you can get almost all of that content elsewhere on streaming providers. As always, we end the show with stocks on our radar. We're going to bring in Dan Boyd behind the glass to get his thoughts. Emily, I'm going to have you go first because this is a stock I wanted to talk more about. We ran out of time today. What is on your radar?

[C]

Disney is actually on my radar. The ticker is dis, of course. And the reason Disney is on my radar is because similarly to Roku, I feel like this is kind of a misunderstood business. They reported earnings earlier this week and a lot of the headlines over focused on both their linear TV business as well as streaming. And that seems to be the narrative driving the story around Disney right now. But the reality is, is that the vast majority of operating income for Disney are driven by parks, experiences, cruises and actually stuff ESPN and sports. And those segments of Disney's business continue to just kill it. And so while the narrative is all around Disney plus and streaming, which by the way, Disney plus is dramatically improving in terms of profitability, I actually think quietly under the water, Disney is just steadily improving its profitability picture in terms of its highest margin segments. And while they can't continue to raise prices forever, Disney World, Disneyland, they're getting very expensive for the average family. And obviously that will suffer if we enter into any sort of like recessionary environment. But Disney itself, in terms of its relative average valuation, I think is going underappreciated here today.

[A]

Dan, are you a fan of a company run by Bob Iger? I'm actually a Disney shareholder, so you could say that. But Emily, what's your favorite Disney movie and why is it the Little Mermaid?

[C]

I have to say it's a Little Mermaid, dad. And the reason is, is because I don't watch Disney movies. And I think I'll get your vote if I say the Little Mermaid.

[E]

Pandering.

[A]

All right, John, what stock is on your radar?

[B]

Yeah, Travis, my stock on my radar is Sea Limited, ticker symbol S E. This is a business that's headquartered in Singapore and it has three main business units. It has Garena for digital entertainment. So think video games has Shopee for E commerce. And it has Moni for financial technology. This is a stock that soared during the pandemic era because it was putting up incredible growth numbers just quarter after quarter after quarter. But eventually it dropped back down to earth because it was putting up some big net losses as well. Management responded by balancing profitability with growth. And so it's been profitable, strongly profitable now for about three years. As we look at it right now, it's down about 30% from its highs here in 2025. Third quarter profits didn't live up to expectations. But look at this in perspective. It had a 6% profit margin even still and it grew revenue a whopping 38% year over year. I think it's Sea Limited has plenty of long term Runway, about 10.5 billion net cash and about an $80 billion market cap. But I, I think it could be bigger.

[A]

Dan, what do you think of Sea Limited? Digital companies, a lot of the times are notorious for having terrible names. But I feel like money and Shopee are amongst the worst.

[B]

No argument.

[A]

All right, Dan, we have Sea Limited and Disney. What stock is going on your watch list? Look at this stock stuff. Isn't it neat? With this one stock, my portfolio is complete. Didn't have Dan singing on the show, but here we are. All right folks, we are out of time. We'll see you tomorrow.