The company hit the headlines for the right reasons on the first trading day of the week.Inclusion on a list of prestigious businesses was a key news item driving GoPro (GPRO 19.14%) stock's price 19% higher on Monday. This double-digit rise easily topped the 0.4% increase of the benchmark S&P 500 (^GSPC 0.44%) that trading session.A high degree of trustGoPro has been selected for inclusion on Newsweek's 1,000-strong annual list of World's Most Trustworthy Companies for 2025. This compilation is broken down ...

Back. Stocks hovering near the flatline this morning after hitting some fresh records last week. Joining us here at Post 9 this morning, Interactive Brokers chief strategist Steve Sausnik is back looking at some areas, Steve, it sounds like where you you're not fully convinced, right.There's a there's certainly a degree of froth out there, Carl. And I think that's undeniable at this point. I'm not going to say the whole market is frothy, although it's certainly smelling that way to some extent.But I think t ...

Market Sentiment - The current market shows signs of froth, particularly with money flowing into SPACs and meme stocks, indicating a mindset of buying based on price increases rather than fundamentals [2][6] - Small-cap stocks, particularly those in the Russell 2000, are struggling due to a majority not being profitable, which necessitates either aggressive rate cuts or a robust economy for recovery [3][4] Economic Indicators - The market's assumption of aggressive rate cuts from the Federal Reserve has not been confirmed, which could impact the performance of small-cap stocks [3] - A strong economy could limit the potential for rate cuts, creating a challenging environment for small-cap stocks [4] Investment Strategies - There is a prevailing sentiment that investors are currently rewarded for being "irresponsibly bullish," suggesting a short-term strategy of buying into the market despite potential long-term risks [5][6] - Historical seasonality trends in September have shown mixed results, indicating that seasonality should not be a primary reason for investment decisions [7]

Company Overview - Open Door's CFO is departing, with Christy Schwarz named as interim CFO, who has previously served in this role and as chief accounting officer for over eight years [1] - The stock price of Open Door has seen significant volatility, rising from below $1 in mid-July to just under $10 recently [1] Market Sentiment and Stock Performance - The recent surge in Open Door's stock price is attributed to a broader meme stock rally, with retail investors showing increased interest [2][8] - The stock has been influenced by positive sentiment in the housing market, with indicators such as mortgage applications showing improvement [3][4] Financial Performance - In its second quarter earnings, Open Door reported revenues that exceeded expectations, although the third quarter outlook was less optimistic than analysts had anticipated [4] - The company's EV to sales ratios are currently higher than its competitor Compass, indicating a speculative market position [5] Leadership and Investor Relations - The return of co-founders and the involvement of Shopify's former COO are seen as positive changes that may drive future performance [5][9] - Retail investors have expressed satisfaction with recent leadership changes and the removal of automated selling programs, indicating a shift towards more transparent communication [10][11] Market Dynamics - The presence of retail investors in Open Door is characterized by a significant number of accredited investors, suggesting a more serious market influence than typically associated with retail trading [15][16] - The role of weekly options trading has been highlighted as a factor that can amplify stock movements, with aggressive buying of call options contributing to demand [17][18]

Core Insights - Retail investors often chase big themes in the market, leading to costly mistakes, as seen in past market cycles like the dot-com crash and the meme stock bubble [1][3][4] - The primary issue is not recognizing trends but rather the approach to investing in them, with many investors mistakenly believing that all stocks related to a hot theme will succeed [4][5] - A critical distinction exists between high-quality investments that provide long-term performance and low-quality investments that may offer short-term gains but come with higher risks [5][6] Industry Trends - The current AI boom sees major companies like Microsoft, Nvidia, Google, and Amazon investing billions in AI infrastructure, indicating strong fundamentals and long-term viability [6] - In contrast, there are numerous smaller AI meme stocks that lack solid business models and proven leadership, posing greater risks to investors [6]

Market Overview - There are signs of market excess and economic pressure, with large-cap growth stocks trading at "astronomical" valuations and increased interest in cryptocurrencies and Trump Media stock indicating "frothiness" and "overenthusiasm" [2] - The US economy appears to be in good shape, and a potential interest rate cut by the Federal Reserve could support continued economic stability [3] Company Insights - Oracle is viewed positively, described as a "real company" that has generated significant shareholder value over the past year, with its stock recently surging by as much as 43%, increasing its market value by nearly $300 billion at its peak [2][3] - The company's size suggests its stock is "pretty efficiently priced," and a series of large AI contracts is expected to contribute to its future success [3] Consumer Behavior - While lower-income Americans are facing challenges, affluent consumers continue to spend on experiences like cruises and live entertainment, contributing to a stable economic backdrop [4][5] - Consumer confidence is bolstered by rising stock values and positive performance in retirement accounts [5] Investment Picks - The Ariel Investments chief has identified two stocks of interest: the owners of Madison Square Garden and Dramamine, indicating a focus on companies with strong fundamentals [6][7]

