In this episode, the Resilient Investors podcast team discusses investment approaches, focusing on the differences between active and passive investing. They explore the implications of each approach, the challenges active managers face in outperforming the S&P 500, and the concentration of returns among a few major tech stocks. The conversation then shifts to the upcoming IPO landscape for 2026, highlighting notable companies and the factors influencing their public offerings. The hosts emphasize the importance of understanding market dynamics and investor behavior in making informed investment decisions.
Main Takeaways
- Active management involves hands-on research and decision-making.
- Passive investing aims to match market performance with lower costs.
- The S&P 500 has become concentrated in a few major tech stocks.
- Investors often misjudge their risk tolerance based on market performance.
- The IPO market is influenced by regulatory environments and economic conditions.
- Investing in IPOs carries risks, especially for retail investors.
- Most profits from IPOs are made by early investors, not public buyers.
- Market dynamics can lead to volatility in stock prices post-IPO.
- Understanding the management team behind a company is crucial for IPO investments.
- Private equity offers unique opportunities for investors willing to explore beyond public markets.
Full transcript of Episode
Victor Gaxiola: Welcome back everybody to the Resilient Investors podcast today. We are actually going to do a deeper dive on some areas regarding investment approaches, investment strategies, and again, joining me is Carolyn and Kim. So we're going to get into a nice little conversation here about a lot of the work that we do day to day, especially the work that I concentrate in because within the team, I do a lot of the trading, I do the investment management. And even though, as we've mentioned in previous podcasts, that we serve as an investment committee, all three of us making decisions on what our models look like, the composition of the models, in many cases, the individual investments that make up the models. When it comes to trading, when it comes to making changes, pivoting, and actually executing buys and sells, that's me, I take care of that. And of course, it's based on the guidance from the investment committee and conversation. So today, we really wanted to talk about two things. The first thing is talking about approaches to investing, and we'll speak and do a deeper dive on active versus passive investing approaches. And then second, we'll get into a conversation regarding IPOs, which is something that you hear a lot about here in Silicon Valley, especially with a lot of companies down Sand Hill Road to get their funding from a venture capitalist and then go out with the goal of eventually getting into an initial public offering to raise some cash. So we'll kick things off. How does that sound?
Kim Gaxiola: Sounds great.
Carolyn Rowland: Sounds great.
Victor Gaxiola: Sounds good. All right, so let's start talking a little bit about the difference between active and passive investment. And I think just from a standpoint of definition for those who may not be aware that there is a difference. So let's talk about active. So when people start talking about active management or active approach to investing, what they're really looking towards is a real hands-on approach. And that hands-on approach is meant to outperform the broad markets. The people who are approaching, using an active management style typically do a whole lot of research. There's forecasting involved and a lot of it is based on their experiences to the decisions on what to buy and more importantly in many cases what to sell. The active manager in this particular case is typically has a certain amount of flexibility in order for them to pivot quickly. So based on the news cycle, based on geopolitical events, based on what might be happening in the economy. The nice thing is that the active manager can make a decision very fairly quickly about what they want to buy, but more importantly again, what they want to sell.
Now, as a result of there being an active portion, which is very proactive in this specific case, the active approach tends to carry some costs because obviously you're paying for that expertise, you're paying for the research, and you're paying for the experience. And so that's really the main case- when it comes to active investing.
On the flip side, when you look at passive investing, in that particular case, you're really just looking to match the market performance. Usually it's tied to an index like the S &P 500. And in that particular case, there's really no picking involved because you're really just tying your particular investment style to an index where the selections of what's in that index have already been made. So all you're really doing is kind of buying a slice of an index or buying the entire index. So you look at investments where you're basically buying all 500 stocks that are within the S &P 500. So there really is no picking involved. It tends to have lower turnover because those indexes don't change as often as, let's say, an active manager would change their own investment strategy. And as a result of there not being as much turnover, they tend to carry lower cost.
Victor Gaxiola: So those are the two from a definition standpoint, those are the two primary definitions between an active approach versus a passive approach. However, therein lies, you know, a little bit I would say, and Kim, I know you've been doing this for a long time as well, a little bit of a debate as to which approach is better. And so there are specific cases where one approach might be better than the other, but in your case, I mean, what do you like, active or passive or a little bit of both?
