Retail Investors Are CRUSHING Wall Street At Its Own Game

0:00Hello, everyone. The bottom 50 % of Americans, things are improving for them. They have seen their portfolio values increased 500 % in the last half decade. BlackRock's Larry Fink, he's going to explain where he believes the future of finance will be, and I have proof that institutions, they're now following retail investors. We're live today from the desk of Anthony Pompliano.

0:30Before we get into today's show, I need your help. My goal is to get to 1 million subscribers on YouTube. Many people are saying we're never going to get there, but right now we have 30 ,522 subscribers. So hit the button and let's get into today's show. All right, ladies and gentlemen, we are living through a K-shaped economy. In this situation, the wealthy continue to get wealthier and those without investment assets, they fall further behind every single day. Now this divide is ultimately the driver of so many societal issues in my opinion, but thankfully we are now starting to get some good news.

1:02There seems to be a light at the end of the tunnel for retail investors or individual families. Citadel Securities has brand new data that shows the value of public equities held by the bottom 50 % of households. That public equity portfolio has increased nearly 500 % since 2020. During that time frame, the S &P 500 has increased nearly 100%. So the data is telling us the bottom 50 % of households, they have seen a significant relative improvement from where they were just a half decade ago. Now, this does not mean that that cohort at the lower end of the economic ladder, they're good stock pickers or they're some sort of guru.

1:35Instead, the gains in portfolio value are much more likely attributable to a few things. More people are opening brokerage accounts. More people are putting a larger percentage of their savings into the stock market. The stock market itself rose about 2x in five years. And of course, the various government stimulus packages found a way to get more money into people's hands. So to make it dead simple to explain what's happening here, people have more money and they're choosing to put a larger percentage of it in the market. Now, that to me is very different than being an excellent investor. It's still good news, but it's very different than being a good investor.

2:08In fact, most investors are bad at beating the market. Chris Camelo, he highlights that only 22 % of funds are going to beat the market this year. Financial firm Jefferies says that that means stock pickers are poised for the worst annual showing in decades. Stock pickers are taking a big L this year. And it makes sense when you think about the volatility that we've experienced in 2025. buy. Most capital allocators were very excited as President Trump took office because he's known to focus on policies that make the stock market go up. If you put a president in the White House who cares about the stock market, it's likely to go up.

2:42But almost immediately after taking office, Trump and his team levied tariffs on almost every trading partner that the U.S. has, and all of a sudden, investors got spooked. They started predicting doom and gloom. Remember, the shelves were supposed to be empty, and that led to a 20 % sell-off in stocks. But thankfully, within weeks, the administration started to strike trade deals, they cut back on the tariff levels, and they talked the market back into optimism. The rest was pretty much history at that point. Stocks, Bitcoin, gold, they all took off higher. Scott Besant, the treasury secretary, he was on TV every other day talking about running the economy hot.

3:14And he was saying that we could grow our way out of the problem. And remember all that enthusiasm around achieving a balanced budget? Well, that fell to the wayside as investors realized the national debt is going higher under both political parties. So this context is important because it highlights how much further we still have to go for the average American family. Yes, it is true. The bottom 50 % of Americans, they have seen their collective equity portfolio value increase 5X in the last few years. That's good. We should celebrate that. But that cohort still only owns 2.5 % of total assets.

3:45It's not exactly an encouraging ownership stake on a relative basis. So this brings me to the current government shutdown. Put aside the fact that most shutdowns, including this one, they're merely egotistical soap operas for certain politicians. Instead, let's focus on the fact that the average American is still in a bad spot. Now, Chris Cuomo hosted an event just this week down in the Kennedy Center in Washington, D.C. He had various celebrities, politicians, and commentators all on stage. And there's an important clip of Stephen A. Smith, the sports commentator, going off on the folks that are sitting with him on stage.

4:17This happened after an air traffic controller in the audience stood up and asked a question. And in it, he said that he was going to work a second job on DoorDash to help his child afford education. Take a listen to what Stephen A. had to say. Let me say this. I don't think Washington understands how ticked off we truly are. Think about the conversation that we're having right now. You brought up the single payer system emulating Canada. You know, we're looking at a president that just gave 20 billion to Argentina. We're hearing about or witnessing what I consider to be a retribution tour and even though to some degree I don't blame him because of how people went after him, still it appears to be counterproductive.

