The Most Shocking Stories of 2025

0:05It's the day after Christmas, so it's time to look back on 2025 Motley Fool Money starts now.

0:25Everybody needs money. That's why they call it money. The best things in life are free But you can give them to the birds and bees From Pool Global Headquarters, this is Motley Pool Money. Welcome to Motley Fool Money. I am Travis Hoyam, joined today by Emily Flippen and Lou Whiteman. Guys, when we look back on 2025, we're getting ready for this show. I almost forgot how much tariffs were a topic just a few months ago. This happened in April. There were sweeping tariffs put on all kinds of imports coming into the US. So we have to start there when we're looking back on 2025 because that was thought to be a devastating hit to the US economy.

1:08And yet the S &P 500 is up about 40 % since then, Lou. What did we learn about tariffs, or are we still in sort of this unknown territory? Okay, so full disclosure, I was one of the people saying the sky is falling, so I'm going to be very defensive in my answer here, okay? I'm likely biased. That said, a couple of things I want to point out. First of all, we live in a world where we're used to hot takes, instant reactions and stuff. Tariffs, like Fed moves and so many other things in the economy, they take time to work through the system. I think if you looked at since April, no, there wasn't that instant, the world is terrible now.

1:45But we've talked about it on here, Travis, the boiling frog economy, and it's slowly, slowly getting worse. I'm sticking with that. Under the surface, there are signs of distress, even if the stock market is up. Secondly, on the stock market, Main Street is not Wall Street. Yes, the market is up. The market is always ahead of the economy, ups and downs. Wall Street went through the shock. They went through the denial. And then they kind of normalized tariffs pretty quickly. It's, I think, dangerous to say that, yeah, stocks are up 40%. Therefore, there's no pain on Main Street. Because I do think they're separate things.

2:22And they are going to play out differently. They did play out differently in 2025. And it will continue to do so. Emily, how do you think about this? because this was like the market reaction was almost like the pandemic. I mean, 2020, things crashed in a few days. That's what happened after the tariffs. But then it doesn't seem like Lou's probably right. There is some, you know, maybe boiling frog things going on, but you don't go to the store and see prices up 40, 50 % the way that we maybe thought they were going to be in April. So how do we think about this as investors? Yeah, I love this question because to Lou's earlier point, what's interesting is that by the end of April, the market had already rebounded and regained all of the losses after the announcement of the tariff.

3:05So, this was not in time, obviously, to actually see any impact from the tariff. The market was not reacting to whether or not we were going to see 40 % or 50 % price increases. It was reacting to something else entirely. So, to the Trump administration's credit, the economy clearly did not collapse due to tariffs. And there were pundits, myself included, that were predicting the worst. I always tend to be a bit of a pessimist. I like to be pleasantly surprised. But let's not forget that in April, that was the narrative. I mean, remember all the big bank CEOs saying a global recession was likely, but it's also true that the economy hasn't exactly boomed, even though the stock market has.

3:40And that is, to lose point, an important distinction, right? Just because the stock market's going up doesn't mean the average life for Americans are getting better. And the data that we do have to kind of evaluate that average life of the American is pretty severely delayed. And lots of it's getting questioned regarding accuracy too. But it's still fair to look at what we do have and see what it's telling us, right? Job additions this year have been lower than in the past. And Fed Chair Powell now believes those numbers are overstated to the point where we actually have been potentially losing upwards of 20 ,000 jobs a month since April.

4:11And it's really impossible to say how much of that was due to tariffs versus AI versus business decisions. But they're all key impacts of economic policies, right? So we're still actually looking to see the direct impact of tariffs. And I think it is genuinely still, it's crazy to say this because we're ending out the year of 2025, but it's too early to say that there hasn't been any economic impact from tariffs. It hasn't been what we expected it to be, but there are so many other variables going on today and a growing disconnect between the market and the average person that the real impact probably won't even come until 2026.