Kim Gaxiola: Yeah. I like both for different reason and I would say, you know, if anyone ever says that they are truly a passive investor, I would challenge them to say, what does that mean? The reason being is that- typically a lot of passive investors, you know, maybe you would say it's a do it yourself investor will pull the trigger on when to buy and when to sell. And typically that may not be at the right time. So you could be actively passive there, which then you're just an active manager, right? So it is kind of funny that whole situation. If you really were to buy and hold and just, you know, close your eyes and close your ears and not listen to anybody, then you truly would be a passive investor.
Victor Gaxiola: Ha ha ha.
Kim Gaxiola: But nine times out of 10, that is not what we see. And so I think there's, um I would say actively passive is sometimes a great way to be. That's some of our strategies and some of our strategies are more active. I think it depends on the asset class, what is more important when you're talking about bonds and for what this is my biggest area where I believe in active management is because there's too much that goes into the fundamentals of the company and whether they're going to pay those bonds. Gosh, a high yield index. I can't imagine being in a high yield bond index. There's no active management. What happens when some of those companies go bad? So I think it really depends on where you are.
Also, what part of the economic cycle are you in? Because, you know, I would like to see more active management if you are on the declining segment of an expanding economy. And, you know, maybe it's easier to ride the market up if you're at the beginning of an economic expansion. you know, like anything,
Victor Gaxiola: Mm-hmm.
Kim Gaxiola: The most important thing I would say is that when you're investing in an index, all you are doing literally is, you participating in the up, but you're also participating in the down. So I like to say, if you want to be in something that has no brakes, a car that has no brakes, that's passive, that's fully passive investing. And so, that car is going to go uphill, but that car has no brakes on the downhill. And that is always.
Victor Gaxiola: Mm-hmm.
Kim Gaxiola: Not a comfortable place for me to be in.
Victor Gaxiola: Well, a lot of what prompted us wanting to have this conversation is I came across, beginning of the year, we're looking at the outlook for 2026. And there was an interview that was actually placed on The Street discussing the difficulty of active managers will face sometimes in beating the S&P 500, which is really a passive strategy. however, there are a number of reasons why the S&P may outperform even an active approach. And so I wanted to do a deeper dive in that and kind of explain some of the reasons why it can be very difficult for a manager to beat the S&P 500 when you're faced with it. Because people do follow the S&P 500. You look at it, you look at the results of the day, they're looking at the Dow and you're looking at the S&P. And so if the market is up, you can feel confident that things are at least looking good if it's down. But sometimes that doesn't really tell the...the full story because if you peel the onion a little bit what you find is that there is this concentration problem and this was discussed in this interview. The S&P 500 really moved from this diversified basket of 500 companies to an index that is really dominated and has been dominated by these mega cap tech stocks in the last couple of years. I mean historically there's been a broad range of companies that were really driving the returns. recently, less than 5 % of the index holdings, primarily here at the Magnificent 7, has been responsible for over 70 % of the gains. So you really see how there's this concentration where you say, if it was a football team, let's say you had a roster of all these football players, those MAG 7s are the guys that are like 6'5", you know, really built and athletic versus like a Pee-wee team flag football team, you know, by comparison. They really are going to push their weight around. The Mag-7 stocks for those who may not be aware, and I find it very hard that anybody would not be aware of the Mag-7 stocks, are companies and names that you know. These are mostly in the tech space, and that market concentration... has really made an impact on the market performance, specifically of the S&P 500. As a matter of fact, these seven accounts, these seven accounts alone, or these seven companies alone, accounted for roughly 33.8 or close to 34%, more than a third of the entire S&P 500 value. This means that if these seven stocks go down, the entire index often follows, even if the remaining 493 stocks are doing well. So you can really see that there's this concentration issue that takes place. And then when you think about what's been the hottest topic in the last couple of years, which is AI, guess what? Those Max 7 stocks have participated in the AI gold rush.
Kim Gaxiola: Yeah. Well said, that was a lot there.
