Animal Spirits Podcast - A Lightning Fast Correction (EP.241)

Episode Date: January 26, 2022

On this week's show we discuss what we love about market corrections, why people assume they can guess what comes next with the stock market, parallels between the growth stock sell-off and the end of the Go-Go Years, the crypto crash and much more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by Ground Floor, the wealth tech platform that allows everyone to build wealth through real estate. We talk to Ground Floor CEO Brian Dalley a couple of times now about how they generate interest through their real estate debt loans. And since we had them on the first time, we actually had them on a second time last week talking about their new app called Stairs that's getting a whole lot of us actually, a listener put us on to this. You can get 4 to 6% interest and withdraw at any times. I'm doing that and so far so good. Check them out at groundfloor.com or download the Stairs app at the Apple Store or the Android store. Is the Android store the store?

It's the Android. Yeah, both platforms. Go check it out. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holtz Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for

informational purposes only and should not be relied upon for investment decisions. Clients of Ritthold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. So Michael, over the weekend, I was going through some reading material for the correction. It was Sunday afternoon, I believe. Football games are just about to start and I had my laptop on my lap. And my wife goes, what are you doing? And I said, just catching up on reading. And she goes, why do you look so intense? And into it, I said, I didn't realize I did. She said, you look different for some reason. I said, what were you doing? I really don't know, but I think it's because I was so excited

about what was going on in the market. It's bizarre, but I get excited for market corrections now. Maybe it's because we're in the content business, and that just means better content, but I just get excited to see what's going to happen with people. Obviously, the losing money stuff is not very fun and get all that stuff out of the way. Well, can I caveat what you're about to say the beginning of a correction can be very exciting the longer this goes on it's going to feel less exciting and more painful but maybe corrections don't last very long this is happening so ridiculously fast we're going to get into that but i want to talk about some of the stuff that i love about correction would you say this is happening like with 13 seconds left like that type of speed pretty much

i went 0 for four this weekend gambling i had the bucks the packers who else lost the titans and the bills see you should do the target date betting like me i just take the over and i win So I wanted to talk about, I love the reactions you get from people because when we get into a correction, everyone just assumes that they can guess what's going to happen next. Even though you couldn't guess the correction happening at this speed or at this pace, like, you have all the guys from the 80s and 90s who like grew up in that era and they say, listen, we can't get a bottom until we get these 12 things to happen. We've got nine of the 12, but until the 12 things happen, we don't get a bottom. Then you get a strategist come on from like Wells Fargo or Morgan Stanley and they say, listen, we think we probably still have five to ten percent. percent more of the correction to go. But it's a good time to start nibbling.

Yes. Then you have the end of the world people who obviously think like every time markets fall a little, they're going to get crushed and fall 50%. And then I love the statistic people because you get like, today was the first ever 98% downside thruster. And it's only happened in 1987, 1929, 2000, or whatever the date is. What about the economist and the Fed whisperer? Yeah, this is true.

Well, people are blaming the Fed did it. But then, of course, you have people like us who are state a course. Zoom out. And then I love how you get just these conflicting things where someone will go, that was definitely capitulation today. It's time to buy. And someone else goes, we have not seen capitulation yet. We're just waiting for the flush.

I love it all. I just love the reactions because you know what you're going to get. And it's just glorious. I really think this is chemical in nature. And I'm being serious. In the beginning of a correction, you have all of these chemicals in your brain, all the dopamine. And I'm not a doctor.

I don't know exactly the chemicals. But all of that, it's like a high. It actually is like a high. And then, again, as I said earlier, The longer it goes on, the high fades, and you start to feel other different emotions, and they're a little bit less fun and less exciting. At the beginning of the correction especially, you want to feel like your hands are on the steering wheel, so you guess like, I can't believe I'm doing this, but I'm going to quote Buffett right now. This is the making of American capitalist by Roger Lowenstein. Are you going to quote him in 2008, October 2008? No, this is from 1966. So the stock market fell into the way back. 22% in 1966. And a bunch of Buffett's investors were saying like, hey, the market's going to fall further. Just wait. And he said,

okay. And he wrote in his letter. He said, if you knew in February that Dow was going to go to 865 in May, why didn't you know it then? And if you didn't know what was going to happen during the ensuing three months back in February, how do you know in May? But doesn't it seem like during the correction? Everyone thinks like, could you read that one more time? So that was basically he was getting hate mail. I guess you got mail back in the day. His investors were like, what are you doing? Why aren't you doing something? And so what did he say? They said, we know it's going to go worse. And he said, if they knew in February that the Dow was going to 865 in May, why didn't they let me in on it then. And if they didn't know what was going to happen during the ensuing three months back in

February, how do they know in May? But it seems like when we get into a correction, I'm going to quote Charles Oakley for a second. Okay. Just kidding. All right. But that's the thing is like everyone just loves to think that they can guess what comes X into correction. And I would say during a correction, it's 10 times harder to guess what's going to happen. Like, it's never easy to guess what's going to happen in the short term, but especially during a correction. We could be down 30% from highs in a couple of weeks and it wouldn't surprise me. We could be back to all-time high. by spring break, and that wouldn't surprise me either. And especially because markets are happening so much faster, I don't want to pat myself in the back here, but I've been calling this, I feel like,

for a while. I feel like the market just says, if we're going to do a correction, we're going to do it and we're just going to rip the band it up. There's no like give and take here. It's just like down, down, down, and let's just take our medicine now and move on. That's what it feels like markets are doing these days. Well, yes, there are billion dollar companies trading like penny stocks where obviously fundamentals intraday don't move down 11% and then finish up 4%. So it is completely driven by a confluence of things. It's not one thing. Beespoke has this great stat. This is from last week. First time in over 20 years that the NASDAQ was up 1% intraday and finished down more than 1% on back-to-back days. That was last week. We're recording this on

