Animal Spirits Podcast - A Once in a Lifetime Investment Opportunity (EP.385)

Episode Date: November 6, 2024

On episode 385 of Animal Spirits, Michael Batnick and Ben Carlson discuss: Warren Buffett's massive cash pile, the performance of the average stock this year, the Polymarket whale, markets in everything, Twitter replies now and then, the cost of college is going down, Bitcoin is still king, private equity in targetdate funds, politics vs. investing, and much more! This episode is sponsored by YCharts and CME Group. Get 20% off your initial YCharts Professional subscription when you start your free trial through Animal Spirits (new customers only). Sign up at: https://go.ycharts.com/animal-spirits Access CME Group's valuable educational materials and trading tools and learn more about what adding futures can do for you at: cmegroup.com/equityfutures Sign up for The Compound newsletter and never miss out: thecompoundnews.com/subscribe Subscribe to The Unlock newsletter: https://www.advisorunlock.com/subscribe Find complete show notes on our blogs: Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by Y charts and CME group. Michael, I did some research on Y charts the other day, and they have these comp tables. I don't know if you're familiar with this. Pick an index. You don't know if I'm familiar with comp tables. Hello. I pulled up the Russell 3,000, and I broke it down by year-to-date return. How many stocks are up?

How many stocks are down? How many stocks are up this much and that much? I'm slicing and dicing returns and comparing it from 2024 to 1999. Pretty cool feature. And some of those stats may surprise you. We're going to save it for the show, but very, very helpful. I use Y charts every single day. It's the first thing I check in the morning.

It's the last thing I check before I go to bed, right? Got to check those Japan futures or something? No, I'm just kidding. I don't do that. Y charts is integral in everything that we do, though. So if you want to check out Y charts, you've never done it before, go to Ycharts. Tell me, Animal Spirits, send you, get 20% off your initial Y charts, professional subscription. When the rest of the market slow down, the futures market keeps moving.

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All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. It is Tuesday, November 5th, 943 Eastern. So by the time you're listening to this, I was about to say you'll know the results of the election. Maybe we will, maybe we won't. But anything that happens after this in terms of market reaction, obviously we'll, we'll, We're not going to get to that today, but Josh, Ben, Callie, and myself are doing, we're coming to YouTube Wednesday evening to talk about what happens in the markets through the lens of the election.

4 p.m. Eastern at the compound, right? Yeah, so don't get mad at us if we don't have good election takes here. You can listen to that stuff from anyone. Right? So we got other stuff. One more programming note. Next week, Ben and I'm coming to the Midwest. Is it next week already? That's right. It's a week from tomorrow. Ben and I are speaking. We're doing a podcast with Alex Morris from FM Investments in the great city of Chicago. My second favorite city, I hadn't been to Chicago until 2017.

What's your first city? The one that I live in. Oh, okay. That's a cop-out answer. How's that a cop-out answer? That's my answer. Okay. What's your favorite city?

Can't be Grand Rapids. Can't take Grand Rapids. well, yeah, because it's not the best city. With all due respect. You've never been here before, Mr. Coastelitis. But anyway, I love Chicago, and I'm very excited to visit, as always. I can't wait.

So, it's a night of, we're doing a live talk your book with Alex Morris from FF Investments and cocktails afterwards, and I believe we'll put a link in the show notes. It's free, is that right? That's what the link says. Maybe I'm wrong.

So if you're in Chicago area, you want to see us, come say hi. All right. All the details in the show. Who are you voting for? Warren Buffett's cash pile. Okay. Deal?

You've seen all the stories about this. I feel like this is a, this is turning into a once every six months story now. Buffett's cash piles at record highs. This is from CNBC, Berkshire Hathaway's Cass Fortress tops $300 billion as Buffett sells more stock, freezes buybacks. So the inclination here is, okay, Buffett's getting defensive. It's time for the market to get defensive. I saw a headlet about Buffett, Buffett getting conservative before the election. Yeah, that's what that.

Warren Buffett, investor for 75 years, has invested through 16 elections. And of course, what does he do before every election? He raises cash. That's what Warren Buffett does, of course. How about this? The guy's 94 years old. Maybe he's conservative because he's that. He's obviously not investing for himself.

But I think the point is, regardless of whether now is it, it the right time to get defensive or not? Like, the market is up a lot, and that's probably why he's selling. But if you're going to try to match your time horizon to a 94-year-old billionaire who has an insurance conglomerate that always has a ton of cash on hand, I'm guessing he probably doesn't have the same time horizon as your 401K or brokerage account. Probably not. Just a thought.

But that's my thinking. Also, his return on the investment in Apple, it could be the single greatest investment of all time, just in terms of dollars returns. Just dollar. Yeah, just not percent. Just dollar for dollar. And Apple's like, I don't know, Apple's not doing so great. Like, it's not like the revenue is not really growing. The company is not really growing that much. So he had an incredible return and he's taking some chips off the table. I would not read into this at all.

It is kind of funny, though. I remember when they bought Apple for the first time, no one was like thrilled about it. No one was being like, oh, this is going to be the greatest investment ever. People were kind of like, oh, geez, he kind of lost it. A little bit he's buying Apple. Yeah, funny. It really was an amazing investment. Okay, let's talk about the stock market this year so far for where we are. There is a new substack I follow. This is a listener of the show.

It's called Duality Research, former finance person. I think he lives in Switzerland. We've got a lot of international audience here. You know that? I do. So he makes some of the coolest charts I've seen. He does this weekly dashboard of the S&P 500 and then each different sector. And so he shows the total year-to-date return.

This is through last week is, you know, 21, 22%. average stock is up 15% this year, and median stock is up 14%. Equal weight's up 13%. So it's a good year. There's usually a bigger gap between the average stock return and the median stock return. I guess especially over the last 10 years when cap weight has dominated equally. That's what I, the median stock return actually surprised me. I thought it would be much lower because our chart kid Matt created this chart where he showed

the top five stocks this year by performance overall in the index are Nvidia, Facebook, Amazon, Apple, and Google. And they count for roughly half the gain in the S&B 500. And NVIDIA accounts for 25% of it itself. So the other $4.95 are like 11%, and then these five companies are 10% or something. Which is pretty wild. But I guess that's how it works. Here's what I was talking about with Y charts, though.

So there are 2,700-ish stocks in the Russell 3,000 now. How many do you think are down on the year? How many of those stocks in a year where the market is up 20%? How many those stocks are down with negative returns so far this year? 18%. You know, I didn't do this. Give me a number. No, sorry, I do have it.

It's higher than that. It's more than 1,000. It's like 1,100, so it's like 40% of the total is down on the year. That's surprising, isn't it? That is surprising. I would guess that in the Ross 1,000, it's lower. Yes, that must be some microcap and small cap names. But there's more stocks down this year.

year that are down 50% or worse than are up 100% or better. The funny thing is, I think that's pretty normal, actually. I think the number is 30 to 40% of stocks are down in a given year on average, even when the stock market itself is up. Yeah. Which is another one of the reasons that stock picking is very hard. Can you imagine if you had a ton of stock picks that were down this year? I probably do, if I'm being honest.

Yeah, I was trying to think about the stocks that I own. Listen, Michael's rule number one, two and three. in a bull market don't on stocks that are going down. That's fair. You said differently. You could try and buy dips in the bull market, I guess, stocks that aren't working. But if you have stocks in your portfolio that are red right now that are down,

it's probably a really good reason for that, and you probably should have done them. It's a general, not specific advice. Buying the dip works better in the markets than individual stocks, at least of late. Well, yeah, of course. All right. Toby Carlyle tweeted something that is a bit of a,

faceblower here. He has a chart showing free cash flow, Fama French data from 1951 to August 2024. And he shows the most expensive versus the cheapest relative long-term performance. And the line goes up and to the right in terms of cheap stocks outperforming, or the cheapest, outperforming the most expensive. So this is top decile versus bottom decile? Yeah. And it goes up and to the right until, what is that, 2014 at peaks. And all of the relative outperformance since, geez, 19803 is gone. And so the drawdown, the relative drawdown of the most expensive versus the cheapest has been unprecedented.

