Interviewer: And today we are joined by Jack Newhouse, who's partner and wealth advisor at the Rothschild Wealth Partners. Good morning. Great to have you here. Thank you so much for joining us. It's great to see you today. Well, first and foremost, we're here at City Winery here in New York City, and Stocktoberfest is in its last day today. So first of all, give us your sense of what you're hearing from retail investors.
Jack Newhouse: I would say first and foremost, the Social Leverage team does an incredible job putting this together and the Stocktwits team that does this, bringing together a bunch of really different investors and traders who have a lot of different unique backgrounds, and I think right now people are looking for edge where they can find different opportunities to make money and the way this group and this community thinks about things is a little bit more unique, a little bit more cutting edge, which is really interesting to see.
Interviewer: Yes, absolutely. And given the fact that we are paying attention to what's happening in the broader market, we are looking at the major US stock averages at all-time record highs, although we are expecting the market to open lower following those highs we saw for the S&P 500 as well as the Nasdaq, and we're also looking at plenty of volatility across all asset classes. So how are you looking at the macro picture over at Rothschild?
Jack Newhouse: So first of all, I would say that the volatility doesn't seem that high. We're at all-time highs. The VIX is relatively low. We're seeing a pretty small range. You mentioned the market opening lower today. The S&P is down 40 handles, which at 7800 or whatever it's at is really a rounding error. Uh, I think the trend's been up and for years we've seen buy the dip works. And so right now I would say it doesn't seem as volatile. Some of the commodities are moving around, obviously oil is and rates are, but in the stocks specifically it feels a little quieter. Uh, for Rothschild, one of the things we're really looking at right now is mortgage rates being basically at all-time highs and or relative all-time highs and that getting very scary. And I think right now the headline is 7.49% or, you know, 7.5% mortgage rates and how that's a serious problem for people. I don't see houses trading outside of areas that are extremely hot. You're in San Francisco. People anticipating the OpenAI and Anthropic IPOs, that type of liquidity will make the market work. But in normal America, people just can't, if they're stuck in a mortgage, they can't leave and they can't go retrade and have a rate that goes up by 3 or 4%.
Interviewer: Mhm. Yeah, and of course you bring up an important point because if we're just looking at the VIX and where it is right now, you're not seeing much movement and when we take a look at what we saw earlier this year compared to where we are now, we have moved a lot when it comes to asset classes whether we're talking about the equity markets, the bond markets, or commodities or even digital assets and of course. We're talking about people looking for opportunity amidst all this volatility when we zoom out. So what are you seeing when it comes to social media and how retail investors are actually moving right now?
Jack Newhouse: There is obviously over the past 5-6 years since COVID, the retail market being able to use social media has drastically changed how people invest. It's blown out hedge funds. The retail market is very strong. What is getting interesting now is how to figure out what is legitimate conversation versus bots and getting into how can you find out and prove that someone's a real person versus one person controlling 20,000 accounts and trying to create a story. And I think over the next year or two getting to be able to prove who is real and who is legitimate will be more of an important thing.
Interviewer: Mhm. And I know throughout the Stocktoberfest event you have been talking to many stakeholders who are in the retail investment space as well as capital allocators and people such as yourself. So as you look forward, as you mentioned, the role of social media, of course, we're all focused on artificial intelligence. So whether we're talking about agentic AI or investing in AI as a theme or even the technology and how industry utilizes this, what is your take on AI over at Rothschild?
Jack Newhouse: So we, I can't say what we're doing right now because it's going to be announced in the next two weeks, but we're partnering with someone to build out an AI arm of Rothschild that will automate a lot of the back office stuff and make it where advisors can spend the vast majority of their time working with clients. And we can empower the back office to do things that are not client facing in a very efficient way and better serve our clients. So that's something that should be coming out in, I think, the next week or two, and I'm probably gonna get in trouble for talking about it, but we're really excited to, uh, lean into that and do a better job ultimately servicing clients.
Interviewer: And of course, Jack, all of us are wondering how all of this shakes out when it comes to artificial intelligence and the long term. But you highlighted social media and how we can't sometimes uh decipher whether we're looking at bots or an actual human being. But when it comes to the retail investor out there who's looking for an edge and even high net worth individuals who are looking at social media, what would you say to them? And when we're talking about a highly, highly regulated space like financial services, what do you think is important to keep in mind?
Jack Newhouse: The, well, first off, I think for someone who's more of a retail trader, they have the advantage of being a little bit smaller and can move quickly and not worry about slippage and being able to get in and out. So they can do things. I would say like you could take 3 tiers, they can do this much stuff and then I can do this much stuff and a bank can do this much stuff due to size and scale. And so for them they can move really fast and take advantage of small market moves that say someone who wanted to buy $100 million of a stock couldn't do, but if someone wants to go out and buy 50 or $100,000 and make 5% over a little while, that's definitely reasonable. So they have an advantage there. And now that you're getting a lot more information flow and real-time information through social media or through, uh, things like Stocktwits, you can actually, uh, act and react to that.
Interviewer: And while I have you here, you mentioned we're here at Stocktwits event. So what is your take on digital assets, in particular crypto, as well as what's happening in alts?
Jack Newhouse: OK, very fair question. I would say those two are completely different, um, so I'll take one at each time. On the crypto side, I started investing in crypto and uh I dipped my toe in the water in like 2014, 2015, not in size, started making real investments in January of 2018. It's gone really well. I feel like we're getting to the point where crypto is getting more fully valued. And it's something where the returns we saw from 7-8 years ago, I don't think will happen again. Uh, is there opportunities there? Definitely will companies do things that change how the world works. I think there still is a chance for that, but to go and buy something and make, uh, you know, 3 or 4 or 5,000x return in 5 years just doesn't feel realistic anymore. Uh, as for alts, I think there's tremendous edge in alts. I, uh, invest heavily in that and we bring a lot of those opportunities to our clients. We find that there's a lot of edge there where the public markets might be a little more efficient. We think there's inefficiencies in the alternative investing landscape.
Interviewer: And finally, before I let you go, hard to believe, but we're in the final quarter of 2026 and we are already looking ahead to 2027, especially when it comes to the rate environment. So given the landscape and your market outlook, where are you finding the most compelling asymmetric risk reward set up right now?
Jack Newhouse: The right now to me you have two choices. Choice one is to go into the things that are going to move the most think Nvidia, Anthropic, OpenAI, and have edge that if market, if the market continues to perform, you're going to crush it there. On the other side, it's what if we're flat or what if we're down and how can you protect yourself and still earn a good return. And so thinking about something like uh preferred equity and multi-family or going in, there's a portfolio company here this week that's presenting. That uh backs it's it's an alt and they back uh employees who need loans on their private stock and they have a real nice margin of safety to do it so being able to find those things that get you that. You know, 14 to 22% return in a flat to down market to me feels really compelling and also barbell that with things that if the market does well, you could see a double or triple over the next three years.
Interviewer: Well, Jack, I appreciate your time. Thank you so much for taking time out of your busy schedule to join us here at Stocktoberfest.
Jack Newhouse: Really glad you guys are here and I wish you luck the rest of the day.
Interviewer: Thank you so much, Jack.
Jack Newhouse: Thank you.