Tuesday morning. And so yesterday, Monday, you saw the S&P fall 4% and then finish the day slightly up. You had some stocks fall 15% and finish up the day, 5 or 6%. I mean, obviously it's technology, it's algorithms, all this stuff. I do think that passive going from 20% of funds to 50% has to have some sort of an impact. That could be it. I think everything is just faster these days. This is a good data point from Dean Christians. The S&P 500 tech sector closed below its 200-day moving average today. While not unusual, the pace of the descent is noteworthy. The sector cycled from 15% above the average to below the average in 15 days. That's occurred

only six other times since 1927 with the last instance triggering May 2000. And we've said a million times. I forget whose quote we're stealing. Things that have never happened before happen all the time. And we're just going to have this more and more and more as markets just move way quicker today than they had in the past. And this also, I was thinking about this weekend, watching Josh Allen and Patrick Mahomes do what they did. The speed at which the game moves, at which players have gotten better, bigger, faster, stronger, more accurate, all of this. We see it in the NBA. We see it in the NFL. We see it in the market. It's just bigger, faster, stronger. So this is also one of the reasons that you can't use historical checklist to say like this is what's going to happen because this happened in the past because everything is so much different now. So if you're saying, I'm going to wait until we see this percentage of stocks rising or falling or this happening or like you can't do that anymore. Like stocks don't bottom on days like this. Yes, they do. That's what happened in 2020 or. And 2018, by the way, remember December 20? It was Boxer Day. It was that 20. What day is that? Whatever. It was that day. The market was up 9%. It was stocks don't bottom on a big up day like this. Well, last.

Two times they did. They do. Okay. So I was trying to figure out because as of the close yesterday, the S&P was down 8% still. I don't want to be that guy, but I'm going to be that guy. It's 8% correction is like nothing. The average correction since 1950 is 13 or 14% per year. So I know what we want to think like, oh, the Fed and inflation and it's always different, but this just happens. Hold on. Before you get it to your historical data, which we just said we should have used, but we're going to. I don't think anybody would care if they knew that the S&P 500 was going to stop down 8%. Number one. Well, that's what makes it's so hard because, as you say, every time stocks fall a little, you think they're going to fall a lot. Yes. And as we've discussed at nauseam, there's stocks that are getting absolutely annihilated. So the S&P is not the greatest barometer for how the median stock is doing. But yeah, down 8%? Who cares? But what if we got on 23%? That's where everyone said is at these days. And that's why it's always easier to invest in a correction after you've gone through and you say like, yeah, of course it bought them there. I would have bought. But then you can't say that during the real time because you don't know how far it's going to go.

And one more thing. The reason why you and I get excited and not despondent is because, we have put ourselves in a position where whatever happens in the market, we, our clients, we're going to be okay. We know it could get a lot worse before it gets a lot better, but we are not going to panic like I'm hell or high water. The risk portion of my portfolio is not going to be used for years and potentially decades. I'm not touching that money. So in my head, I've already figured out I'm going to have multiple corrections like this. That money that I had, that amount that I had at the beginning of the year or the end of last year, whatever, I know it's going to get vaporized.

So, like, it's the kind of thing that happens. And I feel like the more you go through that, the more that makes sense. But so the one parallel, obviously, you always hear people say, like, history doesn't repeat, but it often rhymes. I think YouTube commenter, 42069, whatever, said that or Mark Twain. So I've never been a big one of, like, this is just like that market. But John Brooks wrote this book called The Go-Go Years. And he talked about how there was this 36% correction in from 1968 to 1970. And there was a recession then, too.

That's like the big caveat now. If we don't get a recession, then this correction is just, it'll be a blip. It will. That's my take. The Dow and S&P fell 36%. And Brooks's point, and after I read this, I remember thinking like, that doesn't make sense. He said, this is worse than the Great Depression. And I thought, that doesn't make any sense because you never hear this talked about in the history of bear markets. You always hear Great Depression, 1987, 73774.com blow up in 2008. I mentioned 69. I do. Okay. You do not. I do. I do. I've read the book. too. Okay, but not many people have it. And it's a great book because his writing is great. He talked about how comparing the Great Depression to this, by that standard, a pistol shot against a mortar barrage. Like, this guy was such a great writer. But he says all the glamour stocks,

Polaroid and Xerox and Fairchild, this bucket of 10 conglomerates that everyone was investing and was down 80% basically. That's kind of what we're seeing now. He said, like, all the stocks people were invested in were getting crushed. And he said, in the Great Depression, there was like four or five million people in the whole country who were invested in the stock market. Some people think the stock market caused a great depression. There's no way that happened because 1% of the country was invested in the stock market at that time. But he said by 1970, there was way more people invested. It was more like 35 million people in the stock market.

And the stocks they owned, because you couldn't own index funds back then, got killed like 80%. So he's saying for personal people in the investment world, especially retail, they got crushed. And that's what we're seeing now. The retail people who've joined, and they said we talked about this last week, 25 million new brokerage accounts, the stuff they own is getting slaughtered. Just creamed. I own some of this stuff too, so I'm not immune to this. Oh, so two things I want to point out. What? I do think that the stock market caused a great depression. I don't think that only there's no way the stock market caused a great depression. I don't think the fact that only a small percentage of the population owning stocks had anything to do with anything. I do think the stock market costs a great depression. No way. I will refute this later, but it's not true. All right. Let's just another time. So I've spoken a lot, written a lot about rules for trying to crash growth stocks. I probably tried to buy Robin a two. or three times on the way down, tight stop, not to like pat myself on the back. But this is why you really, really, really need to be careful catching a falling knife. You really need to be careful. And I think that it's a painful lesson, but it's a lesson that I've learned way too

many times. And so not that I was successful in this time, but I was successful in the fact that I didn't blow myself up. Can we just say that the worst stock market joke on Twitter is if you like Robin Hood at 50, you're going to love them at 11. Anyway, yeah, it's enough. The other thing, go ahead. The other very good comparison. to 1969. See, we're both so excited we're talking over each other. Usually it's just you. The other very good comparison to 1969 is Jerry Sy and Kathy Wood, the two most famous investors at their time who were absolute celebrities on the way up and are getting crucified on the way down. At least their stocks are. And got a ton of retail money going to them right before

the peak. Jerry Sy was the same thing. I don't think she's going to have the same fate as him. Like his fund totally closed. He was like the worst performing fund after he got all the money. I don't think that's going to happen to her, but it is pretty crazy. So with all these growth stocks getting killed, we have a listener meal about coming next week. We talk about this a little bit because we recorded that early, that the Fed raising rates has 75 basis points. It's not going to kill a SaaS business. Their business is going to be the same. Like Netflix, you're not going to stop streaming because the Fed raised rates three times. So isn't like Occam's razor here, yes, I know people want to say the Fed is trapped and they're dealing with inflation and all this stuff, but isn't the