A lot of reasons for this, I certainly think that if you think about, like, what were the effects of QE, I think that this chart is a fair depiction of it. Like, what else could you, what else could you, what else could explain this? Because again, this is not, this is not like growth versus value per se. This is not Apple versus DuPont. This is the most, this is the most expensive versus the cheapest. Have we reached a point where the highest quality companies are just going to be more expensive going forward? But I don't think that, I don't, but I reject that.

premise that the most expensive are also the highest quality. I just, I don't think that's, I don't think that there's a lot of overlap there. Okay. I would have to see the names. That, that's my guess that the tech stocks have been the most expensive. Because if you see any of the S&P X, the top 10 or X tech stocks, it's cheaper. So this is, this is free cash flow. So this, that's, that's a metric. All right. I have to see the stocks in all, but the chart is is pretty insane. I would love to see the names. Oh, actually. So he links to the data. I don't know if the names are in here.

Let's see if we could find it. But wild chart, and I got to know more. I have questions. I got to know more. All right, speaking of charts, Chartkin made a great chart for us showing that since July 10th, that's when tech peaked. So we're not just picking a random date.

The price of tech fell 5%. But the earnings estimates have been revised high by 6.7%. Which is, what do you want to see in a bull marketing consolidation? That's pretty good. stocks are getting cheaper then yeah exactly okay that's a good chart

all right last way we talked about gold and I put one in that Matt created for me by decade so I updated this after our talk and a lot of people said hey idiots Nick Colas told you guys why gold's going up we didn't listen beforehand so we didn't know but he was saying it's all central banks buying more

gold because you can't confiscate it why aren't they all buying Bitcoin huh where's all the central banks buying Bitcoin they don't central bankers don't want to lose their central the central bank of micro strategy is buying a lot of bitcoin that's more to come on that later but so going back to the 70s gold does really well stocks do poorly then stocks do well in the 80s and 90s gold does poorly reversed in the 2000s reverse again in the 2010s this is the only decade of the past five six decades where both of them are doing well so

gold is up 13% per year this century or this decade stocks are up 15% per year End of the decade, which one wins? Stocks. I don't know. What do you expect me to say? I don't know. Yeah, I'm just, true. I'm just asking.

It wouldn't surprise me if it was gold, is all I'm saying. Shocker that you wouldn't be surprised at the outcome of uncertain future. Yeah, that's the point. What would surprise you? Let me hold your feet to the fire. Would anything surprise you? Because this is an opinion show, right? We have to give the audience some opinions, some entertainment.

You can't just be on the fence about everything. Come on, Ben. One of my early bosses in this business told me, it's okay to be surprised. Just don't be surprised that you are surprised. How's that? Huh? Is that good?

I remember that one still. How about this? I have a take here. Everyone keeps worrying about the long end going up, right? Interest rates are rising. This must be bad because it means inflation is coming back and all these bad things. So I had Sean, a research guy, do,

the inverted yield curve when it was like the worst when the invert i think it was in july of 23 so the short end was way higher than the long end this chart is i'm sorry this chart is so pretty it is just aesthetically right it looks beautiful sean did a good job also uh my son had my phone the other day he's seven still he's reading a lot but he's still figuring out like the english language that we always complain about and he goes um seen just texted you. I said, what? He said, your friend's seen. He just texted you. And I said, don't you have any kids in your class name Sean anymore? I don't think that's a name for young kids, so he learned how to spell Sean, S-E-A-N. And I told him, I'm like, you know what, you're right.

Because he said, mean is M-E-A-N. Why wouldn't Sean be seen? Yeah, Sean, the spelling of Sean makes no sense. But yesterday I was, uh, how did this happen? I'm trying to think. So Logan loves nothing else matters, the song from Metallica. Logan's five, and he's a little Munchkin. He's a very, he's a very cute little boy. So we're on YouTube, but I think I saw a video. I can't remember. But anyway, I showed him, I showed him the music video from Nothing else matters. And then I showed him like it in a concert so he could like see that they're real people and there's, there's a whole, all the Metallical concert videos are them in the rain. This one was not in the rain, but I, yeah, I know, yes, there were a lot of this. So anyway,

Logan turned, looked at me and he smiled and he went like this. And I started to like, I just, it was the cutest, sweetest thing ever. I literally was crying. Like, not tears, not teary-eyed. I had tears coming down my face because it was just, it was just so fucking sweet. And he's like, no, what do you do? It was so cute. You're a bigger sapp than I am, even.

I thought I was pretty sappy that you're even bigger sappy. I cry all the time. Back to the yield curve. Okay, so the yield curve is getting more normalized where the long end's coming up. And I think this is actually a healthy development. That, like, the long end of the curve is finally helping out. a little bit and bringing things more into balance. And so people are worried about the fact that rates are going up a little bit.

And I get the worry is, of course, borrowing and mortgages and, but isn't this a good thing? We're getting back into normalcy. Hold on, but you're acting, but it depends. I would, I would like agree with you in a vacuum that, yeah, like you want this. But if the narrative for why rates are going up is true, which we spoke about last week, I don't think it is true, but I, it's not like black or white. You know what I mean? Yes.

But my point is it's okay to look at this side of it too and not just say it's bond vigilantes or the end of the world or inflation is coming back. It doesn't have to be those things. I agree. And also, it hurts if you're someone who's borrowing money. But if you're a fixed income investor, this is way better than the alternative of rates just immediately going back down. True. Right? You just had like the, from your hat, you had the like the Peyton Manning line from your helmet.

Oh, what is this? Oh, that's, that's, that's new sweater. Okay. Good tweet from modest proposal. America Inc. is so big. The neighborhood paint store is worth $90 billion in the Dow. Wait, which company is this? This is one of my, this is one of my companies, Ben.

Sherman Williams? Yeah. You've been, you're on the renovation story? I do own Sherman Williams. I did not realize it's a $90 billion company. Do they pay a good dividend? Are you being paid to wait? I think it's like 2% if I had to guess.

I don't know. I really know. It is funny to think about it in these terms, because I put a few in here. Our favorite corner brito place is worth $80 billion. The coffee place on the corner of every city in America is a $110 billion company. There's an auto part store, AutoZone worth $51 billion. It is crazy when you put it in those terms. I think we've spoken about this in the past that thinking about investing through the lens of market cap is probably cost investors a lot of money. Right? Oh my God. It's a trillion dollar company. you can't talk about the market cap without talking about the fundamentals, obviously. What's the revenue? What's earnings per share? What's the growth? What's the buyback? Right. It would have seemed impossible to have five trillion dollar companies a decade ago even.

And now it's just, it's kind of normal. I remember in 2010, the market had bounced, I don't know, 70, 80% from the lows. And I was, I got like a tax return or something. So I got like five. grand to work with. I'm going to go pick some stocks here. I think the brokerage I invested in doesn't even exist anymore. It was like one of the early zero-free brokerages. And I'm looking at all these stocks and going like, I missed it, you know? I could have bought at the bottom a year ago and it's too late now. That was in 2010. I'm sure every one of those stocks I've looked at are up, I don't know, two-fold since then, three-fold? Oh, that's another type of thing that has cost investors. Countless money over the years. I missed it. Yes. We're looking from the bottom or the

top or whatever. And you know what's interesting about that? It's like, so, all right, so what do you say, Michael? Like, you should just like chase and buy everything and don't matter bad valuation. That's not what I'm saying. But if you zoom out long enough, I guess it is what I'm saying. It always feels like you missed it. True. All right. This is from RBA and at the CAI Association. They wrote about what does a once in a generation invest in an opportunity look like? I'm sorry, what's RBA? Richard Bernstein advice. Yeah. He was on CNBC yesterday. So they talk about some of the biggest generational, like, asset class investments of the past 40, 50 years. So they said international stocks over U.S. stocks from 1967 to 1988, which is a period probably a lot of people don't realize the U.S. underperformed for a long time. U.S. stocks over cash from 1987 to 2000. That's when rates were coming down. Stock market did unbelievable, obviously. Energy stocks over the broad market from 2000 to 2008. So, yeah, energy stocks did really well during the last decade. And then U.S. stocks over cash from 2009 to 2023.