Victor Gaxiola: Yeah, it is. Well, I mean, but I think it's important because people will look to, know, how come you can't beat the S&P 500? Well, it's very difficult to beat the S &P 500 when all the things, you know, there's that concentration issue, you know, which really is carrying the weight and pushing the S&P 500 index around, but also the fact that the environment has been very proactive for those specific stocks to do well. You know, these those stocks have actually performed so well.
Kim Gaxiola: Uh-huh. I always like to say that we study people's behavior in this business. And so it's very common when the market has a couple really good years for clients to ask us to step on the gas a little bit more, go faster, right? Earn more. I can take that risk.
Victor Gaxiola: Mm-hmm. Mm-hmm.
Kim Gaxiola: And about the time that investors want to take more risk is a time where they should probably be pulling profits. Because boy, that does worry me. Risk is a moving target for everybody. When we hire a new client, a new client comes to us and they tell us, you know, if they're a moderate investor or they're aggressive or what have you. That changes over their lifetime, not just because they're getting older, but because of what the market is doing and who they're being influenced by. And so as the market starts, you know, going faster, people want to take more risk. But the minute the market pulls back, they're like, “No, I don't want to be taking that risk”. And we see ourselves again in a cycle of buying at higher prices and selling at lower prices because their interpretation of how much risk they can handle changes. So I think that that conversation does go along with this whole active passive and be careful what you ask for.
Victor Gaxiola: Well, one other element that plays into this conversation is this vicious or virtuous cycle that exists. You we talk about the concentration issues. Well, as a result, you know, when people start investing and they look at the S&P performance over the last couple of years and they say, hey, let's just add more money to this S&P 500. You know, why try to do all these other exotic types of investments? This thing is actually doing well. Well, with every dollar or hundreds or thousands or millions of dollars that get placed, into the S&P 500 as it gets parceled into those stocks that are really leading the charge as far as its performance, there's this cycle that basically is you add more money to it, so you drive up the prices of those specific stocks as the prices go up, their performance increases, right? So everything's just kind of feeding itself on the upside. Well, there's a danger in that because the same thing happens on the downside. You know, as people start selling out of it, they start pulling from that and you start seeing the cycle go the reverse side. So that's why you can have a year like 2022 where the S&P 500 did not perform very well. And a lot of that was driven by the fact that the broad market was down and that was because people were selecting those stocks and they had such a concentration in that, that it really gets kind of spiraled down. So there's definitely a plus, but there's a very heavy negative too.
Carolyn Rowland: Good point.
Victor Gaxiola: The other thing too is we often say, and this was discussed in this interview, that the S &P 500 is not really truly passive because there's still a committee, the S&P index committee, that actively makes the decisions as to which companies they're gonna add or remove into the S&P 500 based on the criteria like profitability and liquidity. So there is an active element at least on the index and what is actually IN the index. And then they tell a really good story about how 20 to 25 years ago, they pulled a little company out of Texas called Enron out of the index and replaced it with a little chip maker.
Carolyn Rowland: Hehehehehe
Kim Gaxiola:
I remember that. Wow.
Victor Gaxiola: So you can see that there is still even within the S&P an active component to it. So to kind of put a close in the conversation regard active and passive investments, just kind of where we began, I think it's really an approach to take a look at the individual investor, what their particular goals are, which approach, and sometimes it's both, is the best one for it. Now there are specific areas where an active approach I think is better. And that is when you're looking at things that are trading in a less efficient market like small cap stocks, international markets, or as Kim had pointed out in the fixed income space for bonds. The other area where active management can make a huge difference is when we experience a bear market. So when you look at a bear market, it's in periods of high volatility or downturns. Active managers can use this downside protection to exit some risky positions, whereas index funds may have to hold those concentrated positions all the way down. So there really is, you know, specific markets, specific instances where an active approach is better. And this is really where you start seeing the value of professional advice and working with individuals that really understand what your investment goals are, and then translating that into the best investment strategy. So anything else to add, you know, as far as putting a close on the active versus passive debate?
Carolyn Rowland: Yeah.