simplest reason that these growth stocks just went way too high? Look at this chart. Remember this one from Benedict Evans that showed like the lockdown pulled forward four years or 10 years worth of adoption for the internet. And didn't everyone go, oh, light bulb, I need to own these companies. And I don't care what I'm going to pay because look at what they're doing. We're all moving everything to the internet. Yes. And so, yes, I know like the Fed and rising rates and inflation, like that has an impact. You can't say it's not part of it. But I think that this is just the pendulum swinging so far in the other direction after they went way too high and got ridiculously overvalued. And remember that we had the meme stock stuff in January and February that year, but it was also the Bill Huang thing where

he was just going 86 times leverage on some of these same stocks. They had this blow off top in February. So we finally, we got the first correction where this stuff fell 30 or 40 percent. Now it's falling even more. And I think that's the biggest explanation is just that people extrapolated and pulled forward way too much, way too fast. Yes. And the problem with that is that we can see the opposite. We could see the opposite happen where Apple, for example, I'm looking at a chart of price to sales and whatever. Maybe this isn't the best metric, but I'm using it at Sume. From 2015 to pre-pandemic, Apple traded in a range of just under three on the low end to like maybe about four and a half on the upper end of price to sales. Hey, real quick, before you get into this,

is it just because we have so many tech companies that people use price to sales more now than they used to be, because it always used to be PE. Everyone always used to be price earnings, and now we're going to use this price to sale. The reason why we're using price to sales is I think we're using the ARC complex to compare a lot of valuations. That's what we're doing 2020, 2020, 2021. And you can't use earnings. A lot of them don't have. I guess that's a problem. A lot of them don't have earnings. A lot of them have negative free cash flow, too. So this is just the metric that we're using. Again, you can use your own composite. I think they probably all say the same thing. Right now, you know what Apple's price of sales is. So again,

three and change on the low end, five on the high end, it's 7.5. And so if we get a re-rating in a lot of these big giant tech stocks, and I'm not predicting it, but we could see it. So we get Apple this week. We're going to talk about earnings later. If Apple has great a quarter, which I probably will, and still get smush, that is very, very not good for the market. Because if we get a re-rating of these giant tech stocks, and I'm not talking about the snowflakes in the Unities of the world, I'm talking Microsoft, I'm talking Apple and Google. That is going to change things. So it might not change their business, but we're not talking about their businesses right now.

We're talking about the stock market. I'm looking at Microsoft. If you look at Microsoft price of sales, like pull it up on Y charts, Ben, if you're on right now. Look at Microsoft. The price of sales ratio has gone pretty much straight up. Here's the crazy thing about these big tech stocks, though, and why diversification is so important. So these stocks are all underperforming the overall market by a lot. Well, Apple's down 11 and the market was down 8. So this is through Monday again. So whatever happens to this stuff moves so fast, whatever we're talking about now. We were going to record this on Monday morning when we usually record it. And we're glad we didn't because the market was bottoming yesterday and went up a million percent from the lows. So this stuff happens so fast. We're just going from where we are right now. But Apple's down 11. Google is down. down 14, Microsoft is down 14, Amazon is down 23 percent, Tesla's down 24 percent, and Netflix

is down 44 percent, and the market's down eight. So all this other stuff like energy and financials and industrials or whatever is actually kind of carrying the day. Surprisingly, like these big tech stocks are underperforming the market right now, which is surprising to me. You would have thought when they have a leg down, see you later. Watch out below. Is that not kind of surprising to you? No, it certainly is. Two of the best time things in recent memory. Josh pointed this out yesterday, Elon Musk, was that maybe the best insider sale of all time? Oof. Unloaded $10 billion with this Tesla.

The other one is the S-Arc ETF. I don't know when that launched, but pretty good timing. That thing has $250 million in assets already. Wow. And the performance has obviously been wonderful. Pretty good. Do you remember this quote from David Portnoy? I'm sure Warren Buffett is a great guy.

But when it comes to stocks, he's washed up. I'm the captain now. So I think Penn, I was looking yesterday, might be down 75% from the peak. I mean, that stock was up 1,000% from the lows or something ridiculous. But that was another thing where... Down 69% right now. Wow. Now, this is a small stock, so not everyone follows it.

During the pandemic, it went down $4 or something from 50. And then it went to like 140. Now it's back to 40. Like, the moves we're seeing in these names, I'm going to guess people are not using discounted cash flow models to price these stocks these days. What do you think? never did. I'm joking. Yeah, I know you're joking. It's even more extreme right now than it used to be. Ricky Sandler was on Patrick's O'Shaughnessy's podcast talking about how fundamentals are

less and less responsible for the day-to-day swings than that used to be. On a day-to-day basis, fundamentals never really matter, but even less so these days. The good news, we do have some silver lining. Right now, a lot of this seems to be contained to the stock market. Now, hearing myself say that, that doesn't sound too great. That sounds like, don't worry, it's contained, but really and truly right now it is. And what I mean by that is, we're not seeing the spillover to the credit market. So if you look at high-yield spreads, they are, are not budging, still on the ground, two and change. So that's all good. Katie Grefeld tweeted a chart. What is this showing? The Goldman Sachs Financial Conditions Index, it's starting to go up

a little bit. But normally, when you see these giant events inside the stock market, you see a commencement reaction in the bond market. And you're not seeing that at all, which is good news for now. That's a good thing. And the Fed doesn't really come in until the credit systems get all messed up. But I know everyone's saying like, hey, the stock market's on its own. There's no Fed put this time, but, I mean, the stock market was on its own plenty times before. We've had 36 double-digit corrections since 1950. I know it feels like every time this happens, this is the one, this is different, but this sort of happens. And I can get behind the argument a little bit that the Fed is trapped here because inflation is so high and they

can't really rush to save the stock market because they need to do something about inflation because Democrats are going to be breathing down their neck saying, if inflation remains high until the midterms, we're going to get smoked. And they might get smoked either way. But from the Fed's perspective, listen how powerful they are. They haven't even raised rates yet. They just talked about raising rates. Interest rates rose, so especially on the short end, like one and two year treasuries. They all rose. The stock market sold off. The speculative junk got absolutely annihilated. And the Fed hasn't even had to raise rates yet. Doesn't this mean like the Fed, they're like the Wizard of Oz. They just say something. And look at what they did. They bought

themselves some time to potentially see what happens, basically. I can say like at a certain point, maybe they're trapped, but if inflation is going to lower by the end of the year, which it certainly could, are they really trapped? We've been discussing this, but. Yes, I do think they're in a precarious position. I do. But if inflation is lower six months from now, is six months of pain in the stock market really going to force the Fed's hand? Depends how much pain. Let's circle back to this. Some more perspective. Last three years, annual returns to the S&P, 29, 17, 27. 291727 and right now after this decline you know where we're back to ben we're back to where we were and wait for it October that's my point though like I know like the reasons make it seem like

it's scarier but this just happens like if you're in the stock market you have to expect this to happen so I don't want to like poo poo this and say like oh it couldn't get worse and of course it could but I think you just have to like sometimes saddle up and eat your losses you're right you're absolutely right I got one more silver lining the other silver lining is If you look at the number of NASDAQ stocks making a 52-week low, it is pretty close to where we peaked in March 2020, which is insane considering the NASDAQ composite is down. How much is the NASDAQ composite down? Let's see, 16% or so.