And they have all these good charts here that show these things taking off and how they did. And then they kind of plot them all in the same chart and show the relative gain and then how at the end of it, it reverses. And you get some mean reversion, which is a cool chart. And they basically say, we think rebalancing into anything but large-cap U.S. stocks could be a once-in-a-lifetime opportunity right now. small caps, international value stocks, anything that benefits from inflation. They're saying that global economy is currently undergoing major inflections across inflation rates, globalization, corporate profitability, demographics, government balance sheets. So they're saying all of this confluence of events means now it's a once in a lifetime

opportunity to diversify. Well, listen, if right here, right now in November of 2024, if this is the peak of the U.S. large cap stocks on a relative or absolute base. I wouldn't be surprised. Would you? The hard part here is that we've been saying this for seven years now. That's what makes it so hard. Yeah.

But it felt like a once-in-a-lifetime opportunity for years. No, I wouldn't be. I would be more, no, I'd be more surprised if the U.S. outperforms again so considerably over the next decade. That would surprise me more. Me too. Well, I'm about more. If this continues for another decade, the 8% annual outperformance of whatever it is of U.S. large over pick anything else, yeah, that would surprise me.

I really would. All right. So last week we talked about the election betting whale and people were giving theories about, like, what if this guy is betting any election markets to move them because they're relatively liquid, but he's also making other bets on the peso and different currencies and, well, Well, the Wall Street Journal tracked this guy down. They give him Theo, they say, is a pseudonym. By the way, this polymarket thing, it's built on Ethereum.

Like, this is a blockchain-based betting platform. You can look at the trade. That's how they figure out who this guy was because they tracked the trades, right? I feel like that part of it is like not really being talked about. It's kind of cool. Yes. So they, I mean, we gave this guy too much credit, I think. Because reading the story, it almost doesn't even seem real.

but obviously the Wall Street Journal did their fact-checking here. He says, my intent is just making money. He said he's interested in the polling. He believes that pollsters, there was a shy Trump voter effect. So he says, that's why he voted. That's why he's betting on Trump. And he says, if Harris wins, he could lose most or all of his $30 million, which he described as the majority of his available liquid assets.

Wait, what? I read that. I couldn't. It doesn't seem real. And it also says, like, if he wanted to blow out of his contracts now, he's such a big part of the market that he would crash he would crash the market

if he got worried about it I don't know if he could do some hedging trades or what You can't you don't get $30 million in investable assets by being a dumbass well what if he's a trust fund baby that seems that seems more plausible to me

than him being like some credit Swiss trader well because whether or not the market really was underpriced, who in their right mind would go all in on such a thing? You know what I mean? He might as well go to put it on a roulette wheel, red or black. Right, nobody does this. So I don't know.

This smells a little bit. I'm sorry, I'm not buying it. But if it is real, then it's a fantastic story. Because what are you doing, bro? Even if he's right, this was a terrible decision. This guy accounts for 25% of the, contracts on Trump winning the electoral college, and 40% of the contracts on Trump winning the popular vote.

Oh, he bet on the popular vote, too? See, he could, Trump could win and he could lose the popular vote. Then this guy still loses money? Yeah, I'm not buying it. This guy is not my risk manager. You know, you know something about Mary, where Matt Dillon says to Ben Stiller? That's cute. I don't buy it.

That's cute. That's my reaction to this guy. Sorry. Matt Dillon, underrated. This is from Puck News, sorry you and Josh and I are reading, from William Cohen, and they talked about kind of markets and everything, and it got me thinking, so he says, one long time Wall Street trader worried that deep-pocketed friends of Trump are driving up the DTJ price, which is the truth social spack, I guess, that tied to Trump, to make a victory look

apparent even though the stock market and battleground voting patterns are decidedly different animals. Someone like Elon could be buying the stock, he emailed me. No big deal, money-wise, for him, but the phony strength in DTJ stock gives the impression that Trump, will win. This is obviously speculation, but it is interesting just how, like, the more markets we have and the more stuff you have to bet on, just the more narratives and, like, third order effects people are willing to latch onto. Well, this could be a scenario where the tail really is whacking the dog, right? It seems like it, but then doesn't it all, could it all just come unraveled, though, and be like, oh, we were all looking at totally the wrong thing. Like,

bond yields were doing this and the pace of it in a dollar was doing, like. Well, I think Just from the lens of markets, one of the things that I'm excited to see about the outcome is like, was this, this, these betting marks that we were paying attention to, was the complete noise, right? Or was like, oh, they actually, they were right. The betting markets were right. Yeah. I guess it's hard to say anyone can be right after all this is said and done, because everything is so close. So it's hard to, again, people putting money with their mouth is they can be right or wrong. The predicting markets have been, have shown Trump with a lead for the last couple of weeks.

Yeah, but it's a, it's a very minor lead. And I think that's also, it's also, this is a sample size of one. So just because even if they do get this right, who's to say that they'll get the next one right, right? That's the part of it. We don't, we don't have 100 years of data on this that we can go back through and see or the liquidity. But we are, but we all speak for me at least. I defer to the markets usually, right? About most things.

Like, most of the, for most asset classes, for most securities, the price on the screen, I just give it the benefit of the doubt. So, yeah, I guess that's right. Yeah, but you just read, this guy accounts for 20 to 40, 25 to 40 percent of the liquidity. Like, this guy is moving the, literally moving the market. Very fair, very fair, of course. Okay. So over the years, I think we've, the financial blogosphere has put some arguments to bed.

It's like we've, we've written enough or talked enough about this. We don't need to have this discussion anymore. Index funds is the big one. We all used to write about index funds a lot. Nothing is ever put to bed. ever to put to bed. Okay, true. There's always new people coming along. But I feel like you've tried to put the cape ratio one to bed, the fact that it's not very useful a million times. I think the last piece that I think I wrote about that was like, was it 2018? Like, I'm not writing

about this anymore. But I think we can put politics and investing don't mix to bed. Like if my point is on putting something to bed, it's like there's enough information and talking points out there where if you still don't believe this, then that's on you. Okay. I think I think that the politics. Yeah, I think that has the highest approval rating of everything that we would say is like put to bed. Yes. Among financial professionals, whatever your political affiliation is,

