Tariffs Tangle Markets, Businesses, Investors

In this podcast, Motley Fool analysts Emily Flippen and Matt Argersinger and host Dylan Lewis discuss:

• How the shifting tariff picture is driving uncertainty across markets, economic forecasts, and investor outlooks.
• Target's continuing troubles, and why even Costco can't escape the retail slowdown.
• What's behind Okta's 25% post-earnings pop.
• Two sides of 24-hour trading.
• Stocks worth watching: some private equity firms and Lovesac.

Five years from the beginning of the pandemic, Malcolm Gladwell reflects on COVID responses, his past works, and his latest book, Revenge of the Tipping Point.

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A full transcript follows the video.

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This video was recorded on March 07, 2025

Dylan Lewis: We're taking in the big picture. All of it, everything. This week's Motley Fool radio show starts now.

Emily Flippen: Hey, good to be here.

Matt Argersinger: Dylan.

Dylan Lewis: I'm happy to have you because we have some big time market moves this week. We're going to be talking about that. We've also got Malcolm Gladwell's take on investing and revisiting some of his past work. Of course, you guys have brought your radar stocks this week. Excited to dig into that. We are going to kick off looking at the headlines, though. No shortage of big-picture headlines coming out this week. A lot moving the market around. Emily, S&P 500 down about 6% in the last two weeks, NASDAQ down about 10% in the same time. The market is trying to process tariff news, some zigging and zagging on the policy side, economic data. Where has your attention been?

Emily Flippen: We're all trying to process a lot. If there's ever a time to take a deep breath, right now, it's the time to do it right. Breathe in with me, breathe out. I will say, where my focus has been over the course of the past week, and what I really think started off this whole conversation has been tariffs, and the lack of predictability that the conversation around tariffs has brought. This has really caused this flywheel effect with economic data that has led to a fear around the state of the economy, which I think has then subsequently led to the sell off that we're seeing in the market. The fear around stagflation in particular. For investors who are unfamiliar with what stagflation is, that's a really dangerous combination of higher unemployment, high inflation, and low GDP growth. That's bad because it really ties the hands of the government about what they're going to do with monetary policy because with lower interest rates, that increases inflation, but helps GDP growth. Whereas, higher interest rates lowers inflation, but then potentially hurts GDP growth, and we're seeing some of that happen directionally right now.

Inflation has risen every month since September. It's now at around 3% for January, and expectations are for that to continue to rise this year. Unlikely, the federal government will lower interest rates with those expectations given their mandate to control inflation, and a lot of those expectations, again, driven by the narrative right now around tariffs. With that inflation picking up, that is feeding into the narrative around stagflation, and then we're also seeing some concerns around GDP growth. We're seeing some expectations for GDP growth to actually decline over the course of this year. Again, driven around that hesitancy around the impact of tariffs and the uncertainty about how long tariffs will come, what industries will hit, what potentially retaliatory tariffs will come about. All of that uncertainty is being baked into this economic data, and economists are just shrugging their shoulders right now saying, I don't know what's going to happen. The markets hate that uncertainty. When you combine that with some of the unemployment data that we're seeing this week, there's just so much fear and uncertainty hitting the markets right now.

Dylan Lewis: We are processing tariff talk as it comes in. I'm hesitant to even put out a number because the story has changed so much even in just the past week. We do have that regularly scheduled jobs data though. Matt, February report out this week. What did you see?

Matt Argersinger: I feel like we could be on the leading edge of a storm here with employment. The number itself was fine. The economy added about 150,000 jobs. In February, that was a little bit lower than, I think what most analysts were expecting. But it was better than January, which was revised down to 125,000 jobs. But important thing to remember about this February jobs report is the data is as of February 12. It doesn't include really any of the doge actions by the government, the federal layoffs. It does include the hiring freeze that the Trump administration put in place when they took office back in January. I think that's why if you look at federal employment, it was down 10,000 jobs during the month, and that probably because of retirement or natural attrition, and the jobs just aren't being replaced. But I do expect that when we get the March data and the April data and subsequent months, we're really going to start seeing the impact of these jobs layoffs that we're seeing.