So my point is it is possible. Again, not predicting, but you have to be open to the fact that a lot of the damage has already been done. Now, I know I'm arguing with myself, but counter to that point is that, yes, a lot of the damage has been done in the smaller names. So the NASDAQ composites off 14%. The counter to what I just said would be, yeah, a lot of the damage has already been done, but in the smaller names, they haven't even started to get to the apples of the world. Now, Nvidia is down 30%, but Apple, Amazon, Google, Microsoft are still pretty close to an all-time high. And if they go, watch out below. You got to

balance all of those things. If you're thinking about where the market goes now. I guess that's the Jeremy Grantham thing. Did you read his GMO piece? I sure did. So he says that we're in a two-sigma equity bubble and he said this is just like 1929, 2000 in Japan in 1989 and 2006 for the credit market bubble. He's basically saying, like, we have to see a 50% crash here and this is the start of it. I'm shocked at the certainty with which he says, this is it. I think there's a difference we're saying, like, things are crazy. We're going to see a 50% bubble and saying, this is it right now. I feel like he's doubled and tripled down so many times. So I looked back and Sam Rowe wrote this piece in 2013. Grand Theum says investors are being bullied.

into buying risk assets which are doomed to crash. So he called it a bubble in 2013. Do you know how much the stock market would have to fall to get to the level he called that bubble? 60%. 75% to get to the point where he called for a 50% correction. So I don't know how you could be calling for 50% correction all the way up and miss hundreds of gains while you're calling this and then say it's going to happen now. Like I have a lot of respect for him and he's a legend and whatever, but I just can't imagine having certainty in a call like that with all the things. So if you look back at the historical 50% corrections, the stuff that had to line up. So just like this awful recession, like you can't have a 50% correction. And remember, even the 2001 was just kind of a blip of a recession, and that's

because we have the dot-com stuff. But then you also had to follow through from Enron and Worldcom and 9-11. That was like the tail end of it. That made it even worse than it was, and it lasted three years. This is the time where I'm taking like any certainty ahead about anything off the table and trying to predict. Here's another one. This is from 2010. The title of the article, which he didn't write, but this is what he said, have cash, wait for stocks to fall. This is 2010. He was calling fair value on the S&P 500. Fair value to him was 900. So again, I also have a lot of respect for what he's done. He's had a wonderful career. But you have to take this with a grain of salt. He's been saying the same thing for a decade. And maybe this is the time where he's

right. And he sees bubbles in stocks and bonds in real estate and commodities. He said we're in the broadest, most extreme global real estate bubble in history, too, which I've got some stats later that. I just don't know how this helps anyone, except for him if he's right. I guess I will say, and he's not even involved in the, as far as I know, in the investment process these days. But credit to GMO because if you look at their flagship fund, it's not lip service. If you look at what they're invested in. Emerging market value. They are very much positioned for the world that he's talking about. Do we still have long, short funds that buy cheap stocks and short expensive stocks? Because if we do, shouldn't those funds be just doing amazing these last six months or so?

Good for them. It's been a long time of pain. I'm surprised we haven't seen any stories like that saying we've got this value. Shouldn't like a David Einhorn finally have like amazing performance. We will. You know what? Einhorn's had a rough couple of years. I'm rooting for him. Yeah. I mean, because this, I said this is kind of like the 1968 to 1970, but it's also a little bit like the 2000 to 2002, where growth stocks got crushed and value finally did well. Obviously, it's much shorter time frame, but that's happening a little bit, too. Let's pivot to the economy. Full Stock Economics had this amazing blog post. We've spoken about them in the past. Let's start with this one. America's fastest recovery in 40 years. We're looking at Recessions

07-01, 1990, and the change in employment to population ratio for prime workers age 25 to 54. This is amazing. By the way, I think you, shared this blog post, it was like 18 charts that explain the economy. If I see a blog post or a piece that's all charts, I'm in. Count me in. Maybe I'm just a visual learner or something, but we hate threads, but we like threads and blog posts. Well, yes, but I'm saying I just want visuals, especially when explaining the economy because it just, like, look at this. Yeah, I feel like these charts crystallized everything. What's the next one, Ben? Spending on durable goods, which is basically this U.S. retail sales figure that we talked about

before. So it looks to me like services dropped and are basically back on trend. as the buying of goods. I have seen people say in recent weeks, like, see, it's not supply chain stuff. It's all people buying stuff. Obviously, you're weighing a little bit there. By the way, I'm sure we'll get into the labor stuff. I was driving through my hometown of Traverse City, Michigan last week. So this summer, there was signs saying McDonald's, $14 an hour. I was just driving through there for the first time since the summer. $21 an hour at McDonald's. 21. I'm speechless. Wow. On Monday, I try to order. to Starbucks as I do. And my store was closed. I thought that was weird. Okay. So I went on Tuesday

and I said, what happened yesterday? They said there were short staff. They couldn't open. And this is a booming Starbucks. This is the one like right in the center of my town on the corner of the main road. Closed. I feel like every Starbucks is booming though, kind of right? Not the stock. Is the stock getting kit? Okay. You share this. This one kind of blew my mind. In 1959, the average family spent 19% of their budgets on food. That felt it's 7% in 2019. Have you been to the grocery store? So food went from 20% almost, and then clothing went from seven to below five. Housing really isn't that much higher. This is surprisingly, it's up a little bit, but it's surprisingly consistent since 1960, the percentage that you spend on housing. This is