I think most people would say, hey, listen, this is not the thing. Barry's been writing about politics and investing don't mix since when he was at the Washington Post. I put all my blog posts in here that I've written over the years. And there was like 10 of them. Sean can link to him in the show notes. But yeah, my point is like if you're going to say,

here's five stocks to pick if Trump wins or Harris wins and five talks. That line of thinking, if you're still doing that, then that's on you. Well, well, well, well, well, well, no, no, not necessarily. Because the companies, we showed this chart last week, the companies that would be most impacted by Trump tariffs that have been going down in anticipation of a Trump victory, like that's, that's legitimate, as opposed to saying, like, the market's going to do this or that. Here's the thing. Politicians talk a lot, and they don't always follow through. And that's the hard part about trying to tie policy to investing. I can give you the headlines for a year from now about what the policies are and he

still might be right. So it's possible that the markets are over-discounting a Trump victory and what his actual tariff policies would do. Yeah, that's fair. Yeah, that's my point. It's really hard to do. J.P. Morgan had a good one here about like the economy markets tend to farewell under all government configuration. Good chart. We've got a, we've done a whole bunch of charts. I'm sure we'll go through some more on our live stream at the compound too. But that's my whole point. Is that like if you're still, if you're saying the economy, economy is bad because a Democrat or Republican is in office, I'm going to sit out this market and I'm not going to invest. And that's on you. That's my point. But the other thing is,

in defense of those people who feel that way, they feel that way because it's their emotions talking. Right. I think that, like, I think that most people would intuitively understand if you show them the data that, like, the president doesn't really impact the economy of the long run. But people get emotional. So this is from Greg Abbott, the Wall Street Journal. Here's this headline. The next president inherits a remarkable economy. The high quality of recent economic should put a wind at the back of the White House's next occupant. The contrarian in me kind of wants to short this opinion and just say that whoever is in the White House in the next four years

is probably going to face some challenging economic times at some point. Yeah. It almost seems like things have been so good that taking the other side of this would be relatively easy. That's it. I'm trying to, yeah, I have nothing else to say, yeah. Okay. Look at this.

So this is real GDP per capita from Ernie Tedesky. They show the projection and... By the way, great name. It just sounds good. That isn't, yeah, that sounds like a movie character name, right? Come on, Tedeski, get over here, get in my office. Sounds like a broadcaster name, like CBS anchor from the 80s. Yeah.

So they show GDP per capita is, and they did the trendline from January 2020, what the projection was at the time. Obviously, back then, they didn't know anything that would happen from there, but they say it's 3.2% above pre-pandemic expectations, the real GDP per capita. So that's inflation-adjusted, which is just wild to me. So I think the way that I look at it is the president is kind of like parenting. It's way easier for them to screw something up than make it phenomenal.

Right? Like, I don't think you can't make your kid be the greatest person in the world. you could help them be a better person but I think it's way easier as a parent to screw up your child than it is to make them the best person in the world. I think that's the way that's the way that's the way that's the way easier to throw a monkey wrench into the economy and screw things up than it is for them to make it unbelievable.

Fair? Yeah, I agree. Do you think about your parents differently, like now that you're a parent? Oh, all the time. I think about this. I remember my dad when he was the same age as me and it changes my whole worldview of them. Yeah.

I think about that all the time. Same. Yes. Like, yeah, they were okay. Yeah. The passage of time still remains undefeated. All right. I want to talk about Twitter real quick.

I feel like back in the day, Twitter replies, there's always been trolls on Twitter, but back in the day, the trolls that we used to get were, you know, now show Japan. They weren't psychotic, the replies, right? they were, the people might have been like a little bit psychotic,

but the replies themselves were just trolley, not terrible, right? Today now the replies are just so psychotic. And I don't know if they're all bots or what, but this one definitely had me laughing. This is like, so I posted something last week, and I said, listen, unemployment rate is 4%, inflation rate is 2.4%. 10 years at 4 something percent.

Real GDP growth is close to 3. If there is such a sweet, such a thing as a sweet spot, for the economy, we're basically in it right now. No predictions about the future. Nothing about politics there. I just said, if you looked at just those sets of numbers, you would say, oh, yeah, that's a, that's an economy that's humming along and it's in a perfect place. Right? If you had to pick those numbers, could you pick better numbers than that? Not much, right? Did you know this is going to go viral? Probably, right? You know this was provocative. Not like this. I didn't think it like this, though. I just, I was just looking at the data.

And here's the numbers. I didn't make any projections one way and another. Yeah, but you knew how it would be received. Yeah, but the sad part is that it shouldn't be received the way it is, though. Yeah, no, I agree. It's literally just data. So somebody responded to you, just tried to order a breakfast sandwich and have it delivered. Can't leave work. It was $33.

Inflation might not be down. The breakfast place was three blocks from me. And so you did this meme. I replied to him with the private taxi from our burrito meme, which we talked about a couple weeks ago, which is the perfect response, right? Usually, I look at the responses for maybe five minutes, and if it goes viral like this, I mute the conversation because I know it's going to get bad. And then a bunch of other people jumped in and said, wait a minute, I live in New York.

There's no way you got a breakfast sandwich for $33. You know what's funny? This guy, this guy was replying to everybody, right? So I kept following the thread because I was interested. And eventually, far enough down the thread, somebody goes, show me that order. I don't believe you. And he posted the order. and this is just chefs kissed coup de grace the whole shebang bang he said forgot that i was going to

get hash browns so the burrito was 1650 he ordered hash browns which was eight bucks um which is still it's expensive but it's not what he was claiming this total is 2450 and then the delivery fee the service fee the tax and the driver tip yeah we've been on this door dish is crazy expensive for years now But it's just, it's amazing. This person was just complaining and complaining and complaining. And then it's like, oh, I forgot. I ordered hashburns too. It was pretty.

And this is the internet. This is the internet. It's cool to complain. When did it become cool to complain? It is the internet. It's like everything is just yelp. Well, but that's social media, right? You reward virality is for the negative.

And so, and so that's, it's funny. We've been trained by the algorithm to become more negative because the dopamine, hit from having people respond to you reinforces, it's like a death loop of negativity. It rewards bad behavior. It rewards negativity. I just can't believe the amount of people who have just have the brainworms of, I don't trust the data. I don't trust the experts.

I don't trust anything. It's brainworms. It's brainworms from social media. Yeah, it is tough. Anyway, Bill McBride, I posted the chart last week of inflation by decade, comparing like 2020s up to now versus the 2010s, and Bill McBride did this by decade going back to 1970. And the shocking one to me is a couple of them. If you look at the 2020s so far, it's not that far off the trend line from the 1990s inflation, which is pretty surprising.

But the other one is, look at how inflation was in the 80s. The 1980s blew the 2000s out of the water, like way above where it is, and then it kept going up. It's just funny to me how people look at the 80s as this like economic time of nirvana. And inflation was really high in the 80s, but I guess it just wasn't as high as it was in the 70s. You know it's funny? Like, if there were social media,

like obviously the general population if you adjust for social media was way more unhappy about inflation in the 1980s, they just didn't have, they couldn't broadcast it to the world that we couldn't all in real time commiserate. Yeah, so the sentiment indicators maybe were a little

not as bad as they All right, good news on the inflation fund. My auto insurance fell this past six months. Progressive sent me a thing, a lower rate, great benefits just for you. And, yeah, 4%. My policy rate was down. Remember, a lot of people said, Ben, if you keep switching your policy rate, they're just going to jack it up next time.

Guess what? Didn't happen. I have deflation in my auto insurance. How do you like them apples? I love those apples. A lot of people have been telling us about the climate stuff with insurance. You know, you guys aren't talking enough about the litigation. And there was actually an episode of Audits last week

talking about how the litigation in Florida is so bad that all the insurance companies keep getting sued and that's part of the reason that the cost are so much higher and I guess they're making changes to that. So worth the listen if you haven't listened to that one yet. Do you get that catch that one? I did not, but I will. Somebody emailed us.

This is sort of random, but you guys can forever cross off running out of oil from your list of things to worry about. I work for a major truck manufacturer and at a conference today, they said 15 years ago we made 30 million gallons a year of renewable diesel because people had extra soybean oil. they didn't know what to do with. This year, they made six billion gallons.