Kim Gaxiola: Well, I would say there is a lot of window dressing that goes on behind the scenes on an in an active manager portfolio. And so what you were just saying, you you you could say when the market is in general going to go down because recession is nearing. That is true. But there's a there's a difference in what stocks will get hit hardest. And so, know, typically if we fear there's a recession happening, we fly to quality. It's called a flight quality. And the active managers will rush into those stocks that they believe will not pull back as much as the high growth oriented stocks do.
So, you know, this would be healthcare or consumer staples, those companies that you know, even in a recession, we are gonna be using their goods. Utilities is another one. You can't live without it in a recession and that's going to be where your money is gonna go primarily. So there is something to be said about that in that time period. And as long as we're rounding out this conversation, we would be remiss as advisors. Not to say, you know, we want to look at your portfolio of assets in terms of what your goals are, instead of being so, so intent on just following an index or following a performance of the overall market. Most important is that you get to the places you need to go. And sometimes, and you know, the only way to do that really is to be a little bit smarter in how we invest.
Victor Gaxiola: Yeah, and I would add too, which I think is important, especially if you hadn't been listening to the podcast in the past, was the fact that our investment approach, especially on the equity side, which means owning stock is really based on building a portfolio of individual stocks or exchange traded funds as opposed to mutual funds. The thing is, as Kim pointed out, I love that term window dressing, is that often with the mutual funds, you can have that over concentration of having more holdings than you really need to have a fully diversified portfolio. And what's lacking there often is that transparency of really knowing what you own. So our models, for the most part on the equity side, if it is a portfolio of individual stocks, typically holds no more than 25 to 30 individual stocks. And I would venture to guess that in looking at what those 25 and 30 holdings are, typically their household names, they're companies you're really well aware of. So that was our conversation on active versus passive. think we want to shift gears now and Carolyn bring it obviously into the conversation because you brought up a great article and at least some copy on the IPO pipeline for 2026. So the environment seems to be getting better for it.
Carolyn Rowland: Yeah, I think so. 2026 looks like it's going to be a really, really big year for IPOs. And I think we can all understand that, you know, there's no specific target on the IPO, right? Like things can change. The paperwork required to make it happen can maybe take a little bit longer. But so far for 2026, we're looking at OpenAI, which I think is a household name at this point through with ChatGPT, Anthropic which I view as a competitor of, know, chat, GPT, OpenAI. think, correct me if I'm wrong, Anthropic was started by runs Claude, is that accurate? Am I saying that backwards? Yeah. And then we'll get to SpaceX, there's a little, someone's whispering about that one as well. So some really big names and...
Victor Gaxiola: Yeah, I think it does,
Carolyn Rowland: I don't know. Personally, I think the SpaceX thing might get pushed into 2027. Like that I just started hearing for the first time. I also heard that SpaceX and XAI just merged. they're at this. It's just huge. So we'll really see what happens in shakes out there. But really interested to see what your thoughts are. If you guys have heard anything about this, I do have some questions teed up to kind of pick your brain on IPOs and things like that. But what were your immediate thoughts as far as open, let's just start with OpenAI going public. So think that's the name that we keep hearing in the news, right?
Victor Gaxiola: Well, before we go into the specifics on companies, I'll just say just in general, the environment itself has certainly turned and making, you know, IPOs much more attractive than they would have been in the last, you know, number of years. And a lot of that has to do with the quite honestly has to do with the administrative change and being very conducive to wanting to support mergers, acquisitions and capital being raised for initial public offerings and providing a regulatory environment that allows for small companies to really seek the opportunity to go into an IPO. I've had the experience of working for a couple of startups. It is an interesting space just from the standpoint that it's built around a great idea that then it gets funded. And as they start seeing revenue potential, they look for opportunities obviously to raise capital and they do that either through getting more funding from their venture capitalists and other investors on the private equity side or they actually look, is there an opportunity for us to take our company public, raise a lot of capital there that helps fund further research, development, and growth. It is an exciting space. It obviously comes with a whole lot of risk. So from an investor standpoint, you have to understand that if you are looking to invest in an IPO, oftentimes you're not allowed because you have to have either a whole lot of money or be an accredited investor or have somehow a relationship with the banking institution is actually funding the initial public offering. So there are some restrictions there, but there are also opportunities for you to get into an IPO after it goes public. And there are a couple of strategies. I know Kim's gonna share a couple of things on experiences when it comes to trying to find the next IPO and then investing in it. But I just wanted to start with basically the environment itself seems to be conducive towards an IPO.
