In this podcast, Motley Fool contributors Jon Quast, Matt Frankel, and Rachel Warren discuss:

• Risks from S-1 filings for Amazon, Alphabet, and Meta Platforms.
• Anthropic's unusual risk factor section.
• What's driving the Fear and Greed Index lower.
• Three stocks that have dropped that are worth buying.
• When higher bond yields can help investors.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Oct. 5, 2026.

Jon Quast: Facing our fears with the stock market, Motley Fool Hidden Gems investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm your host today, Jon Quast. I am joined by Rachel Warren and Matt Frankel. We're kicking off this spooky October with an episode filled with investor fears. We're going to be talking about bond yields and stocks that are plummeting. But first, we want to talk about risk factors. Every publicly traded company does include risk factors in their filings, and that includes the S1 filing. This is a filing that companies release right before they go public on the stock market, and we got one from Anthropic that was a little bit over the top as far as the risk goes normally. We don't have the full document, but the leaked version that is out there says that its technology poses a catastrophic or existential risk to humanity, potentially. That's quite a doomsday scenario. That actually gave us a question from our mailbag that was worth considering here at the top. This comes from a listener named Patrick. Given the recent S1 filing from Anthropic and how it paints a rather bleak picture of the risks for AI, I was wondering if we could have a little fun and dig into a few S1s from 10, 15 or 20 years ago. Maybe you look at the S1s from Google, Amazon, or even MongoDB to see if they've been able to execute or come up against the risks that they've outlined and how they've navigated it. We're going to bit on this. We're going to take a stroll down memory lane with some old S1s. We're going to not talk about MongoDB today, but let's talk about S1 risks from Amazon, Alphabet, and Meta. If you invested in any of these at IPO, you're doing quite well today. Matt, kick us off here with Amazon and its S1 risks.

Matt Frankel: Amazon's a great example of one that did list some scary risk factors. The question said 10, 15 or 20 years. Really aging myself because I remember Amazon's S1, and it was 30 years ago, almost 30 years ago. It happened in '96 or '97, I think '97. But it warned of better funded rivals specifically named Barnes and Noble and Borders. It also listed capacity constraints, system failure as risk factors, but solving those problems created what would eventually become AWS. They're perhaps the best example of how a company navigated some "scary risk factors" and really used it to their advantage.

Jon Quast: It's almost hilarious to consider Barnes and Noble as an existential threat to Amazon now in hindsight. But indeed, at the time, it was a little bit like, how is Amazon going to come up against this huge and powerful company Barnes and Nobles? It was able to do it. It's similar Rachel with Google and Microsoft. Microsoft having that distribution and Google saying, hey, maybe they're going to be able to prevent us from growing in Search.

Rachel Warren: It is funny to think about now when we look at how much these companies have grown to the giants they are today. But the sort of often boring section of the S1, not so much an Anthropics case, the risk factor section, I can obviously as an investor, tell you a lot about the business, help you really form your own risk thesis and by assessment of a particular company. Now, there's a key point to be made here. There's obviously a fundamental difference between Alphabet warning 20 plus years ago that Microsoft might crash a search engine and Anthropics warning in it's filing that an autonomous AI model could pose an actual "existential risk to humanity." But the key takeaway here is back in the day, Alphabet or Google's core risk was structural. They were a single revenue engine at the time, at the mercy of desktop operating systems controlled by their rivals. A lot of the concern at that point was this idea that Yahoo, Microsoft could destroy Google, of course, that in fact, was anything but the case. I do think what we see in the at least leaked version of Anthropics S1 filing, it is a different story, but you can certainly look back in time at a lot of fear mongering around past S1s that never in fact came to fruition.

Jon Quast: I can remember a time when I didn't see how Google was going to displace Ask Jeeves, and I've certainly been proven wrong there. Matt closes out here with Meta. Of course, it wasn't called Meta when it went public, it was called Facebook back then.