Dylan Lewis: If you're looking for some indication on that, outplacement firm Challenger and Gray, giving us some sense of what is going on with employment data outside of what we get from the federal government. From their data, US employers announcing over 170,000 layoffs for February. About a third of those from Elon Musk's Department of Government Efficiency. What it feels like we're looking at here a little bit, Emily, is a lot of companies trying to process what the tariff elements might mean for their own cost structures and what that means for their hiring decisions a little bit as well.

Emily Flippen: That's exactly right. It all goes back to that uncertainty. If you're trying to make business decisions without visibility into what not only the economy looks like, but what your cost structure looks like, where you're getting your suppliers from, all of that feeds into, well, let me do what I can to control my current costs. A lot of that feeds into usually what is the largest source of costs for companies, which is their hiring pool. While we do see some of these jobs numbers coming out to Matt's point, been officially not as bad as some people like myself feared, we do see unemployment taking up a bit. I believe unemployment did take up only around 0.1% over the course of the past month, around to 4.1% from 4% in January, but that's only over the period of one month. That's a pretty dangerous trend, again, especially when you're combining with higher inflation and lower GDP growth.

All of that points to that stagflation. Now, these are just temporary trends. One month is not a trend within itself, but should those trends continue month after month, quarter after quarter, that's when things start to get a bit dangerous. I do know that the private jobs data that we saw earlier this week from ADP, which saw private jobs add nearly half of what they were expected to add for February, that's what scares me a little bit more as opposed to what we're seeing happen at the federal level. You really want private enterprises to be making up for what we see happen, the federal government and the craziness that's happening there, I think is separate from what we see management actually happening and the decision making that's happening in private enterprises, because should they start to make decisions that are fearful for the broader economy, that starts to create the long-term trends that could result in a broader sell off in the market.

Matt Argersinger: I think the uncertainty point that you both are making is it cannot be overstated enough. It's one thing to have a lack of certainty if you're a federal government agency, we know that. But on the private side as well, all these major corporations, especially multi-national corporations who are uncertain about what their sourcing is going to look like in the near term with all these tariffs. I just think there's so much uncertainty. It's an amazing thing to step back. Six weeks ago, new administration is coming in, a very general consensus was, very pro economy, pro capitalist was coming in. Less regulation, more deal making. It was going to be boom times for the economy and the stock market. Here we are about six weeks later, and I think there's more uncertainty, more fear in the market. Dylan, you pointed out to some of the numbers at the top of the show. It's remarkable where we've come in such a short period of time that the sentiment right now certainly among investors is actually pretty negative.

Emily Flippen: I just want to reiterate, this can change so quickly. We have seen, as Matt pointed out, this changed quickly over the course of the month. While it may sound scary for investors to sit here and be like, "Oh, my gosh. Unemployment's picking up, inflation's picking up, GDP growth is concerning. All of these companies are firing people potentially." We've said the word uncertainty about 1,000,001 times over the course of this podcast, and we're only a few minutes in. All of that saying, all of this could change pretty quickly. While there is fear and uncertainty driving the market, that usually does present opportunity for investors, especially long-term investors. As long as you're not sitting here trying to day trade the markets, as long as you're doing the right thing, which is usually sitting on your hands, taking a long-term focus, this is not something that anybody should be too fearful about in their portfolios. You should be aware about, but not overthinking.

Dylan Lewis: Matt, you struck a little bit of a cautionary tone earlier when you were talking about the state of things. How is that flowing into the way that you're thinking about what you buy, your cash position, stuff like that for 2025?

Matt Argersinger: Well, it does have me thinking more defensive, and you guys know the stocks I tend to talk about. I'm already talking about mostly defensive stocks anyway. If you look at the year-to-date returns, healthcare sector for one, is one of the best performing sectors. Financials are doing pretty well. Consumer staples are on fire. There are parts of the market that are doing just fine, and I think that's because they tend to be the most defensive and more conservative places where investors tend to hide. I think there are things that are going to work.