Kim Gaxiola: Yeah.
Carolyn Rowland: Mm-hmm. Now that was great. And you answered, sorry, Kim. No, I was just gonna ask the question like why would a company choose to go public? And I think Victor just answered it perfectly. So go ahead, Kim.
Kim Gaxiola: Yeah. So, okay, I will step in. There's a lot of things going on. It's really interesting because the IPO world has changed a lot. A lot more startups are waiting to go public a lot longer than they used to. I think companies used to be a lot younger by the time they would go IPO as opposed to now. That probably is because of how the public equity markets are, you've headline news and every quarter you're trying to beat your last earnings. And so it's a tougher market because of reporting and regulation when you are in the public equity market. so a company that goes IPO, really just means that they have decided to sell their stock on the open market as opposed to being privately held. They still have stock, it's just privately held. And they do that typically to raise money. The drawback of doing it is going to be that now all of a sudden you have to report to people and you don't have as much control of your company as you would have when it was private. that's huge because we have seen actually more companies that are public go private because of all of the control factors. and so it's kind of an interesting dynamic, that, that we're living in, in that situation. Having said that, I mean, everybody loves an IPO. I don't know. It just sounds sexy and cool. Right. So, when those happen, I will tell you they're.
Victor Gaxiola: Mm-hmm.
Kim Gaxiola: It's a lot of confusion. It means that yes, that you can buy that stock, but the bulk of the money is made in the pre IPO to IPO that initial public offering. So if you want to go into the nitty gritty of it, when they're raising capital and when they're about to go public on the open market, they typically have a price range that that stock will come out at. perhaps Anthropic, I don't know what they're saying right now, but I'm just gonna say, for example, let's say they think that Anthropic stock price is gonna be somewhere between the $85 a share and 100. Again, I'm just throwing out numbers. Then the...bulk of the money that will be made are those people that already own it because they got in maybe at $5 a share, $13 a share, and that is a huge equity boost in their stock price. Now think about it. If all those people that own the bulk of the company as it was privately hold, now all of a sudden have the option to sell their stock at $85 a share and realize their gain. A lot of those original investors are going to get out at some point. And there's a lot of times there's a holding period you have until you can get out. Which brings us to the next point is that there may be a lot of hype as soon as the public market is Main Street is open to buy that stock. But keep in mind the heavy investors that have been in it from the beginning may have a six month window to sell it. And at six months, guess what? There's heavy selling pressure on that stock because they're all going to cash in their money. So it's there are some studies about, you know, how much money you can make when you buy it on the open market the day it goes public. And while a lot of people think that you can make a lot of money, the statistics say that more people lose money in that holding than they do.
Victor Gaxiola: Mm-hmm.
Carolyn Rowland: Hmm.
Kim Gaxiola: make profitability. Yes.
Carolyn Rowland: That's so interesting. Yeah, because it sounds so exciting, but that is one of the bigger risks, right? And then I think two, another big risk is the high initial valuation. So if they get the valuation a little wrong and then, you know, when it does go public, you know, is there that opportunity for it to kind of correct itself? And that's where we see the price dip too. So.
Kim Gaxiola: Yeah, and I think there's, you know, it's like, it's like that rush to get in as soon as the market opens and everybody's rushing to get in because you can't get it on the IPO. And that creates more demand and a feeding frenzy. And so the price can go up, up and up and up. But then as soon as that like excitement is over,
Carolyn Rowland: Yeah. Hahaha
Kim Gaxiola: And you start seeing that the insiders are employees of the company and all these people are cashing in on that within six months, it tends to go down. There are strategies out there. One of the investments that we look at that actually buy into it a few months after it goes IPO because they've done the studies and they realize the best price that they're going to get is most likely after all the hype is gone. And if it's a really good company, you know, they want to hold on to it. So it's kind of interesting.