Whoa. And we could within a decade scale up to the hundred billion. We need to run every truck, tractor, train, boat, an airplane in America. The only reason we don't bother is because traditional oil is so cheap and available. You've seen the meme before about, like, investor guy says, we're running out of natural resources, and then it points an arrow, and it says, some in middle of America finds a reserve of this resource, of this resource, and we have plentiful for decades to come

and it just keeps going in a circle. Okay. I guess that's this meme. Okay. We got an email with the subject line. The deficit doesn't matter. So this person said, I've been listening to the pot for three and a half years

and Michael is always beating this drum when he can. I'd love to hear your thesis on why you hold this to be true rather than taking it as fact every time. 90% of my portfolio was in crypto and crypto-related equity. I'm just, so he said, while Bitcoin's cycle-based performance can be attributed to a variety of things like global liquidity, easy monetary policies, following equities, ripping, et cetera. The LeCore long-term thesis is that money printing does matter.

Frankly, I'm just curious how charts like this could possibly be a nothing burger. He shows a federal debt, total public debt. He's talking about Paul Trudeau-Jones. Maybe you don't agree with the USDA death spiral narrative, but to claim that the deficit will continue to have no impact on the economy and assets is a strong take. Okay. So I don't think that it doesn't matter. I guess I don't think that I know enough about, like, honestly, about how the economy works and how deficits work and how it functions and all that sort of stuff. I guess my thing, if I could boil it down, is that if you were to zoom in on this chart of total public debt, which is up to the right, at any point in time in 1970, in 1980, in 1940, in 1870, like, at any point of time, if you were to zoom in in real time and look backwards, you'd be at the high point, right?

So if you had a chart from 1950 to 1970, you'd be like, oh, my God, this is unsustainable. And then from 1970 to 1990, and then to today, and I understand the steepness accelerated. My point is, if this is your reason for being an extreme position like this person is with crypto, which obviously has worked out okay, and that's been a bad posture. is if uses as a reason to be negative on U.S. equities or to be like a doom and gloomer or a bear, like the debt, the dead, the dead. People have been saying this since the beginning of time. That's my point.

So I'm not smart enough to say this doesn't matter because I frankly don't know. And I think most people that uses this as a reason to be bearish definitely don't know if I don't know. So what's the thesis here? Like what's the catalyst that people are going to reject our treasuries? And if you show this, you have to judge. show assets, like show assets against liabilities, show the total pie of wealth. If this is your chart and this is the hill that you die on and the debt is going to take us down, you're missing everything else.

There was a magazine cover in 1973, and it had Uncle Sam with his hands out and his pockets empty and it said, is the U.S. going broke? And to your point, I think it's okay to say I'm not comfortable with the size of the U.S. debt, but also I don't think it's going to lead to a calamity because here's the things we have going for us in our favor. We can literally print our own currency. And if there is a strike against treasuries, guess what Japan did? They started buying their own bonds.

80% of the government bonds in Japan are being bought by them. You think the Treasury wouldn't do that if we needed to borrow money? Of course they would. And then, so I think the biggest constraint we have is just inflation. That's the biggest risk. I don't think there's going to be some end of days

where people just decide we're not buying treasuries anymore because what's the alternative? Yeah, and it's weird. And that what you just said will piss some people will piss people off in this camp. Yeah, you see, they're just going to buy our debt and it's just going to get worse. And then then it's just the day of reckoning to be even worse. Yeah. No. But it'll be fine. No, no, no. You can literally, you can't compare the U.S. budget to a household budget because we can literally print our own currency. A household cannot do that. Although, well, I'm printing my own currency through HELOC loan. Does that count? It does. You know what Happy Gimmore hits the ball off?

Jaws, the guy in and James Bond, hits it off his foot and Shooter says you got to play the field as the lies. This is the world that you live in. You don't live in an alternate universe where the debt is not what it is. This is the field. Guess what? The debt is going to be higher in the future, but I don't

my whole thing is not that the debt isn't like you can't say you never worry about it. Of course you can worry about it, but I don't think it's going to be this reckoning where all of a sudden there's going to come in time and everyone's going to wise up and go, oh, time for the world to come to an end. I don't think that's going to happen. I'm talking to Colin Row.

I'm going to ask the compound next week, and I'm going to ask them all these kinds of questions. He knows this stuff better than I. He knows a lot better than I. I'm not saying it doesn't matter. I'm just saying, like, if that's your thing and, like, it's enough. Let's move on. New topic for the week in the Google Doc.

You see what I did here? I'm fighting against negativity. See my new topic here? Redditor AI. Good news of the week. Okay, what is it? Good news of the week. Cost of college is going down.

This is from the hill.com. This is surprising. The college board found in-state tuition for public universities down to $11,610 a year compared to $12,140 a decade ago. Colleges come down over the past decade. This is crazy. After grant aid is applied,

the average student would pay $2,480. A decrease from a little more than $4,100 in 2014 to 2015. So the sticker price you see is not what you pay. Ron Lieber wrote a good book about this. For private schools, the net price is a little over $16,000, down from $19,000 back in 2006. So this is the average of what people actually pay, not the sticker prices, but what they pay after all aid is taken into account.

Way lower than you thought, correct? Based on some of the numbers you see. I don't trust it. You don't trust it? They're literally taking the numbers from the colleges. I'm only teasing. That's wild. I know.

All right. Crypto. I got a crypto question for you. So over the last year, Bitcoin is destroying Ethereum. I think I burned this last week, so probably not up to date, but Bitcoin, over the last year, Bitcoin was up 110%. Ethereum is up 46%. You know what else is destroying Ethereum? Salana. Killing it. Price-wise. So I looked at the market cap of this. I think the market cap of Bitcoin to Eath is like 80-20.

And that's probably the long-term average-ish, and it's been going down. Is this surprising to you? Because to me it is. Because I remember in 2017 and 2020, and it's like, Listen, Ethereum is the HTTP of crypto, and you can literally buy the internet, and it's programmable contracts, and it's better than Bitcoin, and look where we are. Bitcoin is still king. Yeah. So, ETH is still, like, four and a half times the size of Solana in terms of, like, market cap.

But in terms of performance, I don't know enough about the space to talk intelligently, but Solana's killing Eith in terms of performance this year. I'm surprised that this is the case that Bitcoin is still like the king of the hill here. Well, Bitcoin is dominating flows. I don't think there's, you know, compared to Bitcoin, eth flows are anemic. And I think that the Bitcoin rally

is probably part Trump related in terms of him being less hardened on the regulatory side. Nah, it's risk on. I'm putting that in a risk-on camp. I don't think this has anything. No, no, dude, no, you're wrong. Bitcoin is a risk-on asset

and the stock market is rocket this year. Listen to me. You're out of your depth. Bitcoin had been acting like shit all year. The regulatory stuff has never mattered for crypto. Ever. Besides the ETS, that's it. There was a point this year when the NASDAQ was up 30% of Bitcoin was flat, zero.

It's not a risk on thing. If this was a risk on thing, Bitcoin went out of sucks shit all year. I think the regulatory stuff is a side show for crypto. People in crypto make a big deal out of it, but I don't think it's that big of a deal. It doesn't matter if it is or it isn't. That's the perception. Like, there was monster flows last week, I think, positioning for a Trump win. Listen, I don't know what, it's hard to know why Bitcoin moves the way it does.

I'm just telling you that if it was merely a risk on thing, Bitcoin would not have been sucking wind all year while the NASDA was going vertical. It's not been sucking wind all year. It's been going crazy this year. Listen, I follow it closer than you do. No offense. It's up 110% over the last year. That's sucking wind? 110%.

All right. You're going to make me do this. Going to Y charts. See, you're believing into the narrative. Dude, I'm not. Everyone is a prisoner of narratives these days. Bitcoin has gone sideways from March until now. Like, it's gone sideways for...