Dylan Lewis: Coming up after the break, we're adding in retail results to the big picture and checking in on some big earnings movers. Stay right here. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. I'm Dylan Lewis, here on air with Matt Argersinger and Emily Flippen. We are keeping the big picture in view with updates from some of the country's biggest retailers. Shares of Target down over 5% this week following earnings, continuing their skid. Now, down 30% over the past year, over 50% from 2021 highs. Emily, when will the bleeding stop here?

Emily Flippen: If you had asked me that last quarter, I would have said last quarter was probably the bottom here for Target. I'm actually relatively surprised to see yet another quarter of impressively poor performance from Target. They saw a sales decline for all of fiscal 2024 of nearly a percent, a similar decline in earnings per share. Now, I will say the good news is, it did seem to firm up just a little bit in the fourth quarter. They saw a plus 1.5% increase in staying same-store sales. Even with that same-store sales growth, they still saw 3% lower total sales and a nearly 21% decrease in operating income. Of course, management said, there were a lot of factors that went into this, and they attributed some of this to the uncertainty around consumer spend of which I will give them credit there.

We have seen that narrative driven by a lot of retailers across the market today. Tariffs obviously playing into that. But they also chalked a lot of it up to cold winter weather. I don't think there was enough discussion here around merchandising at Target. I continue to think that this is what Target is fighting against that, they're just struggling to perform against the other retailers of the world like Walmart and Costco that are much more focused on necessary spend as opposed to discretionary. Their merchandising has always been heavily oriented toward discretionary spend, a little bit higher-end discretionary spending, which in a looser economic environment tends to do well. But unfortunately, for Target, over the course of the past year, people have been trading down. I think as people have been trading down to the Walmarts of the world, they've realized, "Hey, Walmart's not that bad." You know what? Target may be a little bit overpriced. I think they need to do more with merchandising to convince consumers to come back to their stores.

I say this as a loyal Target customer myself, they truly have not done a lot to convince customers to come back to stores. That being said, I will just point this out. This business after this fall is trading now at something like 12 times trailing earnings and has a 4% dividend yield. Dylan, I said this last quarter. I'll probably say it again now. Can it really fall further from here?

Dylan Lewis: I don't know, Emily, but I love the characterization of impressively poor. [laughs] It almost sounds like a compliment, and then you really dig into it, and you realize, "No, that's a dig." In addition to a lot of the macro issues, Target also contending with a 40-day boycott in response to the company moving away from DEI policies. We are also seeing consumers voting with their dollars. There's an economic blackout movement affecting not only Target, but Walmart, Amazon, I believe, Costco as well. Matt, the environment for retailers, very difficult right now. We got a sense of what's going on at Costco because they reported they are typically a best of breed retailer. Even they are not immune to a lot of the issues that we're seeing.

Matt Argersinger: That's right. I had to actually clean my glasses this morning because I was looking at Costco's stock price. It's down 8%, at least as of Friday morning, and Costco never declines like that. Did they raise the price of the hotdog or something? I wasn't sure what was happening. The stock has just been on a steady escalator higher for what seems like forever. It can't be because of the results, guys, because the results were fantastic as usual. Sales up 9.1% to 62.5 billion. US comp sales up 8.3% year-over-year. What large US retailer is doing numbers like that? Certainly, not Target, as we talked about. E-commerce sales up 21%. Food, high single-digit growth, non-food categories though. Mid-teens growth and management pointed to big ticket consumer electronic products as a huge seller during the holidays. Of course, Costco, the strength there is the membership base, paved numbers up 6.8% to 78.4 million.

Now, why is the stock selling off on Friday? Well, maybe a few reasons. They're not immune to the tariffs, which we talked about. About 1/3 of Costco's sales come from other countries, and the lion's share of that actually comes from China, Mexico, and Canada, which, of course, are the three favorite countries for the administration's tariffs. That issue is there to contend with. Margins were actually also slightly down year-over-year. You mentioned, Dylan, this economic blackout, which we don't know what that impact of that is going to be, but the stock was already expensive coming into the report. I note that Costco is trading for 55 times forward earnings. That is a higher valuation than NVIDIA and Amazon, just to put that in context. Does it deserve a premium valuation? Absolutely, but I'm not sure that much of a premium.