Victor Gaxiola: I like to think of it, I was gonna say it's a little bit like the hot potato, you like it's like you wanna get in on it quickly, you wanna participate, but it's almost that whole idea that the best way to get the most out of an IPO is to actually either work for the company that's going out public or being one of the early investors on the venture capitalists or one of the early investors on the private side, because typically the individual shareholder, in this case, the public,
Carolyn Rowland: So that leads in, go ahead. No, you say that and then I'm gonna ask my last question.
Victor Gaxiola: That might be able to purchase into the shares of a company that's got an IPO is the last to actually reap the benefits of the IPO. And sometimes it could go the other way. Because when you think about it, and like I said, having worked at a startup in the past for two startups, there was always that promise. There was always that promise and hope that you were developing a product or a service that was initially going to attract enough attention that you could go public. And that's when you were gonna get paid. That's when you were gonna see your...your shares, your private shares get vested, vested being monetized and have an opportunity to participate. So the first people in line to collect on the promise of a young company or a startup are the venture capitalists because they're the early investors that put in their dollars to invest in the company to develop the idea or the innovation. Second in line tend to be either the banking institutions that are funding it or the individual employees or the founders, the people who created this with sweat, blood and tears to develop this working in basements, hoping for us at some point to get that payday. So once it goes public, it's exciting. There is an estimate as to what they think it's gonna be valued at and it's based on, you sit there and you kind of speculate, what do you think this is gonna be worth? How much enthusiasm is behind whatever's being produced or the service that's being provided? But then the market figures it out. This is what I love about the free markets is the markets will figure out what the appropriate price is and then once it settles, it becomes like any other company that has to report every quarter, have shareholder meetings, have a board, know, basically open up the books to everybody to see where before it was private, didn't have to do as much of that, now it does. So there's a lot more additional scrutiny that comes with it.
Kim Gaxiola: There is, it's why sometimes private equity and there are funds that are offered out there that are private equity. You wanna really like be careful when you listen and you hear, it's a private equity fund I want in. There are multiple types. There's the kind of private equity that are just stable companies that have been around 30, 50 years and are good businesses. That's one type, but most of the hype goes to the private equity where it's, you know, the ones that want to get in on anthropic and all of these different private companies that are waiting to go public. so it, you know, while everybody is, can be an optimist or they just have greed in their, you know, in their emotion, right. I've looked at so many of those startup type private equity funds and to me like they just in all of my research they they just haven't proved that great and their returns are market-like because they have…there are so many dogs for every unicorn and great IPO that's out there there are so many more dogs. And when you are investing in the IPO market, you have to take the good and the bad, or you won't get access to the good.
Victor Gaxiola: Well, let's unpack that because Carolyn brought and she did some research on a stable of unicorns. So let's go back to where she started in talking about OpenAI and Anthropic. So what did you uncover?
Carolyn Rowland: Yeah, yeah, so I guess I'm just curious and I wanna hear, at what point would you guys consider investing in, I don't wanna say an IPO, right? Cause I think we can all agree at this point, it's like we're not getting in right at the minute, right? The stock comes to the public market, right? Kim, you kind of hinted at it with that volatility in the months after and so.
You know, we do see a lot of volatility in that six to 12 months after the initial public offering, but when will we consider adding a younger stock to our portfolios? I think that's a common question we might get from clients, right? So ones that are using our model portfolio. So I'm just kind of curious what your thoughts are there.
Kim Gaxiola: That is a good question. You know, one that we would probably debate and deliberate over the investment committee. If only you had the recordings.
Carolyn Rowland: Agenda item.