4:45Emily, one of the things that if you're a relatively young investor, let's say you started in the last 15 years, 10 to 15 years, it seems like every one of these dips immediately gets bought. You mentioned it with April. April, things collapse. And then by the end of the month, we're kind of back to normal and we're on an upward trajectory the rest of the year. Same thing happened in 2021. Oh my gosh, the economy, the world is shutting down. The stock market collapses. That was when you wanted to be a huge buyer. Is this the trend that things are just collapsing so quickly that the reactions are almost instantaneous and we should be ready to be really aggressive if the market does pull back?

5:25Or are these sort of individual things and we haven't actually seen a real recession in 15, 16 years now? And man, when one of those hits, it's going to be real news for a lot of people who haven't invested through that before. because I'm having a hard time kind of deciphering between those two things. And it's almost like two things can be true at the same time. But how do you think about those pullbacks? Are you more excited to buy than ever because they're typically quick bounce backs? Or are you cautious because eventually we are going to get through to a real recession? It's such an interesting thought.

5:58And I do lean on the side of typically staying invested regardless. And I don't actually keep cash on the sidelines for the most part. I get a paycheck. I invest it whenever I get that paycheck. So you whether or not the market is up or down. But I do think to your point, Travis, there is an appetite for opportunity. And I am one of those investors who has not invested through a recession. I am 31 years old. And during the Great Recession, which was really the last time we saw any sustained long market pullback, I obviously was a teenager. I didn't have my life savings in the stock market the way that I do today.

6:33And there are so many people out there who are like myself or people who maybe don't necessarily understand the risk that is associated with, say, a sustained pullback or a great recession, but are looking for ways to grow and expand their money because opportunities to do so have been so much more limited for younger investors. So, it's not a surprise at all that whenever the market pulls back, you see people who do have dry powder on the sidelines jumping in. It's only a matter of time before a recession does come. The dry powder doesn't last forever, so to speak. But it's so critically important for portfolio management, in my opinion, to encourage everybody to stay invested, regardless of what happens to the market in the short term.

7:11Agree 100 % with Emily in terms of the advice for investors is to try to block it out and just stay invested. That said, I'll play the role of the old man in the room because Emily, I got two decades on you, so I guess it counts. But look, I think things bounced back quickly during COVID for good reasons because COVID was a weird recession. It was sort of an artificial outside stimulus recession that was dealt with with outside stimulus. So that makes sense. I am going to be the grumpy old man and say it is way too soon to draw conclusions on this one. Yes, the stocks bounce back after the announcement, but I don't think we're out of the woods yet at all.

7:54I think we are wired to look for opportunities now. Definitely with all the information comes at us so quickly, we can process, we can get all those hot takes. We're not just maybe that's a good thing. That's something that I started investing. That's not the way that it worked. We're not sitting alone in fear. We're hearing people give opinions. That said, I do think that while Wall Street moves separately from Main Street, there is a connection and we will inevitably have a recession and it will inevitably take longer to clear out than we had hoped. And buying in at the first sight is going to bite us at some point.

8:30Again, as Emily said, the answer is to try not to sell when it's down and try not to save powder and all that, just to ride through it and focus in the long term. But I don't think that we've eliminated cycles. And I think that there is one at some point that's going to really take people by surprise. Tell you what, I was not expecting to learn in this segment that I bought my first stock when Emily was one years old, but here we are. This is my 30th year investing. So next year, here's to 31. We can't go forward too far looking back on the year without talking about AI and ChatGPT. I don't think anybody would have thought coming into 2025 that OpenAI would be kind of on the defensive by the end of the year.

9:16And surprisingly enough, Google and Gemini are playing offense. They're leading in many benchmarks. The stock is up 60 % for the year. Emily, it's up 110 % since its April lows. Are you shocked by how quickly Google has made a comeback? Or is OpenAI losing steam from what seemed like a once insurmountable lead? I actually am shocked, Travis. And I do think it's maybe too early to say OpenAI is behind in AI. But there is certainly evidence that Google's Gemini has caught up. and in certain cases, I think surpassed their competitors. And it was surprising to me just because OpenAI was basically the poster trial of LLMs, but it really should not be for anybody who took that one level deeper in terms of their thought process, right?