Because it went up so much at the beginning of the year. But the NASDAQ was ripping. It was a risk on market, and Bitcoin was going sideways to down. It's not going up because it's risk All right. That makes no sense to me. Agree to disagree here. No. It was up so much. It was up so much. It had a great run into the ETF. But from March now, it went sideways. How much is a stock market up over the same time? All right. You're making a little minutia detailed here. I'm not. I'm not. Bitcoin, okay, how about this? Dude, you can't say nothing matters. Sometimes things matter. Bitcoin. 100% return matters. Overlay a chart of Bitcoin, of DJT, and of Polymarket.

And they all are moving the same direction. If you think that all three lines move the same direction as a coincidence, then you're delusional. Okay, crypto people think that it matters, but why was it up so much in the first two months of the year? The move of the goal put. Well, because the ETF flows. That's why. Okay, so I would say the ETF flows matter more than what people think about politics. How's that?

No. You can't just, you can't just dismiss. The reason it went sideways is because all the ETF flows got sucked up early. And then there's nothing after that. Not every narrative is bullshit. Yeah, but you're looking at very, this is a toss-up election. And you're saying that that's causing Bitcoin to move. It's perception.

All right. The prediction market. Bitcoin will do fine under a Democrat or Republican. That's what I'm saying. Okay. Complete non-sequitur. I have not talking about anything other than Bitcoin, DJT, and the prediction market are all moving in the same direction over the last couple of weeks.

So I'm just not like, I'm not like grasping at straws here. That's what's happening. Yeah, but over the last couple of weeks. It's, that's a lot of fun in the last year. Yes, yeah. So the election's tomorrow, dude. All right. We're arguing past each other.

New highs again, new all-time highs for housing. Case Schiller, Home Price Index. Are we good now? That's our first fight we've had in a while. I'm over it. Can we make up? All right. Don't go to bed mad at me.

So I feel like every time I post about housing prices at all-time highs Someone must be like, dude, you can't think that having housing prices at all-time highs is a good thing. How is that possible? A little sun there? Duncan must love this. Yeah, I'm in the dark, you're in the light. We are the angel and the devil right now. Hold on.

I have to put the air on. It's boiling here. This sun is blasting on my face. I can see the lines of sun. All right. So every time I talk about housing prices being in all-time highs, being a good thing, because I think that's better on the alternative. People say, no, no, no, you can't look at that as a good thing.

Obviously, people buying homes, it's bad for them. And I agree, but it's kind of like the lesser of two evils thing. I remember living through the housing crash last time. That was not good for anyone. That took the economy down. And I think housing prices being in all-time highs, while not fun for people buying houses, is way better than the alternative of housing prices being down 30%. How's that?

Yeah, I mean, not to, now I'm afraid to push back, but who's saying prices down 30% are better than price that altam highs? People who want to buy a house are saying that. Duncan's probably saying that. Okay, good one from Axios on the age of homebuyers. And they look at repeat buyers, all buyers, and first-time buyers, going back to the early 2000s. And repeat buyers has gone from roughly 40 years old to 61.9. now on average. The average age of all buyers has gone from mid-30s to 56, and first-time buyers has gone from 30 years old to 38 years old. All of these are moving up. I guess is this just

boomers swallowing everything? And young people being pushed out further and further? Well, the repeat buyers, I mean, that makes a lot of sense, right? Yes. They have tons of equity. Yeah. They're moving for retirement, whatever it is. The first-time buyers... That makes sense to me, too. It's gone up a lot in the last couple of years. Yeah, this is... That you'd have to be more established to have a little more money to buy. Life is more expensive than it used to be.

And you know one of the reasons why? Like, sort of... This isn't really true, but like... I'm sort of afraid to say this. But everyone has everything. When everyone has everything, everything's expensive. And of course, not everyone has everything. But my point is, like, a lot of...

of people, they have a house, they have two cars, they want to go on vacation, they want to do this. And if you want to do everything, everything's really expensive. So it makes sense that people are getting married later in life, that you're getting a house later in life, because everything's expensive. You're here. All right, Ben, you're going to love this. This is an article from pensions and investments. KKR sets its sights on 401K plans via target date funds. Okay. KKR reported $624 billion in AUM, up 18% year over year.

They managed $14 billion in its K-series suite of products, which were designed for individual investors, up from $5 billion a year ago. And next, they want to get into target date funds. Thoughts? Honestly, if you're going to invest in private equity in a retail channel, this is probably the best way to do it because it's in a retirement plan that should be illiquid, and you can match it off with it. So I actually don't hate this if you're really wanting to invest in private equity. Yeah, the time horizon works. Well, I just thought you were going to hit the target date aspect of it.

I thought that was safe. It definitely is probably not necessary, but if people are going to want it, that would seem to be actually a reasonable way to do it. We're going to put 5% private equity in all these target. date funds. I guess it kind of makes sense. So Pitchbook puts out a weekly link, a weekly email on all stuff happening like private credit markets and the leverage loan market. So I thought this was interesting. In a sign of today's bullish credit market times, the ranks of U.S. leverage loan weakest link, which is a harbidger of default activity, just hit a two-year low. But as Pitchbook LCD,

Rochelle Cacoris explains, this ostensibly cheery news is largely result of the proliferation of the liability management exercises by distressed issuers. As well, private credit lenders, which have the reputation of being less averse to risk on Wall Street banks, have stepped in to meet the refinancing needs of challenged debt issuers. So this is a very, very interesting story. right? So it's like, oh, wow, the weakest links is at a two-year low in terms of, like, who might default. But it's because these private credit companies, the Apollos of the world, the KKRs of the world, are working more closely with their borrowers to make sure that they don't default, as opposed to the bank loans, which is syndicated, and it's sort of every man and woman from themselves. So let's just get what we can. So again, this is another area where I don't have enough expertise to say this is, this is good. The financial companies would say this is a good thing because look what we can do.

We have the ability to change things if they're not going our way. Yeah. So the ability to like work with a company in periods of distress and be flexible with the covenants and whatever and get them through is probably a good thing. I think the I see the other side of it, which would be like, whoa, whoa, whoa, whoa, whoa. This is going to end badly. You're propping up these zombie companies. So I see that.

So I don't know. I don't know. Do we have a private credit index yet that we can look to? Like, here's the index of private credit. Here's the average across all. That's what I want to see. I want an index of private credit. I don't know.

These loans are just so, they're just so infrequently traded. That's the thing. There's not enough information. That's, I guess they're private. All right, Bain. It's quarter season, and I listened to the micro strategy call, and it was wild. You were slacking us about this the other day, and credit to you for listening to this, because I would have done it. Yeah.

I was watching Sunday Night Football on mute. listening to Michael Ceylon Robbins, like, what are you listening to? I said, go upstairs. So, all right. So the company, the actual software business, which is really a side show, lost $18.5 million in the most recent quarter, which, again, totally irrelevant. I just thought was interesting. So in their deck, they show the Bitcoin holdings since they implement the strategy in the third quarter of 2020. It went from 38,000 up to 250,000 Bitcoin today, kind of wild.

But here's the thing, Ben. They call this intelligent leverage. And they talk about, like, they call it like a, is it a Bitcoin yield? Is that what they call it? So they say that the total Bitcoin has increased 33% year over year, while diluted shares outstanding was only up 13%. So they're issuing shares to buy more Bitcoin. More shares, more Bitcoin, more shares more Bitcoin. So they say our track record, this is from Andrew Kang, who's a CFO.

He said our track record of using equity debt and excess cash to acquire Bitcoin as part of our treasury operations has resulted in value creation for our shareholders and establishes the foundation to execute on our 21, 21 capital plan, which is 21, yes, billion in debt and equity. and that's because it's head trackers got to the galaxy and the number 42, whatever, to buy more Bitcoin. So our objective continues to be to accumulate Bitcoin holdings at a faster rate than we issue shares.