Matt Frankel: Jon, I think you and I are the ones old enough to have actually used Ask Jeeves. I used Web Crawler and Licos as well, if you remember either of those. But yeah, Meta is another example. It was known as just Facebook at the time of its S1. The biggest concern from investors and from the company itself was being able to monetize Mobile. At the time, smartphones were still relatively new. Facebook's S1, don't quote me specifically on this. I think it was 2011. But at the time, the iPhone had only been out for a few years. Smartphones weren't what they were today. At the time, Facebook generated virtually all of its revenue from desktop ads. It's S1 specifically disclosed that it had no meaningful revenue from Mobile, and there was no clear strategy or pathway to changing that at the time. On a small screen, for example, there's really no room for a desktop style ad like they were using for the most part at the time. But by 2019, not even today. By 2019, Mobile made up 94% of Meta's ad revenue, and it fixed the problem in a few ways. I mean, number one, the most obvious one, Meta put ads in the newsfeed and directly in the news feed, not just sidebar ads, so they looked like posts. I remember being really annoyed at that at first, but it was a genius business strategy. They got far more attention in late 2012, shortly after it went public, Meta launched ads that let developers pay people to download their apps. Really great way to track what advertisers were getting for their money. Demand for that, handily exceeded expectations. The results came pretty quickly. This is from Tech Crunch. I found an article in 2014 that put Mobile at more than 50% of ad revenue by the end of 2013, and that was only about a year and a half after the IPO, so with Amazon and Meta, the key theme here is turning your worst business threats into your growth opportunities, and that's a rare quality that you can look for. I don't know, with Anthropic, I don't know how you turn an existential threat to humanity into a growth opportunity. I don't know. Maybe they could figure out ways to help regulate the industry, keep it safe and grow that way.

Jon Quast: What this reminds me of, I believe it's author Morgan Housel, who says, Everything worth doing in life has less than a 100% chance of success. There are risks in any business, but as we're pointing out these great investment opportunities, you have to be able to see through these clouds, as Motley Fool co-founder David Gardner puts it, "Clouds you can see through." There are clouds, but you got to see the sunshine on the other side. But of course, it's not all sunshine and roses, Rachel. There are real things to consider. We shouldn't be dismissive of the S1 risk factor sections.

Rachel Warren: No, quite the opposite, in fact. I mean, if anything, an S1, I mean, it's a great tool as an individual investor. It highlights vulnerabilities, often at a company's weakest point, often before they've built a protective moat. Of course, in Google's case, they navigated commercial threats by aggressively at the time, developing Chrome and Android to control its own destiny. Come quite a long way since then. That moat specifically within the AI space for the frontier labs, for Anthropic specifically, is still actively developing as is the regulatory landscape. That creates, I would say, an element of uncertainty that is a little bit differentiated here.

Matt Frankel: Of course, there are some that don't overcome their risk. It's really important to mention that. We're not saying that every risk is an opportunity. Think of WeWork, for example, if you remember that company, it's S1, which was originally filed in 2019, showed $47 billion in lease liabilities, which were backed by nothing but short term memberships. They called it out as a risk factor, and it turned out to be a little too much of a risk factor.

Jon Quast: I want to close out here talking about anthropic. We certainly don't want to be dismissive of its risk section either. Rachel, you had some interesting observations about the risk factor that we know of. Obviously, we don't have the full complete filing yet that is publicly available, but what we know so far.

Rachel Warren: There was a lot to go over there, but the thing that was very noticeable was Anthropic spent about 80 pages strictly on risk factors compared to just around 48 pages explaining its actual business operations, essentially dedicating nearly twice as much S1 real estate to explaining how the world might end as to how they're planning to justify a targeted $2 trillion valuation. Anthropics also introducing a somewhat unusual founder LLC model, essentially, where the seven co-founders will be pooling class F shares to lock down 50.1% of the total voting power, so it's effectively asking the markets for a historical amount of capital while insulating leaders from a lot of the market forces there. Still a lot to come out. Obviously, we have to see what the actual S1 looks like, but I think that there are a lot of very justifiable questions that investors have and will continue to as we move forward.

Jon Quast: Well, we'll certainly keep an eye on it when it finally does release to the public. After the break, we're going to be talking about fear and greed. You're listening to Motley Fool Hidden Gems Investing.

Welcome back to Motley Fool Hidden Gems Investing. There's a thing out there called the Fear in Greed Index from CNN and what is so interesting is that as we've kicked off October, this is the third trading day and it's the third straight day that it is marking fear in the stock market. Now, this index tracks a variety of factors, which is interesting in how it ascertains that investors are fearful. One of the things that it's looking at, for example, is the options. Are they bullish, bearish, et cetera, are they more bearish now than bullish? That's an interesting data point. But the two weakest factors right now in the index are the stock price strength and stock price breadth. Basically, there are more stocks making new lows than stocks making new highs. Which is counterintuitive with the market at an all time high or near an all time high. But that's actually what's happening. We're also seeing a concentration in volume among stocks that are going down more than stocks that are going up. What that tells us is there's actually a decent amount of pessimism in the market with a lot of the optimism concentrated in just a few names. I thought this would be a good chance to talk about some stocks that are actually making some new lows here. Warren Buffett talks about buying when others are fearful. Others are fearful, stocks are hitting some lows. What are some stocks guys that you would be buying and Matt we're going to let you go first here.