10:04Because Google was able and is able to drop Gemini into all the places that Alphabet, their parent company already operates. Search, workspaces, app, enterprises, right? Google already has access to all those places that enable them to drive traffic and use that data, plus their huge coffers to improve their model training. So, despite the fact that there's not a black and white ranking of who has the best AI, there has been clear strides made by Google. But to your point, Travis, I am still worried for Google shareholders and Google as a company, Alphabet, I really should say, heading into 2026.

10:37And that's not because their AI isn't great. I think Gemini has been an incredible product, but it's because they're fighting to retain revenue, not expand it. Their business is 100 % dependent upon advertising. And as advertising dollars potentially move towards search based off LLMs, what's happening is, is if you're a company and you have your ad budget, you have to determine where to spend that money. The budget doesn't just expand because there's new opportunities. Historically, Alphabet has been that key partner for advertising budgets and they need to retain that customer. So they need Gemini to work and they need to integrate advertising into Gemini.

11:12That way they can show, hey, we're still the best partner we have for your ad dollars. The more LLMs, the more search and other eyes go elsewhere, even if it's only on the margin, it's possible that Google, despite having incredible AI, still loses some revenue dollars. And that's what ultimately concerns me for this company. Isn't it then good that OpenAI hasn't built an ad business though? That seems to be... But they're trying to. Yeah, they're trying. Yeah, we haven't seen... That's a long learning curve. So we'll see if If they can get that. Fun fact that I learned today, because you talked about distribution, Google has five of the top 10 apps in the Apple App Store in 2025.

11:50Just insane distribution. Yeah, these large companies, we're only seeing them grow their scale even deeper. And if I hesitate to say the words that every investor fears, which is this time is different. And we always talk about what the next Amazon, the next Alphabet's going to be. And I increasingly, as I have joined my older peers here, believe that the next Amazon is probably Amazon and the next Google is probably Google. The scale these companies are creating, especially with admin of AI, is only getting bigger by the day. Yeah. So on the Google point, I think Emily's right that there is still a risk, but I am forever bullish on consumer inertia.

12:32and I am forever bullish on the idea that we go to google.com today and if they can offer a credible answer for me, I'm not gonna look elsewhere. So whether it's AI search, whatever, I feel pretty good about that. As for the question of has OpenAI fallen behind, I'm not a techie. Benchmarks to me are like statistics, you know, easily cherry pick to do what you want. I can't say that. What I think has happened though, when OpenAI debuted, it was magic. It was this world that we never saw before. And as Gemini and others have followed, that glow has faded. And that's really what has happened. I think our perspective on OpenAI and what it is has changed more than really the race.

13:13Here's the important thing, though, Travis, to me. It's not really, to me, about who has the most cutting-edge model or who's behind. Because for most of us, they're all moving in the same direction. They're all good enough. But these things are expensive. And in terms of financing, OpenAI was behind from the start. No customers, no revenue streams outside of AI. I don't think they've fallen behind, but I think they've always been behind from the all-important financing position. And that, to me, is the concern. It's not whether or not their model is slightly better than Gemini or slightly better than Anthropic.

13:48It's just who has the cash to throw at this. And that's where I think Alphabet and others are way ahead of OpenAI. And it's kind of always been that way. We just weren't thinking in those terms. One of the tests I always use is, what is my wife talking about? What are other parents at soccer games and basketball games talking about? And that's moved kind of away from OpenAI. So we'll see if those boots on the ground anecdotal insights are true in 2026. When we come back, we are going to talk about something we don't often talk about. It's gold. You're listening to Motley Fool Money.

