The Best Performing Stocks of 2025 | Animal Spirits 445

Key Concepts:

• Market Performance: Analysis of S&P 500, S&P 600, and international market performance, with a focus on semiconductor companies, small-cap stocks, and the AI-driven surge in silver.
• Retirement Savings: Discussion of 401(k) participation, median balances, and the importance of Social Security.
• Consumer & Economic Sentiment: Examination of consumer sentiment indices and potential issues with data reliability, alongside observations on increasing consumer debt.
• Technological Trends: Exploration of the energy demands of AI and data centers, and the impact on utility stocks.
• Wealth Management: Overview of family offices and their growing influence in wealth management.
• Cultural Commentary: Critique of the proliferation of biographical movies and discussion of popular video games, TV shows, and books.

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Sponsorship & Initial Conversation

The episode begins with a sponsorship from Trade PMR, promoting their “Asset Match” program – a 50 basis point match on eligible client deposits until March 31st. Trade PMR, a subsidiary of Robinhood Markets Inc., is a member of FINRA and SIPC. The core conversation starts with Michael recounting his family vacation to Disney and Universal Studios, including a family bowling tradition where he recently scored over 120 in two games. Ben shares his experience taking a bowling class in community college. Their Universal Studios visit involved utilizing the “Express Pass” for $1,500 for four people, justifying the cost for convenience despite the expense. They noted capacity limits at Disney despite perceived crowds and discussed potential credit card debt accumulation among park visitors.

Market Observations & Investment Strategies

The discussion transitions to investment lessons, drawing a parallel between recurring advice to avoid fear and greed and the fundamental structure of novels. Michael cautions against overtrading, referencing a past mistake with silver. Market data reveals silver is up 170% year-to-date, while gold is up 70%, prompting speculation about an “AI bubble” driving silver’s surge. A review of the S&P 500’s top performers highlights semiconductor companies (SanDisk, Western Digital, Micron, Seagate Technologies), while The Trade Desk and Lululemon underperformed. Numont is noted as the only gold miner in the S&P 500.

Fidelity’s 2026 outlook focuses on the “AI revolution” and the increasing electricity consumption of US data centers, illustrated by a chart detailing energy sources (natural gas, coal, wind, solar, nuclear, hydro). This raises the potential for increased demand in utility stocks. A comparison of the S&P 600 (small caps) versus the S&P developed ex-US reveals a historically wide gap favoring developed markets, with international small-cap value funds significantly outperforming US counterparts (48% vs. 10%). Michael expresses a bullish outlook on small caps for 2026. A chart showing a record-high profit margin spread between the S&P 100 and S&P 600 leads Michael to question why increased capital expenditure on AI hasn’t eroded profit margins.

Personal Finance, Wealth Management & Economic Sentiment

Michael shares an anecdote about his son, Kobe, and his attention-seeking behavior, relating it to common childhood experiences. The increasing cost of family vacations and shifting societal spending norms are discussed. The conversation then turns to the growing influence of family offices, managing $5.5 trillion in wealth and projected to surpass hedge funds by 2030. Ben defines a family office as an in-house team managing a wealthy family’s finances. Consumer sentiment is addressed, citing the lowest index reading since 1980, but Ben cautions against over-reliance on this data due to potential survey quality issues. The discussion concludes with a look at private credit, specifically increasing investment in consumer debt (credit cards, buy now pay later), with Michael expressing caution despite potential profitability. A brief mention is made of an upcoming Sam Altman biopic and a general observation about the abundance of biographical films.

Expanding on Retirement & Cultural Trends

The conversation expands on retirement savings, asserting that more people are saving for retirement now than in the late 70s/early 80s, even accounting for population growth. While acknowledging the past “retirement crisis” narrative, the speakers agree that preserving Social Security is crucial, but emphasize increased participation in retirement plans. The median 401(k) balance is around $200,000, considered a positive development. They note that 30 million people were covered by pensions in a US population of 180-200 million, suggesting 401(k)s have expanded coverage.

The discussion shifts to the increasing prevalence of biographical movies, citing upcoming films about Sam Altman (Artificial), Neil Diamond, and previously released films about Bruce Springsteen and Bob Dylan. They express a feeling of saturation in the genre.

Video Games, Entertainment & Book Recommendations

One speaker recounts acquiring a Nintendo Switch for their children (ages 8 and 11), their first video game system, having previously experienced Sega Genesis and Nintendo 64. Mario Kart is praised for its interactive and competitive nature, particularly when played with four people, and is contrasted with a lack of interest in “world-building” games like Zelda. Movie and TV recommendations include Four Christmases, The Night Before, Office Christmas Party, Stranger Things, Pluribus, and The Offer. The Men Who Would Be King is cited as the source of information about Chris Farley being originally cast as Shrek and recording 90% of the role before his death, and Liam Neeson being considered for Lincoln. Cameron Crowe’s book is praised for its storytelling.

Conclusion

The episode provides a broad overview of current market trends, personal finance considerations, and cultural observations. The speakers highlight the potential of small-cap stocks, the impact of AI on energy consumption, and the growing importance of family offices. While acknowledging economic uncertainties and the potential for consumer debt, they maintain a cautiously optimistic outlook, emphasizing the importance of long-term investment strategies and the continued relevance of traditional retirement savings plans. The conversation also underscores the pervasive influence of entertainment and the evolving landscape of media consumption.