Dylan Lewis: One of the things I'm interested in taking a step back here on the retailer side is we have seen a lot of retailers emulate the Costco model of membership. We've seen Walmart move into that direction. Obviously, Amazon pioneering that with Prime over on the e-commerce side. Do you feel like in this tough retail backdrop, the businesses that have that membership have a little bit more ballast than one that is reliant on getting people in the store all the time before those dollars come in?

Matt Argersinger: Absolutely. It's a huge strength, and it's been that way for a long time with Costco. That recurring revenue that's so key to the business, but also just the loyalty from its customers that want to keep coming in because they're paying that fee.

Emily Flippen: I don't actually think it's the fee that causes it though. I actually think it's an understanding of the customer. I don't think it's the fact that I am paying a membership fee that causes me to say, "Oh, gosh. I have to go to my Costco this time." I think it's the fact that Costco and other membership-based business models have a true understanding of, here is the type of customer, and here's what they need, and here's the reason why they're visiting. I think part of the reason why we're seeing a boycott at a business like Target is, Target has truly lost understanding of who their customer is. This is the expression of that. You could argue the same thing has happened for the Amazons of the world. When you start to lose understanding of who your core customer is, it makes it a lot easier for your customer to come out and say, guess what? I'm not shopping here anymore, you're replaceable to me.

Dylan Lewis: I'm going to move us out of retail to hit one more big earnings mover this week. Not everybody down. Shares of identity management company, Okta up over 25% following earnings. Emily, what is behind the market's excitement here?

Emily Flippen: Okta is always that type of business where when it's good, it's good, and when it's bad, it's bad. I'll tell you what this quarter was, what was described by CEO Todd McKinnon was a blowout quarter? They had over billion dollars in booking for the first time ever record performance in both their core Okta and off-zero platforms. Revenue growth of 13% doesn't sound like much, but their backlog indicator, that's the remaining performance obligations. That was up 25% in the quarter. Great guidance heading out into 2025, and what otherwise is the year where enterprise companies are not providing a lot of great forward-looking indicators of growth. It was a great quarter for Okta. Again, there was expectations heading into this quarter that were maybe just a little bit muted in comparison to others in the place. I will say, one thing stood out to me in this quarter that I feel like this company is not getting enough flack for, and that's their dollar-based net retention rates. It's at 107%. Now, North of 100%, always a good thing.

Plenty of companies would kill for that number, but it's been declining here for two years. That's down from 111% at this point last year. It doesn't really make sense to me because their average contract value for all of their customers has been rising at double digits for years now. Their contracts are larger, growing faster. Really, that number should be stabilizing. Management has said that their gross retention has also been strong. It's not a matter of just losing customers. It makes me think they're not doing a great job of cross-selling or up-selling their products. While this is a great quarter for Okta, that is really the metric that I'm going to be watching in future quarters to make sure that that performance will continue.

Dylan Lewis: Emily, the tariff story obviously playing more into companies that have physical goods, and software is digital. But ultimately, a lot of the customers for a company like Okta or other enterprise companies may be subject to some of those whims. What are you keeping an eye on to get a sense of what's going on in the enterprise market and how that might flow through and be biting those companies?

Emily Flippen: I think everybody in the industry, and this applies to Okta, as well as a bunch of companies, MongoDB being another good example, I'm looking at their guidance heading out into fiscal 2025, and so many companies are being incredibly conservative with the guidance that they're giving. I think that's prudent of them just because as we talked about the beginning of the show, employment numbers coming down, cost structure coming down. That is the critical number to watch.

Dylan Lewis: Emily and Matt, we're going to have you guys a little bit later in the show to Top Radar Stocks. Up next, best-selling author, Malcolm Gladwell reflects on a response to COVID and the book that kick-started his book-writing career.