Matt Frankel: First of all, fear alone isn't a reason to buy. It's also important to really put into perspective whether a stock price fell just because of market sentiment or because there's something wrong with the business. I'll call out one that I'm not necessarily suggesting run out and buy. That's a homebuilder I own called Dream Finders Homes. I bought more in full disclosure, but it's not just down because of fear in the market. It's down because its earnings per share have been more than halved over the past year. It's because margins are under pressure and it's because the housing market is generally terrible right now. I could probably think of a worse word to describe the housing market. I bought more but that's a stock that's cheap for a very rational reason. Another one, on the other hand, think of a company like Brookfield Corporation. Ticker symbol BN. The giant asset manager, it's down 20% over the past year, just reached a new 52 week low. It's distributable earnings, which are not GAAP earnings. This is like their form of adjusted earnings was up 15% year over year in the latest quarter. Its fee bearing capital grew by 19% year over year, which is a great indicator of future revenue, and it's raising money at a faster pace than ever. This is a case where the business continues to grow, but the stocks price is down because of fear in the market. There are some real risks with Brookfield, don't get me wrong, but the company at 15 times earnings, that creates pretty impressive risk reward dynamics.

Jon Quast: Certainly a name that not everyone in our listening audience maybe have heard of they love ideas. We like to give ideas. Rachel, we'll pass it to you here. What's another idea that you have?

Rachel Warren: I think Shopify is a great example of a business that has been sold off a bit, particularly early this year. The stocks down still about 8% from a year ago. Certainly, the business went through quite a lot of volatility share price wise earlier in the year. The stock bottomed out under $100 a share. Now it's trading around a $150 a share. I'm a long term holder of Shopify, and I think a lot of this has been around the concerns of how commerce and agentic commerce is going to disrupt the ecommerce space broadly, and of course, Shopify, with its platform that helps merchants around the world is the epitome of, I think that fear that we're seeing. But again the point that Matt makes, looking for businesses where the growth story is still there, this is not about buying a business because the share price has dipped or the valuation looks low compared to a year ago. Obviously, that can be a favorable thing as a long term investor. You want to make sure, are the cash flows there? Is the profitability there? Is the growth story still holding, I think that's very much the case in the case of Shopify. I mean, they're really doing an exceptional job of continuing to monetize agentic commerce, building that into their platform. They're seeing tremendous growth with shop pay, and again, a lot of those AI innovations are actually driving their profitability and cash flow. I think that's a great example of a business that the market's been a little hard on, but in my view, the business thesis still holds.

Jon Quast: Maybe a nice, hidden aspect of Shopify that people haven't considered, just how AI really does help these smaller shops as opposed to large marketplace aggregators. Matt, close us out here with another little bit off the beaten path stock to talk about, but this is an interesting one.

Matt Frankel: I love the Shopify call, by the way. That's one that I bought when I was being greedy when everyone was fearful of the 2022 bear market, and it's paid off very, very well. But another one I was going to talk about is a real estate investment trust called Realty Income. Ticker symbol is just O. It's the largest real estate stock I have. It reached a 52 week low recently, primarily because it's so sensitive to interest rates. Real estate stocks in particular are very sensitive. They rely on borrowed money more than most companies, so borrowing costs are higher. The value of commercial properties is really derived by comparing the expected return to the risk free rate, which I don't want to turn this into economics 101, but the bottom line is that real estate stocks are very, very interest rate sensitive. Their business is doing great. They own about a little under 16,000 properties now, mostly freestanding retail, that's recession resistant, they have some data center properties, they have a joint venture with digital realty trust that's new, they have a few other property types, industrials are a focus of theirs. It could be a great time with some of these as to lock in a great yield on cost, meaning the yield on what you're paying for shares. These are great long term investments. I'm in my 40s, and this is a big component of my retirement strategy, and right now, realty income is paying over 6%, which is historically rare for the stock. It could be a good time to take a look at some of these real estate investment trusts.

Jon Quast: Well, thanks for those ideas. After the break, we're going to look at some bond yields and what it means for investors, you're listening to Motley Fool Hidden Gems Investing.