Victor Gaxiola: I think to answer the question, it depends so much on the company itself and what the promise is and what sector it fills in, what kind of problems is it solving? Is it the only one in its space? Or is it one of many competitors? What has been the track record of others in the same sector? I would say we're probably not going to be the earliest in getting in on it. We will probably just wait and see. You want a couple of cycles of earnings. You probably want a few cycles of it going, you know being out in the public market before making a decision as to whether or not it's worth pursuing… And so oftentimes I'd say that when we look at an investment, whether we're sourcing out a new exchange traded fund, or let's say a mutual fund, we often want a track record on it, you know, and we take a look at who's managing it. So in this particular case on an IPO, think a lot of it would have to say, is our, what kind of confidence do we have in the management group and the people and the visionaries behind it? Do they have a track record? Because you'll see a couple of individual entrepreneurs that'll start something one place and then start something somewhere else. And I don't even need to say who it is, but you see that they have a track record, right, of having success, which is one of the three here. We got SpaceX on the docket. Guess what? Elon Musk has a good track record when you look at what he's done with…other of his companies. So those things kind of play into the decision, I think.
Kim Gaxiola: Yeah, and also the decision of the portfolio that we are managing. When we invest in stocks, there are two portfolios that we have. We have one that is more of a growth oriented that will pick more aggressive stocks. But our other portfolio is about rising dividend companies. I'm not going to put an IPO that has no dividend in a rising dividend portfolio because our mandate is, we want companies that increase their dividend and typically these IPO companies are not paying dividends to begin with unless it's some special type of, you know, real estate investment trust or something like that. But I think the ones that people are really interested are not the ones that are paying dividends upfront. And so it would have no way of getting into that portfolio. So again, it goes back to, you know, us being disciplined and saying, does this meet the criteria that we have for our growth portfolio.
Carolyn Rowland: Here, good points. Okay, so we talked about OpenAI, we talked about Anthropic, hinted at SpaceX, we'll see what happens there. I have a couple of other names that we might see hit the IPO market this year. So Canva, I was pleasantly surprised by that. I feel like that's another household name, like, okay. Stripe, so payment processing system. Kraken, I know I've heard the name, just in this moment. I don't know that not coming to me blockchain.com and Bold and others have publicly announced 2026 IPO intentions. So it's really interesting. Obviously very tech heavy, small business. Yeah. So we'll see how 2026 shakes out.
Victor Gaxiola: Yeah, and I go back to my initial comments, which is basically a lot of what really drives it is the environment that supports and is conducive to this type of activity, which I think is good. I think we are entering into a time where we're going to see, you know, more IPOs come to market. We're going to see more mergers and acquisitions. And as long as there's less regulation in that, that activity breeds opportunity, you know, for investors and also for the people that actually work at these companies AND creates a competitive environment that drives innovation. So I think in general, we all benefit from the standpoint that it's not just one company that's looking to go public on the AI spacers, multiple companies are looking at it. So that competition leads to just improvements and enhancements that we all get to benefit from. So I see it as a positive.
Kim Gaxiola: Absolutely. It really is funny. I don't remember what the statistic is, but like there are far more privately held companies than there are publicly. And all we do is focus all of our time on this public market, but that is not the full picture of the business environment in the United States.
Victor Gaxiola: We'll have to table that conversation on private equity for a future podcast because there's a lot to unpack there. So I'm glad you brought it up. So let's close on that and we'll have to explore the private equity markets, specifically talking about a couple of strategies for investors to actually be able to invest in areas that for the most part used to be only for accredited investors or people with very, very deep pockets. There are now strategies and opportunities for you to participate in private equity. So we'll have to save that for a future podcast.
Carolyn Rowland: Yeah, I was just gonna say stop right there.
Kim Gaxiola: Sounds good.
Victor Gaxiola: All right, so thank you, Carolyn and Kim, for joining me again on the Resilient Investors podcast. Once again, please follow us on our different social media platforms. And also, if you have a question, please send it our way. You can do one of two email addresses, hello at resilientplanning.com or victor at resilientplanning.com. And we just want to thank you for joining us today. And thank you, Carolyn and Kim, for a really engaging conversation.
Carolyn Rowland: All right. Thank you. Take care.
Kim Gaxiola: That was fun.
Victor Gaxiola: All right, bye.
Kim Gaxiola: Bye.
#END OF PODCAST
Show Notes
- The Street- “The Case for Active Management When So Few Outperform the S&P 500”
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- Have a question? Send an email to victor@resilientplanning.com