14:24When Johann Rall received the letter on Christmas Day, 1776, he put it away to read later. Maybe he thought it was a season's greeting and wanted to save it for the fireside. But what it actually was, was a warning, delivered to the Hessian colonel, letting him know that General George Washington was crossing the Delaware and would soon attack his forces. The next day, when Rall lost the Battle of Trenton and died from two colonial Boxing Day musket balls, the letter was found. unopened in his vest pocket. As someone with 15 ,000 unread emails in his inbox, I feel like there's a lesson there. Oh well, this is The Constant, a history of getting things wrong.

15:04I'm Mark Chrysler. Every episode, we look at the bad ideas, mistakes, and accidents that misshaped our world. Find us at constantpodcast.com or wherever you get your podcasts.

15:25Welcome back to Motley Fool Money. This one has a couple of surprises for me. First off, gold has outperformed the S &P 500 by about 4x in 2025. That could have meant a flight to safety or hedging against the falling dollar. But Bitcoin is down about 12 % as we're recording this year. Emily, what do we make of these dynamics? Well, I think what you're supposed to make of these dynamics is that, you know, not all commodities are made equal. In this case, Bitcoin is not seen as a store of value the way gold is. And they're compared to each other. The theory behind Bitcoin has always, it's like a moving target.

16:05And so as we look back on some of these years, I'm always confused. Wait, I thought it was supposed to be an inflation hedge. Oh, I thought it was supposed to be a store of value. And it just doesn't quite seem to be what what's being sold? Well, ultimately, the purpose of it is what people are buying and holding it for. And if people were buying and holding Bitcoin as a store of value or an inflation hedge, then we wouldn't see the correlation that we have seen over the last couple of years, which is that Bitcoin is heavily correlated to equities and not correlated to the performance of other commodities like gold.

16:34So what that says to me is that the people who are buying and holding Bitcoin or trading Bitcoin are doing so more as a trading opportunity, and investment opportunity, a perception of value, as opposed to trying to control their risk or actually trying to hedge their portfolio with it. And it seems like gold, whether that be the central banks of the world, whether that be individual consumers, it just has use cases and demand that is supported by people who are okay sitting on and holding this as a hedge or a store of value. In reality, we just don't see that correlation there for Bitcoin yet.

17:09People might want that. The creators of Bitcoin and other investors might want that to be the case, but it's not the case today. Yeah, the bull case for Bitcoin is how many narratives have there been that have been proven wrong and it's still here, which speaks to its flexibility, which is a weird way of saying it. As for gold, I do think it's interesting. I think probably, though, a prediction for 2026, too much is going to be made about the demise of the dollar. I do think what we've seen here is that because of current events, a lot of foreign players decided to hedge their bets and go into gold.

17:44And even if everybody only does that 5%, 10 % versus the dollar, that's a lot of players, that's a lot of gold, and that's what happened. The euro wasn't looking much better, so that's not a great alternative. Other currencies have their issues. But look, the point to me still is that the dollar, for all of its bruising that occurred this year, there still aren't many better options. Gold is not a good option for actually doing commerce. It's a good option for store value. I think that, yes, if we keep maybe going in some of the red directions that cause the interest in gold, the dollar eventually is going to be in trouble.

18:22But I'm not ready yet to say that this seems like short-term to me and not the beginning of a new dollar age yet. And I'm going to stand by that until things get really worse with the dollar. Lou, it seems like some investors are moving towards safety, as you would think about it, things like gold. We've seen bond yields actually rise, even though the Fed's reducing interest rates, bond yields, which are impacting the mortgage rate and things like that, are actually up over the past few months. Does that tell a story about what the market's thinking going into 2026? Because coming into 2025, it was all go-go, everything's going higher, YOLO.

19:03It seems a little different if gold's hitting all-time highs. I think it tells a story, but I think we have to be careful about what the story is. I don't, I think it's telling a story about kind of thoughts on U.S. deficits, thoughts on trade and how things are going. I don't, I think to some extent as equity investors, we can lean into or observe it and learn from it. But I don't, I'm not ready to say like, oh, flight to safety, therefore equities are doomed. I think there's a lot going on that doesn't involve equities. And so I think I worry about more over-interpreting that than I do ignoring it, if that makes sense.