Welcome back to Motley Fool Money. I'm Dylan Lewis. This March, marks five years since early COVID lockdowns and the initial pandemic responses of 2020, and this year also marks 25 years since Malcolm Gladwell's first book, The Tipping Point was released.

Gladwell revisited concepts from his best seller and examine modern issues like COVID and the opioid crisis in his new book Revenge of the Tipping Point. Ahead of the March anniversary, Gladwell and I chatted about how he looks back at his own work, our response to COVID, and how his approach to investing has changed. It's great to have you on because I'm a longtime fan. I've read most if not all of your books, I've read a lot of your New Yorker work going all the way back to the tipping point 25 years ago. When you published that book, your original premise was this idea that epidemics are not just things of diseases or viruses. They are these things that happen with ideas and trends. I'm curious, was it inevitable that you would revisit that idea after we had a global pandemic in 2020?

Malcolm Gladwell: Kind of. I felt like I talked about this thing. All the ideas that I talked about in the original tipping point seemed very novel at the time. Then they went from being novel to being omnipresent. It was a different experience writing this second go-round, but the idea still seem to have a lot of relevance.

Dylan Lewis: What was that process of revisiting the book? Because I think I've heard in the past that you're not big on going back and rereading books and rereading some of the ideas that you'd originally published.

Malcolm Gladwell: It was the first time I'd reread the book since I published it. I was originally just going to do a revise on its 25th anniversary, do a 25th anniversary edition of the original tipping point. But then I got into it and realized I wanted to write something new, which I was halfway through, and I realized that the chapters I was revising were 100% different, and I wanted to talk about COVID and the opioid crisis and a million other things that had happened in the intervening quarter century and so it just made sense to start over.

Dylan Lewis: You started fresh, but you also had the benefit of looking back on that work and with the perspective of 25 years. I think I saw a TED Talk you gave where you're talking about things like broken windows theory. With the hindsight that you have now being able to revisit some of that, how did that flow into the process knowing now some of the stuff you got right, some of the stuff you got wrong, or maybe how you wanted to approach things a little bit differently this time?

Malcolm Gladwell: You're right. I had a long discussion. The initial book was prompted by my trying to make sense of the sudden drop in crime in New York City in the late '90s. I argued that crime was a contagious social behavior, which I still believe many people believe. Out of that argument, I fell very in love with broken windows policing, which was the norm in the '90s. I now have a much more, I think, nuanced position on what worked and didn't work about '90s era, New York City, big city policing. I think that's one of the fun things about revisiting work that you've done a long time ago, is that it is an opportunity to prove to yourself that you're still learning things. The scary thing would be to revisit a book that you wrote 25 years ago and think that you shouldn't change a word.

Dylan Lewis: Nobody's that prescient, right?

Malcolm Gladwell: No, I was thinking the opposite, that you would be so brain dead that not a single new thought have occurred to you in a quarter century.

Dylan Lewis: That is a static mind, I guess.

Malcolm Gladwell: That would be terrifying. I was gratified to learn how much of my original book I was quarreling a little bit with.

Dylan Lewis: I think when I originally read The Tipping Point and when I went back to it in prep for this conversation, was struck by this idea that the book is very optimistic in its outlook, and it's very much about small ways to create larger change. Revenge in the title here has a bit of a different connotation to it. On the one hand, I think it's a little bit of the era we're in. We have so many reasons to be very optimistic. We have AI as this magic type of technology. We have just addressed a worldwide pandemic in record time. That's incredible. But it feels like even underneath some of those more reasons to be optimistic, there's a lot of distrust, there's a lot of differing public opinions. You get into this idea of the overstory in the book, it's a meta-narrative. What do you feel like that is right now and what do you think versus what it was when you wrote The Tipping Point originally?