Welcome back to Motley Fool, Hidden Gems Investing. You know, we did take a question from our mailbag at the top, but I want to put in a plug. If you have a question for anyone on our show, you can send those in at [email protected]. We would love to take it if it's a Foolish question, if it's short enough to read, and you remember that we don't give personalized investing advice, but that email is [email protected], [email protected]. Now, we want to close off here with a topic that Matt brought to the table regarding bond yields, and bond yields, especially sovereign bond yields are surging. I saw in the news this morning that Japan's bonds are hitting an all time high yield, but in the US, they're hitting high yields as well. This is typically seen as a not good thing for the economy, but we want to flip this around on its head, and we want to talk about maybe where the benefit lies for some companies. Rachel, we're going to go with you first.

Rachel Warren: Yeah, I want to talk a little bit about all sides of this. When you hear that the ten year treasury yield is hitting its highest level since 2002, so 20 plus years, that means the underlying price of government bonds is falling. Yields and bond prices, they move in opposite directions. That means investors are aggressively selling off bonds for a few reasons. Now, we're still seeing a lot of resilience in the economy and the labor market that actually pushes out expectations in some cases for rate cuts, and obviously, we've seen that to be the case recently. Now, obviously, persistent inflation triggers, like oil prices due to the continued geopolitical friction in the Middle East are also keeping a lot of inflation fears alive. There's also a supply and demand imbalance. The US national debt is approaching about $40 trillion. We've got a federal budget deficit at around 6% of GDP. The government is flooding the market with a historic supply of new treasury bonds, and at the same time, big tech companies are issuing massive amounts of private corporate debt to fund the AI Data Center. There's a lot of debt entering the market. That means that buyers can demand a much higher return. That is what is forcing yields to multi decade peaks. Now, as a consumer, obviously, if the ten year treasury is spiking in this way, that's a benchmark for consumer and corporate borrowing costs. That has an impact. It can have a drag on the everyday economy. It pushes US mortgage rates up. It also pinches the federal budget. Now on the flip side of that, there are, of course, many businesses that are cash rich corporate compounders where higher yields are actually a competitive edge, if you will. The smaller companies might struggle with the high interest rates, but very cash rich businesses that are actually parking their capital cushions directly into treasuries are thriving. That is the case across a lot of industries. I'll name a couple in an industry I follow very closely, which is healthcare. You think of companies like Eli Lilly, companies like Regeneron. These are very heavily invested in treasuries. These are also very cash rich, and they will over the long run, probably benefit from what we're seeing right now.

Matt Frankel: I mean, Rachel did a really good job of covering the causes and the negatives. I love how I brought this, and Rachel got stuck with the boring economics 101 of bonds here. The ten years at 5.2 right before you were recording the 30 years around 5.5%. That's the highest in more than two decades, and there are some serious concerns, not just for the stock market, but right now, the US pays over $1 trillion in annual interest on its debt, and rising rates make this worse. Of course, this is bad for many industries. Don't think this is a good thing for your portfolio. Home Builders, I already mentioned one, real estate Investment Trust, any growth stocks with really long runways to profitability. I'm not talking about the Nvidias that are making money hand over fist, but some of these NewYork Cloud companies that are losing money and things like that could be under pressure. The fact that there is a 5.5% yielding risk free alternative for investors, it just creates general downward pressure on the market. But there are some good things to mention here. I mean, for one thing, yields driven by strong growth, which is what this is. It's a lot of the AI investment and bonds related to that, that are driving rates up. Some areas of the market can win. Rachel correctly mentioned cash rich businesses. Hers were healthcare. But I would actually add to that by pivoting to the insurance companies. They have a lot of other people's money they get to invest and they invest their flow primarily in fixed income instruments. Berkshire Hathaway's at its core insurance business, but it invests in stocks but it also has $365 billion of cash that's mainly invested in short term treasuries. I just wrote an article on fool.com how the Fed essentially gave Berkshire $1 billion raise by raising rates. Banks generally benefit in terms of their margins when the yield curve steepens, meaning that the longer dated bonds start paying significantly more than the shorter dated bonds. There's my economics 101 for the day. But, there are winners and losers in general. Rising rates are a downward catalyst on the market, but not all parts of the market are the same.

Jon Quast: Well, I think it's just good to end on that little dose of optimism because we do believe in optimism here at The Fool, and so thank you for that. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thanks for our producer Dan Boyd and the rest of the Motley Fool team. For Matt, Rachel, and myself, thank you so much for listening to our show today, and we will see you again next time.