19:44One of those reminders that the debt market is about 10 times the size of the equity market. The currency market is another enormous market with a ton of leverage in it. So not everything is going to be correlated. When we come back, we are going to play a little game and see how much Emily and Lou were paying attention in 2025. You're listening to Motley Fool Money. See you next time.

20:33Deinen neuen Lieblingsdeal auf sparsim.de.

20:45We're at the point in the show where we like to have a little fun with little post-holiday game. Looking back on 2025, what do you remember and what have you completely forgotten? Lou, I'm going to start with you. What was the first company to reach a$5 trillion valuation? Do you remember this in 2025? Ooh, I gotta say, no, I don't, but I gotta say NVIDIA. Yes, yes, you are correct. Sorry, Emily, you don't even get a guess. That is - That's great, because I was gonna say Apple. I think they hit a number of the other trillion dollar marks, but not that one. It will be interesting. What company do you think is gonna be the first$10 trillion company, Emily?

21:24Well, if history says anything and this IPO happens, I guess it's gonna be SpaceX at some point next year? Yeah, that$1.5 trillion valuation. Yeah, if we get a good IPO bounce. Speaking of IPOs, that was my next question. In dollar terms, what was the biggest IPO of the year, Lou? Biggest IPO of the year? Oh, no. Corweave? That is not correct, Emily. Yeah. I was also going to say Corweave, but you know what? Maybe I'll say Figma. Did they raise more money? No, Medline raised$6.3 billion. That was just recently. I didn't even know that that IPO happened, to be honest. Maybe we need to look into it.

22:05That one is completely flew under. Or not. What was the best performing stock in the S &P 500 so far? And I have all these numbers in front of me. So if you want to go through all 500 companies, we can. But Lou, I just want the top one. What is the top performing stock in the S &P 500? Oh, man. Someone told me the other day it was Build-A-Bear Workshop for like last year or two years. but I don't think that was 2025. It's something AI adjacent, but it isn't going to be Netflix.

22:40Sandisk. Emily, do you have a guess? Yeah, the S &P 500. I mean, gosh, Build-A-Bear certainly doesn't qualify for that at these rates, right? I know Tesla's pulled back quite a bit, but it had a pretty strong start to the year. Is it Tesla? Tesla's not even close. sandisk it is sandisk it is sandisk 561 returns a couple other notable ones seagate technology 250 robin hood 230 micron 213 uh i don't even know where where tesla is down here but they're they can't be more than 100 it's a wild list if you look at the full list i want to go in the opposite direction what was the worst performing stock in the s &p 500 and this is i will give you a hint this is a company that you both are familiar with lou oh man um so okay i was about to say fyserv on just recency but i doubt that that's what you meant with the hint so oh i don't know fyserv emily i i don't know fyserv so i know lou's wrong if anything um i i feel like it might be lululemon although i have to imagine there has to be a worse performer than lululemon right?

23:53Both very, very close. The trade desk is the worst performer. 68 % drop in the trade, trade desk. Pfizer second, 67 % drop. Yeah. This was the really surprising one to me. Decker's brands. So Decker, Decker's outdoor down 51%. That's number three. Lululemon is a number six down 45 % for the year. Those consumer brands have just been absolutely crushed. And like Emily coming into the year, I didn't think that that would be the story of the year. But if you look at what we talked about earlier with tariffs, I guess that's kind of the story is that consumer spending is maybe not going where people thought it was in the past.

24:32The costs have gone up. Maybe that's the tariff impact that we're seeing in the market. Yeah, it's a one-two punch in my opinion. There is impacts of tariffs and that has for the most part been eaten by corporations, not consumers yet. But we have seen a pullback in discretionary spending by consumers. And we always talk about that K-shaped economy, it's certainly impacting consumer brands a lot too. But let's not forget that Decker's, Lululemon, a lot of these companies had incredible run-ups coming out of the pandemic. So a lot of what they've given up this year were gains from previous years.