Malcolm Gladwell: Well, I think when I wrote The Tipping Point originally, which was in the late '90s, we were in an unusually optimistic moment. Every major social problem was in steep decline. When '90s began, if you asked Americans what the biggest problems in the country would have been they would have said crime, teenage pregnancy, youth smoking. By the end of the '90s, those are all vanishing. Teen pregnancy drops precipitously. Teenage smoking used to be this thing that everyone was fretting about. Teens just stopped smoking. Then crime in New York City was a tiny fraction by the early odds of what it had been in the early '90s. The Clinton presidency in retrospect, was in America, an unbelievably calm, unruffled moment where the single biggest scandal was the president had fooled around with one of his interns. That was it. Today, that just seems ridiculous. I don't even know whether that would even get a headline today. That was the context in which I was writing the book, and I couldn't help to have been swept up in that euphoria about the future.

Dylan Lewis: What do you think that outlook is now?

Malcolm Gladwell: Well, I think simply that there is an absence. If in the '90s, we all agreed on the fact that things were going well, I think today we're not agreed on anything. That you can, as you just said, plausibly make a case that things are going well as you can make a case that things are going disastrously. Either AI is going to save us or it'll doom us. Either Trump is going to fix the federal government or he's going to destroy it. I could just go on. It seems like we're either on the verge of a golden age of medicine or we're going to get swamped by another virus coming down the pike. There's so much uncertainty, I guess. It's hard to get a handle on what happens next.

Dylan Lewis: I think you're probably one of the first people to reflect on COVID in a book where people really felt like there was enough time and distance for it to make sense. Five years since early cases, I think is a healthy enough distance that people are ready for that message again. We're going to be seeing a ton of stories, articles, coverage as we pass a lot of these anniversaries, and I'm sure for the next 5, 10, 100 years, it'll probably be something that people spend a lot of time studying. Where would you like to see more of that discussion and more of that focus as we look back and do these retrospectives on this crazy unprecedented period in a lot of ways?

Malcolm Gladwell: Well, the key to a lot of policy, I think, is understanding the diversity of human responses to COVID. I touch on one piece of that in my chapter on COVID in the book where I talk about the fact that the assumption we had that everybody was bearing an equal risk of passing on the virus to others is completely false and that a tiny portion of people are really the ones who do all the job of spreading, and if you know who that tiny portion is and you simplify your attack on COVID. But I would generalize from that and say that an enormous amount of the political and social dislocation from the epidemic was caused by the assumption that children were at risk or equally at risk for the virus. That's why so many schools were shut down in so many places, and it was the shutting down of the schools that was so incredibly divisive.

If we better understood how at-risk children were for a viral epidemic like this, we could have had a lot smarter policy on school. If we kept schools open far more, I think the fallout from the political reaction to the virus would have been a lot less. That's one area where I feel like, if we can sort that out for next time, we'll be doing well. This language we had that we are all equally at risk, we are all equally to blame, we all need to equally take precautions, just doesn't work. It doesn't ring true to people and correctly, doesn't ring. This isn't true. I don't think you will be able to pull that off a second time.

Dylan Lewis: Has the way that you invested changed over the last 25 years?

Malcolm Gladwell: Well, for a long time, I had a Schwab account where I would make highly speculative, very small investments for fun. After almost without exception losing money in those trades for 15 years, I finally gave it up. Now I'm Mr. Index fund. I have turned my back on that game.

Dan Boyd: I bet you sleep a little bit better.

Malcolm Gladwell: Well, I also do a thing where I only check my balances once a year.

Dylan Lewis: That's like a system you've put in place, knowing yourself.

Malcolm Gladwell: It's like, what's the point? When I retire, I'll check them out. I'm not using the money yet, I'm not retiring, so why would I bother checking it until I'm retired? Does it make any difference? I will only boost about one thing.

Dylan Lewis: I'd love to hear you boost.

Malcolm Gladwell: I have two moments of extraordinary market appreciates. Immediately prior to the 2008 meltdown, I went 100% cash. I sold every single equity I owned.

Dylan Lewis: What told you to do that at the time?

Malcolm Gladwell: I don't know. I just thought things seemed frothy. Then in December of 2019, two months before COVID, I bought a very large short on a stock market, which I cashed in to great effect several months later. [laughs]

Dylan Lewis: I think you'd like to tell us about the future.