And we have a demonstrated a solid track record of doing so. To assess our performance in achieving this strategic objective, we introduced a new key performance indicator last quarter, which we referred to as BTC yield. We define BTC yield as a period-to-period percentage change in the ratio of our total Bitcoin holdings to our assumed dollar. diluted shares outstanding.

We use this KPI to help assess the achievement of our strategic objective and to evaluate capital allocation decisions. If we increase our total Bitcoin holdings over a given period at a faster pace than we increase our assumed dilated shares outstanding, we achieve a positive BTC yield. And I'm listening to this. And I'm thinking like the, the John Riley, like, what in the world are they fucking talking about. However, for their credit, their stock is going nuts. However, listen, it's working. Okay, so I'm confused. I don't get it. Maybe you don't get it.

And not to be two results oriented. But in this case, I have to tip my cap because they had a plan and they executed out of the plan and it fucking worked. So micro strategy over the last four years, annualizes up 105%. Bitcoin's up 53%, max 7, 28%, 14% for the SP 500. Some more slides from the deck. It's beaten every company

in the S&P 500 since they adopted the Bitcoin strategy by a lot. In 2020, yeah. It's up almost 2,000%. So Michael Saylor said, the more capital we gather, the more powerful we become, and the more we enrich our own shareholders,

it's totally counterintuitive because everybody else in the world thinks if you sell equity, you dilute the shareholders. That's true if you don't have a use of proceeds that grows faster and yields more than the SP 500. The cost of capital is the S&P 500. Later, he says, micro strategy has pioneered this by combining capital markets activity

with Bitcoin as a Treasury Reserve asset with the embrace of BTC yield and the BTC yield shows that, in fact, we acquired the capital in a matter that was accretive to our shareholders as opposed to dilutive. And that means when we're actually engaged in capital markets, we're doing it in an accretive velocity fashion. So it's just, it sounds like a pyramid, a Ponzi on top of a pyramid. It works until it doesn't. It works until Bitcoin crashes, right?

So this is, all right, here's, here's the final word for Michael Saylor for me. He said, Bitcoin is growing 50%. We don't know what it will do in the future. But my personal long-term view is over 21 years, Bitcoin is going to, going to grow, 29% AOR. So that would mean, I did some math here, Ben, that would mean that Bitcoin will be at $14 million a coin and it would have a $281. And I know there's like coins coming to market, so this is not exact. 281 trillion dollar market cap, which sounds like a lot of money. Sounds like, is that more than all the assets in the world? Here's a stance for you.

I don't believe this prediction. There you go. There you go. I'm willing to go out on a limb and say that. I'm guessing that's not going to happen. Yeah, just really fascinating. Like, the largest ATM equity issuance in the history of capital markets is being used by Michael Settled to buy Bitcoin. I would think if Bitcoin grows at 10% per year over the next 21 years, you should be pretty happy. If it just equates long-term stock market averages, I think that would be happy as a crypto person.

It's wild. Really, really fascinating. All right, Ben, somebody sent us this. Primerica household budget index, which is a monthly index illustrating the purchasing power of middle income households with income between 30,000 and 130,000, which seems like a very wide range. But the chart that we're looking at shows that anything over 100 means that households may have extra money left over at the end of the month. They can be applied to things like entertainment, savings, or debt reduction. And the trend is higher, which is a good thing since 2014, up into the right. In 2022, we went all the way.

down to 86% because things were so expensive. Now we've rebounded, and in August, 102%, which is a good thing. It's interesting, it was so low in 2015. That doesn't make any sense to me. I guess people are still recovering from the crisis. Ben, somebody emailed us this photo from their baseball field, and it says, reminders from your child, I'm a kid, it's just a game. My coach is a volunteer.

The officials are human. no college scholarships will be handed out today. I love it. We have signs like this at a lot of our fields, and everyone ignores them. You read the signing, you go, oh, that's great. I'm going to post it on Instagram,

then you yell the rough, right? It's got to be so humility for the spouse of these maniacs. Yes, I always think of that, too. Aren't they embarrassed? Like, do these people go home the next day or that either, like, that was... I think people think they're right.

It's like they assume it's a comment section on the internet. Like, I let them have it. That was my right. All right. Here's one from Gary Rogers, 73 years old in our comments. One year's time is 173rd. That relationship is what causes us to feel that time is speeding up as we age. Duh. It's a short year. Your life each year is a shorter percentage of your overall lifetime. That's what makes it feel like it's going faster. Are you doing the Zach Alfenakis right now? Think about it. I am. I am. You've lived long enough, and then each successive year is a shorter and shorter period of relative time in your whole life.

That's why it feels like it's going faster. Okay. It's hard for my brain to process. There's a lot of fog up there. Okay. So somebody emailed us. There's a homeowner checklist email that goes out every week. Because last week I spoke about like, I don't know that there's all these filters.

How many, so many filters. So I subscribe to this. It's like a weekly reminder like, hey, dumbass, you got to do this. Okay. Let me know when I got to do. If you're like me and your, your, you're, home challenged, for lack of a better phrase, this is for you.

All right. This is why I think you just buy a new house because then you don't have to worry about any stuff for like seven years. Just, eh, it's fine. All right, our dog is teething because she's a puppy. She's like four months old. And I'm not going to name any names.

My wife was watching her yesterday and let her out of her sight for a little bit and she's chewing on stuff because she's teething. And she ate a cord that hooks up our modem to the to the ethernet thing totally it through the cord internet and hollow house goes out and it's like a weird data cord where it's not an ethernet cord but it's kind of like out a phone jack thing i didn't even i didn't know we had this and i couldn't find it anywhere i went to best buy i went to ace hardware radio shack doesn't exist anymore went to walmart no one had it

so this is last night like five at night we're like crap we have no internet uh so i bought it on amazon overnight delivery it was here by four in the morning we ordered at 6 p.m it's at our house by the morning. Plug in the wall. We have internet again in the morning. Amazon delivery is incredible. I order something yesterday came, like, their same day delivery for stuff now. Do you want to know why people complain so much? We have so much convenience in our life that if anything ever rocks the boat and makes our life's inconvenient, we can't believe it. We're up in arms. Yes, this is the whole thing. Things are so good that we have the luxury. Complaining is a luxury. Yes, it is. All right, so Friday night

I go to crack out of a bottle of wine I'm going to put sideways on every couple years I watch sideways have a little glass of red wine I'm a big red wine guy now I go to take... By the way, by the way, who's that guy from Washington that sent this a case of wine?

That is great wine. Yeah, foolhardy vinters. I still, I get it, I'm on their wine club and once a quarter they send me a case of wine. I need to get on that. That's great wine. What's it called? It's so good.

Full hardy vinters. Vinters. My favorite red wine right now. I drink it all the time. So I'm going to, I messed up. I did. the cork thing and I didn't put it in far enough and I go to pull it and I accidentally this and the wine cork breaks and there's two thirds of it came off one third of it's still in there

and I'm trying to get the teeth won't get it the teeth just won't get it and it's getting down and down and down and it's getting down and down and now it's halfway down the stem of the bottle and I'm oh crap and so I go get a screwdriver and I'm slowly but truly tapping it and tapping it and tapping it and as you know to push it in it yeah I'm trying to get it out That's when I'm trying to push it in it because I can't get out. Yeah. And I push it and I push it and finally I give it a good hit and there's pressure. So the thing just literally explodes.

Boom. Out the top. Wine everywhere. In my face, on my shirt, up on the cupboards, all over the wall. And I'm sure there's a way I could Google this. Like, but someone has to have a good, one of our listeners has to have a good way to get the cork out if it gets stuck in there. What's the trick? There has to be a trick.

