The Trade Desk Joins the S&P 500

Bitcoin's rising appeal as a corporate treasury strategy

A surging interest in trading stock options, considering recent developments

On the other hand, Stocks worth watching

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A full transcript is below

What the re reveals is is Motley Fool Money

Welcome to Motley Fool Money

I'm your host today, Jon Quast, and joining me today is long-term Motley Fool contributor Matt Frankel, as well as Motley Fool co-founder Tom Gardner

Moreover, Both of you guys, thank you so much for being here today

However, We've got a lot of things to look at today, whether it is Bitcoin, trends, but let's start with our first story here

That leaves a spot open in the index, and it's getting filled by advertising nology company, the Trade Desk

What does this mean for The Trade Desk holders

Matt Frankel: If anything, it's time to take a victory lap

On the other hand, That's a lot of upward pressure on the stock

Nevertheless, Now having said that, being in the S&P doesn't affect the itself, but it is very impressive how far the Trade Desk has come

Moreover, It really is just an example of the hidden gems cess at work

However, It does get the stock on the radar of some institutional investors, but it's not a big victory -wise

Moreover, Jon Quast: When you look at what happened to the trade desk, really just a blow to the confidence there when it missed its own guidance

But that was just one quarter

It's not the long-term trend

What did you initially the Trade Desk and do things still look bright to you for its future

Tom Gardner: First thing I'll say is just to affirm what Matt said, which I think the move into the S&P 500 is exciting in the moment, but relatively short-d because it ultimately comes down to how well the es perform

That's always a validating thing

Additionally, I would say anyone who's in stocks, if you can find an interview with the CEO out on YouTube, wherever you can find it, obviously, earnings call transcripts can give you some of their personality as well

I would say, in terms of looking at companies, what would we look for to find that pattern that we found in the trade desk early on, in today's financial world

Because as you said, it's now a 25 bagger in less than a decade since coming public

That's just an outstanding return (noteworthy indeed)

In the case of the trade desk, I would say you have a company with its focus on grammatic advertising, in this volatile climate

Moreover, However, First, in grammatic advertising, that is a higher margin portion of digital advertising

Historically, the digital advertising was you'd call on the phone

We wrote a written contract

We said, hey, we don't know what's going to happen here (something worth watching)

Let's see you (quite telling), in light of current trends

However, But it's become so much more sophisticated over the last couple of decades

Furthermore, Now, what you have is essentially AI-powered grammatic advertising (noteworthy indeed)

Nevertheless, You put your dollar amount in, and it spreads across the Internet to find the best locations for that ad, in light of current trends

Additionally, That's so much more sophisticated than traditional media

The evidence shows money was coming from traditional media into digital, but then from digital toward grammatic, and then grammatic toward connected TV

But let's just talk two or three things you see in a company's financial performance that can help you find them, given the current landscape

Additionally, Number 1, they're taking market

In the higher margin area in a, their gross margins are rising, and their returns on invested capital are rising

Those were all happening with the trade desk

Nevertheless, You asked Jon, what do we think of it now (an important development)

I would say Trade Desk is looking more fully valued now, more fully appreciated in the marketplace

I still think it can beat the market from here, but you're not going to get anything what we've gotten over the last decade (quite telling)

But again, positioned well in a growing trend, in today's market environment

Additionally, Furthermore, It's just that there's more competitive threats now in its marketplace than when it really emerged as the true leader in grammatic and connected TV advertising

However, Jon Quast: I couldn't agree more

Going back to CEO Jeff Green, definitely not afraid of the competition that's ahead, definitely facing those big giants head-on

Not short of ambition, I think it definitely has an opportunity to continue to grow in its market

Furthermore, Well, coming up next we are talking Bitcoin

On the other hand, This's Motley Fool money

Let's move on to our next topic here

As of this taping, the world's largest cryptocurrency is Bitcoin, and it's sitting near an all-time high price

Nevertheless, This's coming from companies from corporations

Even news coming out this week that BlackRock, because of its Bitcoin ETFs, actually holds even more than that

It's the largest holder

Nevertheless, Tom, if all of these companies and all of these other investors are buying Bitcoin, is this something that every investor should incorporate into their strategy

Additionally, Tom Gardner: I first have to call it similar scientific because I find it's such an enjoyable

This's a very small company in the public

Market analysis shows ir core is blood flow measurement nology

They're a healthcare nology company that has decided to just aggressively buy Bitcoin

Right now, it's certainly looking a good move

We're moving beyond that, let's say, the first 15 years of Bitcoin, we're largely early adopters, ies and very nically minded people, as well as individuals that just said, I'll take a little bit of a risk on

On the other hand, Now we're moving to the stage after the first 15 years where we're starting to see corporations and financial institutions buying (which is quite significant)

The movement of this now 2

Furthermore, 4 trillion dollar asset is largely going to depend on how much institutions back and buy and validate Bitcoin

This's no longer a speculative, hey, a bunch of people on the Internet are playing around in their, building their own mining systems in their basement

Moreover, Furthermore, This a very for real thing with ETFs with substantial asset basis for ETFs out of the gate, these Bitcoin ETFs

This analysis suggests that has been legitimized, but Bitcoin is valued at 2, considering recent developments. 4 trillion, I mentioned earlier, and gold is 17. 5 trillion

Additionally, Seven times larger allocation for gold, given current economic conditions

One quick note on this

Tom Gardner: It's hard to fathom, but it is actually true (this bears monitoring), given current economic conditions