Malcolm Gladwell: Thank you very much. I could retire on those two things alone.

Dylan Lewis: If you make any big moves anytime soon, just give us a heads-up. [laughs]

Malcolm Gladwell: Because I've been writing about viruses for years, I knew a bunch of urologists, and I was chatting with one at the end of 2019 I was like, How serious is this SARS thing in China? They're like, It's serious. It's like, Okay, so I bought the short. Then I called him up next I was like, so now that we know what this thing is, is it a hard target? No, it's totally easy, we'll have a vaccine in no time. Then I made sure I cashed. [laughs] That lightning, that's like a stop clock once a day, it's never happening again.

Dylan Lewis: Listeners, you can get Revenge of the Tipping Point, wherever you get your books, and you can catch more of my conversation with Malcolm Gladwell over on our Motley Fool Money Podcast for you. He gets into how he'd reimagine the world of insurance and his recommendations for fixing the rat problem on my block in Washington, DC. Up next, Matthew Argersinger and Emily Flippen return with the stocks on their radar this week, stay right here. You're listening to Motley Fool Money.

As always, people on the program may have interest in the stocks they talk about, and Motley Fool may have formal more recommendations for or against some products only based on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Motley Fool only picks products it personally recommends to friends, like you. I'm Dylan Lewis, joined again by Emily Flippen and Matt Argersinger. Matt, the NASDAQ is going the way of the late-night diner. The exchange is planning on offering 24-hour trading for stocks. If all goes according to plan, in the second half of 2026, investors will be able to buy and sell stocks on the NASDAQ at any time of the day. How are you feeling about 2:00 AM buy orders?

Matt Argersinger: Dylan, I love late-night diners. I hate this idea, though, for stocks. I do not want to be waking up at 2:00 in the morning to see how my stocks are doing. Imagine some bad news hits a company late at night, say, 11:00 PM Eastern, and most retail investors, at least on the East Coast are asleep by then. They wake up in the morning, their stock is down 25%, they're mad because they couldn't trade it or sell it if they wanted to. I just worry what this does to our attention spans, to our sleep schedules, and also just how we think about stocks. Because the beauty of an exchange closing in my view, that we have here in the US right now with our major stock exchanges, is that it's the pause that refreshes. If there's bad news, the market's crashing or there's just something negative going on, the market closes, and investors get to sleep on it and think about it, and it makes other things happen. If the stock market is consistently open, you could see a situation without circuit breakers, stocks could be in free fall forever just because everyone's piling in and it doesn't stop.

Dylan Lewis: I think part of the pitch here, from what I've seen on reporting, is that opening up the US markets to 24 hours, in theory, opens it up to more international investors when those investors are aware. But, Matt, I do hear you on what it may do for Americans that are investing and paying attention to the markets. Emily, what's your take here?

Emily Flippen: I personally think there's a lot of unwarranted fear-mongering around the idea of 24-hour trading. If somebody doesn't want to wake up at 3:00 AM to trade, don't wake up at 3:00 AM to trade. I think we should be trying to educate people around the values of long-term investing, as opposed to limiting access to trading, just to cater to the lowest common denominators. Just my two cents. I do think that the idea that 24-hour trading is bad is the same argument that people made when we started trading over the Internet. They were like, well, it's great to limit access, you have to call up your broker, it prevents people from making these emotional decisions. But generally, I think having more liquid, more accessible, more efficient markets is better for everyone. That being said, I understand some people may make poor decisions as result, but again, goes back to focusing on education, and hopefully, everybody listening to this podcast is a true Fool at heart and understands that if you wake up in the morning and stocks are down, which by the way, you can still trade aftermarket right now, but it's mostly limited to high net worth individuals and institutional investors, so this is further democratizing access. But still, if you wake up and your stocks are down, hopefully, you aren't panicking. You are long-term buy and holding, and you're just getting your coffee going about your day as usual.

Matt Argersinger: This is terrible idea. [laughs] I have the final word.

Dylan Lewis: I love that Emily invoked the democratization element because it's such a winner when you're making an argument.