4:58We're listening to this kind of stuff while a young man walked up to the microphone and said that he had to leave here to go and work on DoorDash to help pay for his daughter's tuition. Meanwhile, everybody up here getting paid. But he ain't. This is this kind of stuff right here. That's how you know, and I'm not accusing any of you directly or personally of feeling this way. I'm just talking about the apparatus that is Washington, the nation's capital. This is why you have so many Americans, excuse my language, so pissed off at Washington. Because somehow, someway, you get to have these conversations, engage in specific elements of it to talk about what we need to do to get things better.

5:49Our debt is 37.8 trillion. Somehow, someway, the taxpayer's been paying this, been throwing money, because we all look at our check, and it's been going to the government, and somehow, someway, you're supposed to be doing something constructive and productive enough to make sure that we don't have that kind of deficit. It isn't happening. A government shutdown is going on right now. A man has to work on DoorDash when he's really an air traffic controller that we applauded. And we're up here talking about how much some money is going to cost. And the only person that don't have a check coming is him.

6:29You know what I'm going to do? I'm going to take a break. Now, we can easily connect the issue Stephen A. Smith is talking about with the rise in equity investing. People have no other choice. They can't save their way to financial security. And this may be the most important point. Wealthy people talk about financial freedom, but the average American is much more focused on financial security. Remember, you can't worry about retiring if you're worried about affording your bills. So given this context, it was funny to me to see a recent article in The Economist. Former IMF chief economist sat down and was screaming about the potential destruction of wealth if the stock market crashed.

7:09Quite literally, she is warning that investors have too much exposure to the stock market. So a crash, she's saying, would be harmful to the world. What are we talking about here? I wish all economists would simply be intellectually honest and they would simply say people around the world were forced to become investors because savers, the savers among us, they have their wealth stolen by undisciplined monetary policy that produces inflation. So here's the thing, we can't have it both ways. We can't complain that rich people own too many assets and also complain that the world owns too much public equities at the same time.

7:43Either we want more people to join the asset owner class or we want less. To me, it doesn't seem like a difficult decision. Obviously, we want as many people to participate as possible. Now, American capitalism has provided more economic mobility than any other system in the world. It has allowed people to come from any geography, any sex, any religion, or any background, and they all can create a life of financial prosperity. So encouraging more people to invest is not only a net positive, but it likely would have a more profound impact than most philanthropic efforts. That's what nobody wants you to know.

8:17The meritocracy of financial markets provides opportunity to those who need it most. And if stocks are going to double every five years, as they have been, people will be just fine if there's a periodic market drawdown. Even if we draw down 20 or 30%, it's okay. Stocks still are doubling at a very fast rate. So we know the government can't stop printing money. And so let's just hope that every citizen positions themselves to benefit from the stupidity rather than sit on the wrong side of the table as a saver. BlackRock CEO Larry Fink recently went on television, and he was celebrating the fact that BlackRock's essentially become a Bitcoin company.

8:53BlackRock's Bitcoin ETF is now the most profitable product inside of the company. And on top of that, it just crossed over$100 billion. That's a big deal. Take a listen to Larry and what he had to say. Our Bitcoin, Ibit is now over$100 billion. I know from nothing not that long ago. And two years ago, zero. Yeah, I know. Well, you weren't always a huge proponent of crypto, as we know. You love it now. But I grow and learn. I heard you say that on 60 Minutes. I did. Yeah. Now, one of the things to pay attention to here is that the Bitcoin ETF, that may be a little bit of what got them here. But Larry's already looking into the future, and he believes that the next wave of opportunity, the future of finance, he says it's actually going to be in tokenization.

9:36Listen to this. But there's$4.1 trillion of money in sitting globally in digital wallets. A lot of that money is outside the United States. If we could tokenize an ETF, digitize that ETF, we could have investors who are just beginning to invest in markets through, let's say, crypto. They're investing in it, but now we could get them into the more traditional long-term retirement products. So we look at that as the next wave of opportunity for BlackRock over the next tens of years as we start focusing on moving away from traditional financial assets by repotting them in a digital manner and then having people stay in that digital ecosystem.