the interest rate chart right here. So even though housing prices have gone up, the amount you spend on it has remained relatively constant because interest rates are falling. Is that surprising to you at all. I mean, you had a few blips, but... So Grantham said today, houses in the U.S. are at the highest multiple of family income ever, which he's probably not wrong if you're looking at the price of a house. Obviously, he's not adjusted for square feet, which we've done, but he's not adjusting for the mortgage payment. And he hasn't adjusted for open spaces that you can entertain. HGTV has made that happen for everyone. We've got way more entertaining spaces. But it's basically been around 15% of family budget for a long time now. That really surprised. So food is dropped, clothing is dropped,

has remained the same. So people are spending more on health care and education and the thing about this chart that's kind of bunky though is. I'm sure you could debunk it if you wanted. It's an average. And so it's including a lot of the people that have already paid off their mortgage, which is a large portion of the country. So that could be like the Bill Gates thing. Me and him both have a combined number of them. So I think there might be some funkiness going on it. But anyway, we'll look to this obviously. It's a great chart. But it's the trend that is interesting to see. So if you're using an average for the long term, the trend is what's interesting and not necessarily the absolute numbers, I guess. All right, let's talk about crypto. Last week, we spoke about how it's really interesting

that you could see, unlike, say, it's hard to do this with ETFs or individual stocks, certainly how much the average holder is up or down. In crypto, we know. And so this post is stale at this point because it's said that Bitcoin price is currently traded down 35 percent from the all-time high. Now it's down just a little bit more than 50 percent. But even at 35 percent, Ben, approximately 5.7 million Bitcoin are now underwater, which was 30 percent of circulating supply. Now, I don't know how much that was after a fifth percent. Is it 35? Is it 40? I don't know. But it's amazing. It's 50, yeah. I was talking to you about this yesterday. I started buying Ethereum, I guess, in 2020. And I've been buying periodically and maybe on the way up, but certainly

on the way down. And I'm still underwater. This is one of those things that it's like the round burgundy. I'm not even angry. I'm impressed when his dog is the wheel of cheese. So in the last year, we've had two 50 percent. So first we had a screaming to an all time high, 50 percent crash. This is in Bitcoin, I guess the theme is probably close. Then you had a screaming back to the all-time high, then another 50% crash. And this is while institutional capital is flooding the space, I think just the volatility, I know you'd think it's got to go away. Eventually there's more money coming in. And maybe it doesn't get like an 80 or 90% crash anymore. No impact. But two 50% crashes. So this, I told you this yesterday. If this like whole Web 3 takeover is

really going to happen, doesn't this make you Uber bullish on stable coins? Because if crypto is going to be this volatile and all the other like defy stuff is down what 70 80% right now maybe in a lot of places i don't think you can get mainstream adoption with that type of volatility i mean this is like the u.s in the 1800s or something we're on the frontier we're going from texas to montana like 1883 and crossing the river is one of these downturns basically where you lose half the people but i think you almost have to have stable coins be a bigger part of this ecosystem or people are going to have to create stuff that doesn't have as much volatility because i don't see how normal people can go, I can't handle 50% volatility with this stuff twice a year? Like, that's ridiculous.

That's like when the U.S. economy would have a great depression, like once every three years in the 1800s because we're on the gold standard. My thesis for higher Bitcoin prices were simply supply and demand and institutional money coming and was going to push it higher. Clearly, that has been proven absolutely wrong in the short term. I never thought that a 50% crashes off the table. Never said that. In fact, I'm pretty sure I, as we were talking to people about our index, that this certainly will fall 50% at some point. Certainly. I thought, and I still thought, and even though it's a little bit less conviction, that like a 70% decline with a winter, that would surprise me still.

Down 50%? Never thought that couldn't happen. If we fall in another, the difference between down 70, down 70, we'd have to fall another what to be down 70? Down 30. Is that down 35% more? What is it? Something like that, yeah. And obviously, it's far more correlated still to the stock market and not just stock market, but tech stocks. Risk. I am surprised that it is still as volatile as it ever has been. And I spoke about the fact that it's not an inflation edge. I wrote this post that it's not an inflation edge because with inflation at 40-year highs and Bitcoin down 50% off its high, I just don't understand how that is a hedge against inflation.

And I got some pushback that I think is not entirely unfair. One of the pieces of pushback I got was actually it was the perfect inflation hedge because Bitcoin did have an spectacular run up to the inflation, and now that inflation expectations are falling, Bitcoin is falling to it. Well, Bitcoin's not falling. It's crashing. But Doug Colquitt did a thread on this basically saying, he doesn't understand how people can say that the recent market moves show the crypto inflation hedge narrative is dead because it's been moving eerily in line with CPI break-even. So John Street Capital replied to him with a chart showing break-evens and crypto. And yes, this is an impressive chart. They have moved.

not in lockstep, but pretty damn close. But I guess my pushback would be, who cares about inflation expectations? Don't we care about actual inflation? I guess what they would say to that is, no, no, no, no. Bitcoin is a forward-looking barometer of inflation. Anyway, I guess the point is I see both sides. I'm coming around to the idea that there is no such thing as a short-term inflation hedge besides tips.

So people wanted to make it gold. And obviously gold hasn't either. The thing is Bitcoin is probably, if it goes up, it's a long-term inflation hedge. How's that? that's the thing, because it did just fine when inflation was really low for eight years before 2020. To which they would say, yes, Bitcoin has many things. And that's the same thing with the stock market.

I think the only thing you can say is a short term will do a one for one with inflation is tips. Or interest rate options. It's the only true inflation hedge. Everything else is you're going to find problems with it. It's not going to work sometimes. Because, okay, I don't know, if inflation goes from seven to three and a half or expected Bitcoin to fall in half.

And you could also say that even tips have their problems because tips are. already included the expected inflation. They only had you get a surprise inflation. Unexpected inflation, but at least you get the one-to-one where tips have done pretty well. Let's return, and then we'll move off this topic. Let's return to how long this can go, how deep it can go. And I will say, take my opinion with a gigantic note of salt, who gives a shit what I think. I'm not nervous about Bitcoin today. If it goes to 25, it won't change that I feel that it could be. The S&P is going to bottom at 15.93%. Yeah, yeah. I've checked my indicators. Ben and I were talking about this yesterday. Like, not at all.

not even a little bit. What could shake my conviction? I don't know. I think the amount of talent and money still pouring into the space, I think it would be hard for me to shake my conviction that the crypto space is going to be much bigger in the future than it is today. That's all I can say with confidence. And again, I could be proven. Listen, I thought the bills were going to be the chiefs. I was pretty confident about that. So anyway, but here's a deal. This guy, Michael Polito had this really, or Mike L. Polito had this really great thread showing that the ROIs are diminishing, but so are the drawdowns. Meaning, from 2001 to 2000, 2013, Bitcoin went up 800 times. Over that period, it had a 94% drawdown. And then the next cycle went up 600x had a 91% drawdown. The next cycle up 100x, 87% drawdown. This cycle up 25x. The point is the expansions are getting less and less. Obviously, they have to, like just otherwise Bitcoin's going to take up with the world. And so are the drawdowns. So is the 70% drawdown possible? Of course it's possible. I don't think it's going to happen. But again, the market will be the ultimate arbiter of what happened. So we'll see.