Emily Flippen: It's a great word.

Dylan Lewis: I will land on Matt's side. I like having some discipline forced on me, but I understand, and it's nice for more money to be flowing into the US markets. Let's get over to stocks on our radar. Our man behind the glass, Dan Boyd is going to hit you with a question. Matt, you're up first. What are you looking at this week?

Matt Argersinger: Sorry, Dan, breaking the rules a little bit. I'm looking at a basket of stocks. Looking in particular at private equity stocks, which guys have been in a free fall over the past month. I don't know if you've noticed, but you've got stocks like Brookfield down 15%, Blackstone down 19%, Carlyle Group down 19%, Apollo Global Management down 21%, and KKR, the big loser, down 27%. This is supposed to be an amazing environment for these major private equity firms. If you think about asset prices are down, these firms have no problem raising capital. They raise a new $10 billion fund every other day, it seems. We're in a supposedly less regulatory environment, so deals can happen. They've got billions in dry powder. Most of them pay nice dividends. Why are these stocks down so much over the past month? I'm looking into it, not making any moves, but I'm interested to see if there are any bargains among the basket.

Dylan Lewis: Dan, the tickers there Brookfield, BN, Blackstone, BX, KKR, KKR, and APO for Apollo. You have a question or a comment here for Maddy's private equity basket?

Dan Boyd: Private equity is down? Well, I say, good. An industry based on buying something almost profitable or profitable and then immediately making it worse shouldn't exist.

Matt Argersinger: Dan is joining the economic blackout with the rest of the people around the country.

Dylan Lewis: There you go. Emily, what are you looking at? What's on your radar this week?

Emily Flippen: I think Dan's going to have a hard choice this week. But the stock I'm looking at is actually Lovesac the ticker is LOVE. The reason it's on my radar is actually because I have a very expensive sactional split up into about a million and one different boxes sitting in my living room right now, so my weekend is going to be painstakingly assembling this sactional. But it actually is a very interesting business model. This is a company that sells initially giant beanbags, of course, Lovesacs, but has expanded its business into a number of different products, including these sectionals that are very modular in design. Now, sales have declining for Lovesac over the course of the past year. I think part of that is they have a challenge with their business model with the fact that it's hard to get repeat purchases.

But I do very much like this management team, and I think they're doing a great job of upselling customers. As somebody who went into a showroom myself and was successfully upsold, I think they're doing a great job with their cost management structure, as well, one that I am personally interested in learning more about and adding to my own radar.

Dylan Lewis: Dan, a question about Lovesac, ticker LOVE.

Dan Boyd: My wife has been threatening to buy one of these for our den for a while now, and I'm terrified because they're extremely expensive. I don't really see the utility of a $5,000 couch, but I guess the market's excited about it.

Emily Flippen: I can tell you what the sales lady told me, which is, A, you can, if you are a Costco member, get them through a bit of a discount through Costco or on sales during President's Day weekend, or Labor Day weekend. They have occasional sales and they're modular. They move with you, they can adjust with you, so there's options out there, Dan.

Dan Boyd: Sure.

Dylan Lewis: Dan, it doesn't seem like you're really sold on either radar stock or a basket of stocks this week. Where are you going?

Dan Boyd: Well, I'm certainly not going to private equity, Dylan. Let's go Lovesac.

Dylan Lewis: Lovesac. Maybe you'll give Emily a hand putting that together this weekend.

Dan Boyd: No.

Dylan Lewis: Emily, Matt, thanks for bringing your radar stocks. I'm Dylan Lewis with Dan Boyd. We'll see you next week.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dylan Lewis has no position in any of the stocks mentioned. Emily Flippen, CFA has positions in Okta. Matthew Argersinger has positions in Amazon, Blackstone, Brookfield Corporation, and Okta. The Motley Fool has positions in and recommends Amazon, Blackstone, Brookfield, Brookfield Corporation, Costco Wholesale, KKR, MongoDB, Nvidia, Okta, Target, and Walmart. The Motley Fool recommends Lovesac. The Motley Fool has a disclosure policy.