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Market Overview - Small cap stocks showed volatile performance in Q2, with the Russell 2000 Index recovering to within 10% of its record highs in just 55 days, primarily driven by growth, momentum, high-beta, and low-quality stocks [2] - The Russell 2000 returned 8.5% for the quarter, underperforming the Russell 1000 Index's 11.1%, marking the widest annual performance gap since 1935 [3] - Growth stocks regained leadership due to strong demand for AI beneficiaries, with the Russell 2000 Growth Index returning 12.0%, significantly outperforming the Russell 2000 Value Index by 700 basis points [3] Retail Investor Activity - Retail trading volumes have more than doubled since 2010, now accounting for nearly 21% of total market volume, while traditional long-only managers and hedge funds are losing market share [4] - Retail investors are focusing on companies with an average market cap about half that of the Russell 3000, with nearly 45% of their purchases being "zombie" companies with no earnings [10] - Notable examples include Regencell Bioscience, which saw a 7,000% increase in market cap despite having no revenue or regulatory approval [10] Portfolio Performance - The ClearBridge Small Cap Strategy underperformed its benchmark in Q2, with detractors in consumer discretionary and communication services sectors outweighing positive contributions from utilities and select healthcare companies [12] - Stock selection in the consumer discretionary sector faced challenges, particularly for Murphy USA and Oxford Industries, due to idiosyncratic headwinds and increased tariff costs [13][14] - Communication services sector detractors included Criteo and Anterix, with concerns over long-term growth and profitability impacting performance [15] Sector Contributions - Utilities sector performance was led by Talen Energy, benefiting from rising demand for power due to AI data centers [16] - Verona Pharma rebounded after receiving favorable FDA designation, leading to its acquisition by Merck at a premium [17] - Overall, the strategy had gains in six of the 11 sectors, with industrials and IT sectors being the leading contributors [21] Portfolio Positioning - The company actively adjusted its financial sector positioning, exiting Home BancShares for UMB Financial to enhance quality exposure [18] - New positions were initiated in AGCO within the industrials sector, expected to benefit from trade and tariff policies [19] - Exited positions included Abacus Global due to declining conviction and performance concerns [18] Outlook - The market shows signs of euphoria reminiscent of previous speculative bubbles, with a focus on low-quality stocks [4][20] - Economic uncertainties, including tariff impacts and potential inflation, suggest a need for a cautious approach [20] - The company continues to prioritize high-quality stocks with strong fundamentals, anticipating that these will be favored when market conditions shift [20]

Core Viewpoint - GameStop reported strong second-quarter results, leading to a stock price increase of over 3%, outperforming the S&P 500 index's 0.3% rise [1] Financial Performance - GameStop's net sales for the quarter reached just over $972 million, marking a significant 22% increase compared to the same period last year [2] - The company's GAAP net income surged to over $138 million ($0.25 per share), a substantial rise from just over $5 million in the previous year [2][3] - The reported figures exceeded analyst expectations, which estimated revenue at $823 million and earnings at $0.16 per share [3] Cash Position and Assets - GameStop's cash, cash equivalents, and marketable securities more than doubled to $8.7 billion from $4.2 billion over the past year [4] - The company holds a significant amount of Bitcoin, valued at just under $529 million at the end of the quarter [4] Dividend Declaration - GameStop announced a special dividend in the form of warrants, granting one warrant for every ten shares held, allowing holders to purchase shares at $32 [5][6] - Shareholders of record as of October 3 will be eligible for the warrant dividend, which is expected to be distributed on October 7 [6]

Michael M. Santiago/Getty Images The stock market is in a record-setting stretch over the last several months. Small-cap stocks have joined the rally, but some experts remain unconvinced that the gains will continue. Morgan Stanley's Lisa Shalett sees an opportunity for investors to profit before the tides turn. The summer rally to all-time highs has lifted everything from mega-caps to cheap stocks to meme shares, but the investment chief of Morgan Stanley's wealth unit says it might be time to tak ...