So I think the total crypto market cap went from $2.8 trillion to $1.5, basically, 1.6. I do like how they have that crypto market cap, whatever, coin market cap.com or something. You can look at that and just see how all of them are doing and just says the total crypto market cap. Just the fact that we can see, I guess this is the decentralized paradise, though, that we can say, listen, we can see a trillion dollars and a 50% of our whole thing wiped off. And everything's fine. It doesn't impact the financial system. It just impacts these individuals. So I guess that's like the dream of decentralization.

We can have these crashes, and it's not like it's going to spill over into the greater system and cause other problems elsewhere. It is interesting. It's looking at like crypto Twitter. People have, and I guess it depends who you're following, whatever. But people do seem to have this unshakable conviction in crypto. Whereas with stocks, it's the opposite. The lower stocks go, the more people tend to freak out. I agree.

That's like the whole thing about the old thing about like the stock market is the only place where prices fall down and people run out of the store or whatever. But that's because we've seen that the stock market can go much lower and be more painful. If we're in this period where things are faster, I think we could just see more of these. And I'm honestly surprised that we haven't seen. I guess you can call some of the losses in 2020 like a flash crash. But I just think that like the possibility of those types of flash crashes because of the way the market is structured now is so much higher than it was before. Like a random down 6% day or something. I think these sort of things, these really flash in the pan corrections, and I don't know.

if this is one of them or not. I think it might be. I think that's where we're headed is just more of those. And this is why for most people, most of the generic advice that you hear about how to position size Bitcoin, position it accordingly. Probably single digits makes sense for most people if you're going to dabble because a lot of people haven't been in crypto for four years and they haven't experienced a 70% decline. And not everybody is on message boards all day and sees all the activity and has all the conviction. So just take it easy when you're talking shit about this. I think it's also kind of good just to know that like I know people love to like, dunk on people like Chamath and Kathy Wood that did so well. And maybe they got a little over

their skis and overconfident. But it's just a nice reminder that everyone makes mistakes or everyone has a down period in the market. Crypto did amazing for so long. I made so much money for so many people. And then it has these 250% corrections and all these growth stocks finally getting dinged. Like everyone, no matter what kind of investment strategy you have, is going to have a period where they're doing poorly. Are you saying diversification works? I'm more saying like to the people who are taking so much joy out of someone else's pain. you'll get it. Or you already had it because you didn't get it on the way up. So like that's the thing is, and I think that's why people find so much joy because if you're a value investor, like you had all your portfolio and value stocks. For years, you've been mocked, right? About being like over the hill. You saw the Buffett, Kathy Wood chart that everyone's sharing. Oh, yeah. I totally get why value investors are salty and doing a little bit of celebrating. How could you not? I mean. Yes. Frankly, they probably deserve it. Yeah, they've been on the other end those for a long time. All right. We've got a week, Ben. We have got a week. On Tuesday, we've got Microsoft GE. just reported. Then we've got Boeing and Intel and AT&T and Visa and Apple and McDonald's and

Robin Hood. This is going to be a busy week. I cannot wait for Robin Hood earnings. I am so, so excited to see. Now, I'm not talking about the stock price. I'm so excited to see what the report reveals. I want to see user activity. I want to see revenue. I want to see it all. I want to see it all, Ben. So I guess they don't have the thing where you think, well, during a bare market, they're going to do better because more people are trading. But that doesn't really work for them very much, does it? Unless they're selling more order flow somehow. Well, same thing with Coinbase.

You would think that Coinbase's stock would thrive in market volatility because more vol, more trading. That's their business. And it's been the opposite. It's been pretty damn correlated to the price of crypto. So you would definitely write about that, Ben. But let's talk. So Coinbase is down 50% right now.

Yeah. And by the way, speaking of Robin, Robin, it's down almost 90%. I will say this, I'm shopping. I'm shocked. I know we shouldn't have the ability to be shocked in markets anymore, given that oil went negative. But if you told me that Robin Hood would fall nearly 90% from its highs, I would have said, Rob Burgundy, I don't believe you. Yes. And I mean, part of that is like an artificial hybrid had that one week spike. But even from the IPO price, it is way, way down. All right. So again, download the quarter app, Q-U-A-R-T-R. If you want to listen to earnings calls, we will certainly be making good use of that this week. All right, let's talk about, oh, this is. It's actually interesting. Before we get into that, Mark Rubinstein wrote a post this week. Mark Rubinstein has an amazing substack. He wrote one paper analyzing over 16,000 calls found that more than half of all calls included some form of praise from analysts. Analysts suck up to management at average rate of a number of the sample. So basically, that's what they say, like, great quarter guys or whatever. I think I mentioned before I did an internship for a group of these analysts. They don't have a choice. It's like career risk. They have to suck up to these management teams because that's how they get the information. They have no choice but to do this. unfortunately. All right, so let's get into it. Last week, we had Procter & Gamble, which is basically household supplies. Listen to this, Ben, listen to this list. Procter & Gamble owns or produces, whatever.

Pampers, Bounce, Downey, Tide, Bounty, Charmin, Tampax, Braun, Gillette, Head and Shoulders, Head and Shoulders, Old Spicep, Fabriz, Mr. Clean, Crest, Metamusole, Peptibismol, Pril, OTC, and VIX. We probably use 90% of that in my household. Pretty good look through to consumer. So they said, organic sales, increased 6% for the year. Not bad. 6% for a company like this. Pretty good. This is a little bit of shenanigans. I'm going to call bullshit. This is a consumer staple play. We use all this stuff. What do you think they're from their all-time high right now? If you had to guess. I would say that the stock's doing well. Down 6%. If you look at their chart, they're down to 3%.