10:22They can have their cash. And we have the largest cash money market fund that's tokenized called Biddle. So here's how I look at Bitcoin tokenization and everything in between. I basically look at your traditional financial life. You have a checking account. You got a savings account. You got a brokerage account. three accounts for your entire life. I think in the digital world, the Bitcoin is going to be your digital savings account. I think stable coins will be your digital checking account. And I think this whole tokenization thing, that's going to be your digital brokerage account. So Bitcoin, stable coins and tokenization, whether people like it or not, that seems to be where the world's going.

10:57Start paying attention and start looking for opportunity. Yesterday, I flew down to Fort Lauderdale and I went on Patrick Bet David's podcast. Two and a half hours, we sat there, we talked about business and finance. And one of the key themes is that institutions, they're now chasing retail. It used to be that the retail investors were following institutions, but somebody threw down the UNO card and we reversed it. And the institutions are now chasing all of the people on the internet. Here's what I had to say about Opendoor and the rise of retail investors. So the other thing that's happening in financial markets that I think people are starting to realize is I've talked with a lot of institutional investors, a lot of hedge funds in the last year or so.

11:36You have to remember that the young people who are growing up with a phone in their hand, they're on X, they're on Reddit, they're listening to podcasts, et cetera, they live a dual life. They're an institutional investor when they're at work. They're a retail investor when they're in their personal account. So now what's happening is historically it was the institutions who were leading and retail was trying to chase the trend, right? Institution puts a position on, they go on television, they start talking about it, retail goes and buys it. We like Nike. Correct. Now it's flipping. The retail investors are running into different investment themes because they don't have the constraints.

12:10They don't have an investment committee. They don't have rebalancing and all this stuff. So they're going to buy. Well, the people that are inside the institutions, these young people, they think of themselves as retail investors. They see the trends. They're sitting on Twitter all day. And so then they go and they advocate for those positions inside the institutions. So a good example is Opendoor. If you look at this Opendoor stock, the retail investors all started to buy it. Basically, there's a hedge fund manager in Canada, this guy, Eric Jackson, who comes out and he says, hey, I think this thing is significantly undervalued.

12:39It was trading at like 50 cents. And he says, I think that this thing can come back. And so he goes and he buys the position. I interviewed him when he did it. And I heard the pitch. I thought it was interesting. But I didn't do anything. I didn't go buy the stock or whatever. Stock started to move up. And I paid attention. I see all the retail guys. And I see what they're doing. And I say, you know what? I'm going to buy this stock. You know what? I'm going to buy this stock. The company at the current moment doesn't look super attractive. but I think the retail guys are going to be able to advocate change inside this company, basically like an activist campaign.

13:08So I buy a stock. All of a sudden, the retail guys, they get super loud within, I don't know, 72 hours of them really going hard. The CEO steps down. They get management to eventually agree to stop selling shares. They bring in a new CEO, who's the former COO of Shopify. They bring back the founders onto the board of directors, all this stuff. So it's like the most successful activist campaign recently. Well, right after the retail guys all started buying the stock and advocating for all these changes, all the 13Fs start coming out. All the institutions start buying. You see all these guys are buying up this stock.

13:43Now, some of it is they think interest rates are going to come down. This is in the residential real estate market, so that would be kind of a tailwind for the company. But a big part of it is they're paying attention to what the retail guys are doing. And so they're sitting there saying, wait a minute. Why are all these guys all buying the stock? There's energy now. There's momentum. They're advocating change. They're bringing back the founders. They're putting in this great CEO. Like that is going to change this company. And so the institutions follow retail, which is very different than 10 years ago.

14:08Now, again, anytime that you look in financial markets, understanding how capital flows is very important for trying to understand what assets are going to go up in value next. I personally see it every single day in my conversations. Retail investors are thinking for themselves, and they're trying to work together in this loose, coordinated way to better understand investment opportunities and to make decisions as to where to allocate their personal portfolios. They don't have all the constraints of the institutions. They can move faster. And frankly, they can take more risk. And so now the institutions are realizing retail is going to drive momentum and energy into certain stocks.

14:41So the institutions are all following retail. It's a big change in finance. And I think it's one that's going to be worth paying attention to in the coming years. That's it for today's show. Thank you guys so much for watching. We have 30 ,522 subscribers on YouTube, but I need your help to help us get to our goal of 1 million. hit the subscribe button and I'll see you guys tomorrow live from the desk of Anthony Pompliano.