I don't know. But one time in my waiting days, this couple brought their own body. bottle and it was an expensive bottle and I messed up the I did what you did it I was I panicked I I remember it I was getting very sweaty I was very nervous I was like oh my God oh my God my God I was like guys guys guys I was like some come here broke the cork were they mad to work um I don't remember you know what I got good at as oh as a not just a waiter but being in the service industry for a long time caddy cabanamoid valet parker waiter the list goes on and smiling People's bad jokes.

Ha, ha, ha, ha, ha, right? That makes sense. Yeah. You got to get used to it. I was at the big old place today, the bagel store today. And this is what I call a counter small talk. So the guy behind the counter, obviously this person is a regular, goes, hey, how are you doing? Everything good?

And the guy goes, I'll settle for status quo. Ew. It was just like, that's a cousin of living the dream. Yeah. Right? Yeah. There's a lot of people out there like that. Like, they have those little things, and it's just so uncomfortable.

Like, yeah. Nailed it. Ben, I have a bone to pick with people who say goodbye but don't hang up their phone. Okay. Who, like, they just assume that you're going to hang up. Graham, for example, is guilty of that. I'm pretty sure that happened to you and I last week. I think my phone is in my pocket.

I have my AirPods in, and I look back and there's like six minutes. I think neither of us hung up. No, no, no, no. It was a standoff. No, no, no, no, no. I hang up. I press end. Are you sure?

All right. Because I know there's people out there like you who I have no tolerance to those sort of people. You press by, you hang up. But if the phone is in your bag or in your pocket or something and you're carrying stuff, like sometimes it's hard to do. I guess could you say Siri hang up for me or something? No, no. If your phone is unreachable, you say to the person,

hey, bye, do you mind hanging up because my phone's out of reach? That's what you say. Because why would you just assume that the other person is going to hang out? It's like the, you get the sponge, you know? It's a standoff. I don't know. I'm fine with that. All right, how about this?

If we're ever on the phone, you don't need to ask me, though. That's the thing. I hang up. All right. I swear last week, they did not happen. Duncan asked who talks on the phone in 2024. We're old. We still talk on the phone.

I talk on the phone. All right, Ben, I'm going to start with recommendations. Okay. I saw, oh, before we get to what I saw. So Tom Cruise is running it back. It dates to Thunder sequel. I got to tell you, Days of Thunder is not a good movie. Yeah, you're not going to...

You might be surprised about this. I'm not a fan of Days of Thunder. It was just top gun on wheels, and it was okay. It wasn't like one of my favorites. It's way down the list of Tom Cruise movies for me. Yeah, it's not a good movie. There was an article in Sherwood about horror, about Jason Blum. And over the past decade, the horror movie genre has doubled its ticket to the box office,

now raking about a billion dollars in ticket sales each year. The Cape ratio of horror movies has to be like 36 right now. I feel like I'm shining, Ben, I'm winning, right? They're making movies for me. Yeah, all the time. So Blum said, I think there's a lot of truth to this. He said, horror is the one thing that doesn't work as well on streaming. If you're not forced to sit and stare at a horror movie, it's never a scare.

Horror gets people to the theaters. That makes sense to me. It's just a better experience at a theater's with a horror movie. And it's also, it's cheap. Like, you don't need to pay actors, like brand name actors to be in it. In the article, they actually went into the psychology, which I spoke about last year. Like, why do I like this shit so much? Am I demented?

Yes, I am. So anyway, okay, I went to the theater this week and I saw what is probably my favorite movie of the year that I think should be nominated for Best Picture. Okay. The movie is, it's a neon movie. Neon did long legs. Neon is like an A-24 competitor. The movie's called Enora. And it was amazing.

It felt like uncut gems a little bit It's been described as an uncut gems Which I thought about in the theater I didn't think about the other part The Pretty Woman part Uncut gems and Pretty Woman crossover It's also somehow laugh out loud funny So the premise of the story is

Mikey Madison who was in scream And what else was she in? She's been in a camp What else was she in? Whatever. She plays a stripper And a Russian kid comes into the strip

club. And he starts paying her to be his girlfriend, to be an escort, his girlfriend. And he's a son of a Russian oligarch. And so he's living in the life by himself in a mansion in Brooklyn. And she's his girlfriend. And the Russians come to annul the marriage. And it was so good. Okay. I've never heard of it. I can't possibly raise a bar high enough like then you would be disappointed. But it's not a horror movie. Not a horror movie. No. Okay.

I told you, I'm worried that my son is going to be falling down the Michael rabbit hole of movies as opposed to the Ben because he went as ghostface for Halloween from scream. He hasn't seen any of these screams, right? You can't show him that. No, but I'm going to eventually. He loves that stuff. So what is the right age? So how old is George? He's seven.

He's seven? I'm more liberal about the movies than my wife is sometimes. Like, I don't, I think it's fine. You know what they said? in Tarantino, in Tarantino's book, I can't remember the exact quote, but his parents brought him to movies very young, and he was seeing very adult movies. And I think one of the times he asked his parents, like, are you sure I should be watching these movies? And they said, I would rather have you watch movies than the news. And I think that, because the movies aren't real, is what they

said. Yeah, but I do remember, like, seeing Freddy at a young age, like, it really rocked me. Like, I don't know if, I don't know if in a good way. Like, it's, I remember being scared. So I was very proud of my son the other day because I can't remember what action we were watching, but every action movie, like, especially Indiana Jones, you dive under the wall before it comes down on you to crush you or the door before it shuts. Every action movie has that scene where you dive under and, oh, you just made it. And we see a scene where these guys are running for something,

and he goes, oh, they're going to make it. They always make it in action movies. I'm like, oh, he figured it out. That's pretty good, man. All right, I'm still watching Disclaimer, which I still think you should not watch. But we're on the, we just watched the Penn Ultimate, not second to last episode.

Is that the Shots of Sasha Baron Cohen show? Yes, with Kate Blanchett, and it's a roller coaster show in that it's very frustrating and very annoying, but I really want to know what happens. So I'm like, I hate myself for watching it half the time. The time's like, oh, this is actually pretty good, but I need to watch the end now because I've got to see what happens. Because there's some twist or something coming. All right, we've been watching 90s movies with our kids. It was Mrs. Doubtfire last week, I think we said.

League of Their Own this week. All the kids absolutely loved it. And my wife and I both said, God, they really just. don't make movies like this anymore. No, no. Feel good, family movie, but both people can like it. Gina Davis has to be on the all-time underrated list.

She is just fantastic in that movie. I kind of looked it up, and it said once she hit her 40s, she stopped getting rules, which I don't know why. I think, well, you know, it's Hollywood. Like her... This, yeah, this...

She had Meg Ryan and Julia Roberts and Sandra Bullock. She had a lot of competition. Do you remember the Long Kiss Good Night? Oh, I love that with Samuel Jackson. I saw that one in the theater. Okay, so I saw it. once. I remember seeing it at my dad's house, my dad's apartment, actually. And I haven't seen it in 20 years. No, God, we're all over 50 years. Underrated action movie. Really good. I just, I don't,

this is not a hot take by any means because it's very, a lot of people have it. Like, there's no better actor in a decade than Tom Hanks was in the 90s. He is so unbelievably good in the league of their own. You almost like forget how good he was back in the day. Yeah. Goat. All right Tune in next week If the world doesn't come to an end From the election I told you I'm shorting vol

I hopefully I'm wrong about that I'm hoping cool I was driving by a street corner The other day and a guy had a huge sign And all it said was vote for decency No there was no names There was no it's just vote for decency You know what

That's something I can get behind How's that? I hope people are decent to each other Remember Chicago November 13th, if you're around, check out our live Animal Spirits. AdvisorUnlock.com for more financial advisor stuff. Thanks to production team, as always. Animal Spirits pod at Gmail.

No. Is that it? No. Animal Spirits at the CompoundNews.com. That's it. Goodbye. Thank you.