This is a stock you own for this specific reason. When everything else blows up, Procter & Gamble is probably going to be fine. Damn, I don't know this chart up, but I was talking to Rucci from Whitechards about this. I read this. The company returned nearly $7 billion of cash to shareholders via $2 billion of dividend payments and nearly $5 billion of common stock repurchases. But guess what, Ben? They don't net out the shares issued. That's an important little detail. They don't talk about how many shares they issued. So yes, they might have bought back $5 billion worth of stock, but it wasn't net because they issued a lot of shares as well. So whatever. This is the meat. Gross margins for the quarter decreased 400 basis points versus a year ago. Well, we know what that

comes from. That is the cost of goods going up. Basically, right? Exactly. The company said its current fiscal 2022 outlook includes headwinds of $2.3 billion from higher commodity costs, $300 million after tax for higher freight costs and $200 million after tax from negative foreign exchange. All right, whatever. The funny thing is, though, you talked about their sales increased 6%. Organic sales, that's pretty good. But I'm saying they're complaining with these higher costs, but they're obviously probably increased seeing their own costs, they're charging, and they're probably going to be fine on a net basis. Well, but their margins went down 400 basis points, so they're not passing it all along. We had United Air. This surprise to the heck out of me. United purchased 270 new Boeing and Airbus

aircraft's largest combined order in company history, and the biggest by an individual carrying a decade. So are they bullish? I mean, this is a pretty bullish signal. Well, I like the fact that they launched a new venture fund. Like, what is United Airlines going to, can they maybe? Blockchain? Well, no, do a startup in comfortable C. seats, maybe, seats that aren't totally uncomfortable, and then the button's broken so you can't put it back. They announced the largest domestic flight schedule since March of 2020, looking to ramp up capacity to this year.

So call me bullish on flight. Domestic travel, let's go. All right. I'm flying in two weeks here to Disney. I didn't tell you this. I'm going to Miami on Sunday. What for? Well, because I was so bummed out that our conference, the exchange conference that we're going to got canceled. Robin told me yesterday that she can work remote Monday, and she's off Tuesday for whatever reason. And I said, let's go to Florida. We have credits from 2020.

Do they still ask? I have like four canceled plane tickets. I had credits from rewards. So I rolled them over to this. The weather is going to be 60 degrees on Sunday, which kind of stinks, but it's better than being in New York in 25 degree of weather. Anywho, let's talk about Netflix. Holy Gazoli. So Netflix, you probably saw, felt 22% or 23%.

It was a Black Monday for Netflix after they reported earnings. Let's go over the numbers. So full year revenue, $30 billion grew 19% year over year, operating income, $6 billion, 35% year over year. But they slightly over forecasted paid net ads in Q4, 8.3 versus 8.5. So not a huge miss. Their drawdown in 2020 was 18%. They're now down 45%. You put this in a blog post.

You compare Netflix now to 2018. And in 2018, you said they had 130 million subscribers, 14 billion in revenue and 900 million. Just do the difference. So how much more do they have today versus 2018? So today versus 2018, they have almost 100 million more subs. They have double the revenue and they have five times the net income. Yet they're basically at the same price or lower than they were 2018. Lower.

Mental. Listen, we understand how the stock market works. We know that it's forward looking. But most people that are not market professionals see this and their brain gets turned into a pretzel. Frankly, mine does, and we do this a lot. Wow, July 2018, they're at 413 a share, and now they're at 377. This is, though, is what makes stock picking so, so hard, because you would have said, during the pandemic, okay, everyone's going to Netflix. They're seeing all this bump. I'm buying this company. This is like a recession-proof company. And the stock is

lower than it was four years ago. But rewinded to 2018, if somebody told you what Netflix was going to do with production, how they were going to dominate the box office and the Emmys and the stock would be down and how much business you wouldn't believe them the business is so much stronger today so much stronger today than it was four years ago but the problem is they have this beautiful chart where they show weekly global paid net ads year to date okay they show this every single quarter and 2019 2018 and 2020 especially where they pulled forward on the course because of the pandemic dwarfs where they were in 2021 and dwarfs where they are in 2022 and that's it are they a victim of their own success that there's now a million other streaming platforms. I know Netflix

remains the biggest, but they finally got some competition. It's that. And it is the inflation, the interest rate, rewriting of stocks. Because what were they trading for? I forget the numbers I put up. Let me just look right now. So Netflix was trading at, I mean, this is it. The price to sales, we'll use some other metrics, so we're not only using that. In 2018, the price to sales was 14. Now it's six. Here's how I debunk your interest rate thing, though. Interest rates were higher in 2018 than they are today. Doesn't matter. It's the direction. No, whatever. No. What do you mean? Interest rates were high. It's not the level. It's the direction. Okay. Well, that's an excuse then. Fine. That's not a reason. That's an excuse. The price to earnings ratio in 2018 was like 270.

Now it's down to a more reasonable 33. I mean, it's still high. So this is the thing that we're talking about here. It's like this is the concern to it. It's all about interest rates. investors re-rating stocks because Shopify, which everybody loves for good reason. It's an incredible stock. It's an incredible company, I should say, growing like gangbusters, but it was trading over a hundred times sales. We have to talk about Peloton too. Okay. So they got an activist who wants to push a CEO out. They're raising prices after they just dropped them because of inflation. This was a $10 billion market cap company in 2019. Then it went to 50 at its peak in January of last year. Now it's back to nine. So Peloton fell 70%. If you would have bought it when it fell 70%.

I did. I had a friend who did this. You'd be down 50% from buying it down 70. I think it's even a little worse than that because I bought it down 70% going into earnings, remember? And then it fell 30 and then I sold. And then I think it still fell 50% from there. Well, right, because it keeps getting smaller the whole way down. But here's the thing.

I stayed away from this because credit to me, maybe because I'm exercise officinato. Like I know that all exercise stuff is a fad, basically. You were on this. You were definitely on this. I just think there's never going to be a global. It cycles too much, this stuff. but I still think it's a great product, but for me personally, it's only a great product because of where I'm at in my life. So, like, I can hop on the bike for 20 minutes on the weekend while my kids

are watching cartoons and knock one out. But for some other people, like, they would prefer to go to the gym or do something else or get outside. And so you still got yours, right? I see it in the background there. All right. Let's move quick. We're getting long in the tooth here, as I say. Okay, real quick. So Bloomberg had this guy Mike Simonson on. Did you listen to this? Did not. What do you mean Bloomberg? Oh, Joe and Tracy? So on Adlots, Joe and Tracy. And he had some crazy housing statistics. So this is, like, I would be more confident in saying that the housing bubble, if it is, Jeremy Grantham, won't burst than the stock market bubble.