Jon Quast: You just blew my mind on the podcast

Additionally, Tom Gardner: [laughs] I do think the relationship between Bitcoin and gold is a good one to watch, and I think that gap will narrow, in this volatile climate

Moreover, For me, until you start seeing governments taking more fiscal responsibility and really trying to balance budgets by getting the tax policies right and getting the spending policies right and getting them align, getting both sides on the same team, so we're not yelling less filling taste grade at each other

Until that happens, you're going to see the debasing of currency, which does favor these alternative assets Bitcoin as a store of value

I will go on the record saying, I think Bitcoin is going to outperform the market substantially over the next 5-10 years

But it will be volatile

If anyone's not bought any bitcoin and wonders when do I jump into the skipping rope here

Furthermore, What's the time to get going (something worth watching)

This leads to the conclusion that 's going to happen

This analysis suggests that 's happened a lot before

Jon Quast: Matt, what you

Do you think that there's anything here to Bitcoin (which is quite significant)

I wish I had kept the three Bitcoin or so that I had mind till now

Moreover, Tom Gardner: This breaks my heart (something worth watching), amid market uncertainty

Nevertheless, Matt Frankel: I know, I wanted to really understand how the nology worked

Meanwhile, This really the only reason I did it

It wasn't anything to do with, in light of current trends

But right now, there is a lot to Bitcoin, especially in the current regulatory environment, in today's market environment

Just to name one example, SoFi is a stock that I very closely

Their management just announced that they are bringing back crypto trading to the platform because we finally got regulatory clarity that banks can be crypto custodians (which is quite significant)

That's why they dropped it in the first place

On the other hand, They could be the first of many to bring cryptocurrency trading to their platform

Moreover, Imagine if some of the big banks end up doing it now that we actually have regulatory clarity

That's just one example, amid market uncertainty

Moreover, I don't necessarily think everybody needs to own Bitcoin, but there's a whole lot to it right now, and I think the trends are going to encourage higher trading volumes, which should put long-term upward momentum in Bitcoin

Additionally, Jon Quast: As we talk Bitcoin and there's just fundamental differences between cryptocurrencies and stocks, I think it's really important to note that

On a similar note here, I think it's important to distinguish between in stocks and trading in stock options

Moreover, Gentlemen, there's an undeniable surge in ity when it comes to stock options (remarkable data)

Matt, why do you think that investors are so interested in trading stock options right now

Matt Frankel: The short answer is that they're doing it for the wrong reasons in a lot of cases

Furthermore, Options are exciting, and there's lots of money to be made if speculative options bets go correctly which I would be willing to bet is most of what's happening on Robinhood

We've seen SPAC start to make a comeback, for example

Conversely, We've seen the meme stock trade and the Wall Street Bets Group

On the other hand, The same can be said in recent days on the Ebuyers Opendoor and Offerpad

Open doors tripled over the past month

Traders see options, and they see this as a way to amplify moves this even further

If you remember the GameStop rally, that was primarily options-driven

Conversely, It's not a big surprise, given that all of those other kinds of speculation have come back to see options volume really soar

Jon Quast: It's worth noting, too, that within the options trading trend, this actually really surprised me

Moreover, These are options that you buy today, and they expire today

It's essentially a short-term prediction of the stock price (noteworthy indeed)

Tom, is thinking short-term a good idea (which is quite significant), considering recent developments

Tom Gardner: [laughs] Oh, I see the largest softball coming over the plate at a Chicago softball field right now, and I'm just waving my bat waiting for it

Let's remember our college days in spring week

The market rolls from party to hangover to party and back again and again (an important development)

We're moving back deep into the party now

We're going to feel bad at some point, because you don't stack up some of these factors together and not pay the penalty at some point, the market's trading at 25 times earnings, amid market uncertainty

Furthermore, I started hearing a song Trouble by Ray Lamontne when this happens, in this volatile climate

If you haven't heard that song before, play it, it sends a little bit of a message what happens when zero-day options start becoming very active (which is quite significant) (an important development)

Nevertheless, Executive insider selling is picking up and now above average

Furthermore, You have above-average levels of margin debt, and we have the leveraged ETFs out there

I don't know why the SEC stopped at 3X leveraged ETFs (an important development)

Let's make them 9X leveraged ETFs

Let's just allow people, so there's more and more speculation as people are having more and more fun, they're going back to get another drink at 1:00 AM

I'm not saying this is not a good reason to invest, considering recent developments

Nevertheless, I am saying that there's a very good reason to look at the type of investments you're making right now

The evidence shows would not be the time to climb out on the edge of the branch, this would be the time to stabilize with some more cautious and moderate classified investments

Nevertheless, Conversely, We classify every stock in the Motley Fool as cautious, moderate, aggressive, and I'd be in the cautious or moderate zone

On the other hand, But let's remember, we've been rewarded for staying invested

Moreover, I never heard him correct that one

It's dangerous to turn bearish and start pulling your money out of the equity, in light of current trends

It's much better, I think, to gradually change the style of investments in your portfolio (an important development), in today's market environment

In contrast, If you're very growth and oriented now, recognize there's so much enthusiasm and there's leverage behind it, and that can end up causing more volatility than normal in those types of investments (noteworthy indeed)

Moreover, Conversely, Jon Quast: I can personally attest that all of my worst decisions were when I was thinking short-term instead of long-term

Definitely appreciate that perspective

Coming up later in the show, we're talking hidden gems that we think will beat the market from here.