Because first of all, he did this total inventory of home. Is it a new record low all time? And he's saying one of the biggest reasons that we're having such a low inventory, interest rates are so low. So you refinanced your house to 2.8 or 2.9 or 3 or whatever. He's saying a lot of people, if they're going to buy a new house, they're keeping their old house because the rates are so low and they're getting equity because it's going up.

and they're buying a new home and keeping the old one and renting it out because the rates are so low. So it's like, why would I sell this house when it has a 3% interest rate? And he's saying those low rates of current homeowners are going to keep the supply low for years and years and years, even if rates rise. Because why would you sell a house that you're paying a 3% mortgage on to buy one to pay a 4% mortgage on and it's at a higher price? Here's another one. We've talked about this in the past. He says that 90% of rentals in the United States are from individuals. We keep talking about Black Rock and all these professionals owning the company or owning rentals. It's 90% owned by individuals.

And he's saying that is only increased throughout this thing because more people have turned into landlords by holding their old houses. Anyway, I listen to the whole thing. He talks about how it's going to take basically years and years because we're not building enough houses and the supply is so low because people have these low rates locked in that this low supply of houses is not going to get better for years and years and years. and I think that puts a floor under prices for a while, for a long time potentially. I think that's right. Did you bet on, will there be a recession in the second quarter? I did. What did you bet on? No.

You bet now? Yeah, of course. So, you know me, I like long shots. When I'm betting for fun, which is what we do on Calci, at least that's me, I'm not putting big money here. By the way, Calci is probably my only speculation account that is up in a year. I've been rid on all my bets on Calci. I don't think I've won once, but Because this is like you doing your parlays

Listen, I'm doing it for fun I'm looking for a rush. I'm not looking for a safe bet here But I can't in good faith bet on Even though the recession, even though it's only 17 cents To buy a recession, I can't do that I'm a patriot. That's true.

You don't want to bet against a recession. So yes, I said no, it's still 83% yes, 17, no. I can't remember what it was when I first bought it. I know, there's no juice there. It's like, don't like those odds. Anyhow. Let's do one really quiz survey. Okay.

This is this person on Twitter, Nina Strominger. I asked Wharton students what they thought the average American worker makes per year, and 25% of them thought it was over six figures. One of them thought it was 800,000. Really not sure what to make if the real number is 45,000. I don't know. That's obviously the idea is that people go to Wharton are just rich kids and they're not living in reality, but maybe part of this is just people in college just don't know a lot about this stuff,

like how the real world works. Well, I'll take the other side of this. Listen, 75% of them got it right. Okay. So what do you expect from college? college kids. To me, this doesn't say anything. It doesn't say 75% of them got it right. Just 75% of them said under 100K. Okay. And that's what it is. It's under 100K. All right. I thought that was good. All right. We're going to skip listener questions because we are doing a full

listener question one on next Monday. Okay. Ben, last week I spoke about the Godfather part three and I couldn't believe all the awards that it was nominated for given its reputation. Have you seen it? No, I don't think I'm going to either. I'm not going to see it. No way. Okay. So, it was nominated for Best Picture So Dances with Wolves won I've never seen Dances with Wolves Also won Kevin Costor Best Director

It's on my list You'd like it, yeah I'm gonna try and get to it this week But in that year The other nominations for Best Picture Were Awakenings which Not only have I never seen I've never heard of

Ghosts which is obviously a classic One of the best And Goodfellas Which clearly should have been the winner You want to know my way To fix the Oscars I think we should put movies and TV together

So movie dramas, TV dramas, put them together. What do you mean? Best actor is best actor in a year, TV or movie. Because there's no good movies anymore. So if you want to win an Oscar, stop it with just no good movies anymore. Not true. Mostly true. It's mostly true.

There's very few good movies. So Walter White from Breaking Bad, Brian Cranston, would win the Oscar a year for being the best actor. It's an ambitious crossover. Put them up against the movies. I don't hate it. I didn't really watch anything this week because it was football Sunday and Saturday. I'm doing a followup on Yellow Jackets. We finished this. Did you finish this show or not? Didn't care for it. I'm doubling down. I thought this was a great show. It was one of those shows afterwards. You want to talk about it and do theories. It was mystery. It's certainly not for everyone because it is a little dark and twisted. But I thought this show was fantastic. I really, really enjoyed it. I don't know why. It just didn't grab me. I'm not sure. I think I'm going to take the all on this one because everyone seems to like it. I thought it was a great show and I'm excited to watch it again when it comes out for the next season. We're halfway through Ozark. Amazing. I wish this was a show. show that was released on a weekly basis. Hey, that's my take. Is that you're going to say to?

I thought we spoke about this. You still my take. Oh, did I? Okay. I want to, it to simmer a little bit. I haven't watched it yet. I'm waiting. I'm all the way back in. And finally, we got Monopoly Jr. for my daughter for Christmas. I finally played it this past weekend. Monopoly is better than regular Monopoly. That's my take. Good take. Have you ever done that before? So you only get $1 bills. The board is smaller. It's easier to buy stuff. I don't know that I've ever finished a game of regular Monopoly in my life because it just drags on too long and then someone gets angry and, like, throws their chips or their money and leaves because, like, someone else owns all the hotels.

So Monopoly Jr., better than regular Monopoly. That's my take for the week. Good take. Good take. All right, Ben. Arc is down 5.3%. So, wait, you're telling me that huge comeback yesterday didn't stick? Not what you want to say.

Okay, so this is like a 85% reverse thruster day. So that means that we're going to bottom in four days. Turn on the thrusters. Listen, we joke now. We will turn more somber as the weeks go by if this continues. Okay. More surprising to you. This is a 30% bear market or new highs by the end of the year. More surprising. That's a really good question. It's hard to handicap that. I would say, I would be more surprised if this was a 30% bear than new highs by the end of the year. I think me too. I'd be more surprised by that. If we had new all-time highs, it's like, all right, this happens every single time.

True. Yeah, that's true. All right. Hit us up, Animal Spiritspot at gmail.com. If you want to watch us and see all the charts and visuals and gifts and what else, memes, movie lines. Go to the compound and watch our show on YouTube. See you next time.