Animal Spirits Podcast - A Single Push-Up (EP.90)

Episode Date: July 3, 2019

On this week's show we discuss why comedy movies are dying, therapy for social media, lower rates on savings accounts, Amazon as a shipping company, negative yielding debt, context around student loan debt, bank overdraft fees, how many Americans can do one push-up, the best books we've read in a long time 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

So, Ben, you and I are doing a live animal spirits in Scottsdale, Arizona, at Wealthstack. Sources are telling me. Yes. And so this is our second live one. The first time we did it a couple years ago, we did something a little different. And I think we're going to try something different yet similar this time. So it should be fun. Well, what did we do last time?

Last time we did a history. What if Twitter would have existed in prior market environments? So, like, what would J.B. Morgan have tweeted during the panic of 1907? Yes, that was actually pretty good. It didn't really translate well into a recorded version. You had to kind of be there. So if you would like to be there at this one, Scottsdale, Arizona. What are the dates, Michael? September 8th through the 10th. All right. We're going to put a link in our show notes. And there's going to be a discount code as well. So if you Googlewestock.com, it'll work. But go to our websites, a wealth of common sense.com or the irrelevant investor.com. And there's going to be a link.

for a discount code there where you can get $100 off of your tickets. So who's going to be there? Charles Penny from Dynasty, Joe Duran from United Capital, Peter Malook from Creative Planning. Yeah, a lot of the biggest names in the financial advisory, wealth management space. It's going to be pretty big. Yeah, we're excited about it. We just finished the agenda a couple weeks ago.

Yeah, this is going to be a fun event. We hope to see you there. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's 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 Rit Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions.

Clients of Rit Holt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spurts with Michael and Ben. So yesterday, Robin goes to me, hey, here's an article saying that you should drink your coffee. And I'm like, what are you talking about? And she's like, there is something in the New York Times saying that you should drink your coffee and don't worry about how much money you spend on it. So if Robin has found it, it has gone mainstream. See, I told you. It's everywhere.

Did you see that, by the way? Maybe now we've gone too far in that direction. Yeah, maybe people should think twice before spending. three dollars. Yeah, I don't. The gap between like good financial advice and like easy headline financial advice is pretty wide, right? I think so. So yesterday, Robin is like pulling out some letters to put on a board. It was Kobe's first day of camp. And she said something along the lines of I can't believe I'm doing this just for Instagram. And I was like, but you don't care about Instagram? Like you don't really post that often. Like who gives us a show?

it. And it's funny that she said that to me because there was an article in the Times two weeks ago talking about, I think the article was like hashtag honeymoon from hell or something like that, where people have just become so obsessed with showing their, you know, the best 1% of their life. And so I actually put this in the dock and said, like, thank God Bob, it's not like this. Oh. Because I was thinking like how exhausting it must be to be with somebody who is like so obsessed with that. And anyway, thank God she's not, but it was just kind of funny time. I hate to be like a social media snob, but the ones that get me are the people that go all out and they have like 30 followers of friends and family. And they completely go all

out on the Instagram stories every day. And like, I mean, that is like, maybe it's just love of the game. I don't know, but it's, it's so, it's got to be so exhausting. My wife actually deleted Facebook from her life. I don't know, two years ago maybe. And, And I think she just goes on Instagram and Twitter and stuff for the memes. But I know a lot of people who it is like that's just a natural extension of their life now. Yeah. Well, it also got me thinking when I was thinking like, thank God that she's not like that. What a huge pain in the ass I must be.

Oh, because you're always on it. Yeah, because I'm on Twitter all the time. Give and take. Okay. So Derek Thompson, who you always refer to as my boy on this podcast, I think he is one of the better podcasts out there these days. And he does it in seasons. I think it was the third season in his last episode was how is Netflix change entertainment. And you want to know why his...

Well, you know why he's your boy? Because you and I have not even discussed this. I put it in the dock and of course you listen to it. Right. Yeah. Yes, I did, of course. It's very good. And here's why his is good.

So his episodes are like a half hour each. And he does something that's got an interesting topic always, which is usually something technology related. But he presents one side of the argument to sort of make you think this is the way you should be feeling. And then every episode, he goes the other way halfway through and presents the other side. And the conclusion is always kind of in the gray area somewhere in the middle, which is why I like it because his way of thinking is not very biased. He kind of lets you sort through how messy some of these arguments are. Yeah, he's very good. And I didn't know about the blacklist. Did you know about

the blacklist? No. So his last one was how has Netflix changed to entertainment? I never watched the blacklist. Yeah, I never watched the blacklist. It's this thing in Hollywood that I forget the person that started it. But basically all of these really interesting ideas, that never got funded, went on something called the Blacklist. And a lot of the movies and shows that have been on it won Oscars and Emmys, which I thought was really kind of interesting. Yeah. So the idea was, is Netflix sort of changing the way that because they use algorithms to predict what you want to watch. And it's like Amazon where you buy a wallet and Amazon says, hey, would you like to buy 70 more wallets? And that's the kind of thing with Netflix is that

it just pushes you towards things that you're already watching. And so is that going to change the way we view. And then the Netflix response was, well, Netflix only counts for like 10 or 11% of all TV watching, so it's not like it's that big of a deal anyway. But I want to get into this comedy as dead one, because I've got a take on this one. This was surprising. The biggest comedy success at the box office this year at number 18 is Tyler Perry's, how do you pronounce that, a Madia family funeral? Medea. I didn't say it. Medea. Medea. Yeah. So here's what killed comedy. So they're saying that this was a good, the kind of takeaway quote, the shared experience of spending 90 minutes sharing laughs with 500 other people is becoming increasingly a rare one.

And I was trying to think, what is the last comedy you saw in the theater that really, that you really enjoyed? I had to go all the back to the hangover for me, which is like 2009. Confession. I don't do well. You know what? I don't do well with comedies and theaters because I didn't love the hangover in the theater. Oh, my, really? I immediately thought this is the best comedy I've ever seen in my life. I also didn't like Anchorman. Oh, ow. Terrible.

Old takes exposed. I know. I know. Very embarrassing. But the last great movie experience that I had and it was not a comedy was the movie It, the Stephen King clown movie like a year or two ago. The theater was totally packed and people were flipping out. But this is sad because there are so many hangover and an anchorman, notwithstanding.

Seeing and laughing with a group of people makes the. experience so much better. It does. Because if you're like, when you're laughing at loud and cracking up in a theater at home, you would sort of be like chuckling. Oh, you know what? The last comedy that I was belly laughing at was probably Bruno. Okay, that's a bad take if you didn't like Anchorman.

So here's what killed. Stop, stop, stop. Here's what killed superhero movies and in the redoes of other movies have kind of killed comedies. But it's also killed dramas. And the problem is all the dramas have. migrated to streaming. And so dramas make for better eight or ten episode seasons, whereas you can't turn like an

hour and a half Seth Rogen movie into a series in most cases. So I think that's why comedies have kind of died. But I don't view it as this. You know, a lot of people think that it's the PC crowd has killed comedians because they can't say what they want anymore. I don't really buy that one because Netflix is giving all these comedians $20 million to do stand up. And we just had a show like Veep, which I know you didn't watch, which is probably one of

the most over-the-line vulgar comedies that I've seen ever. I mean, they, they were nothing like approaching politically correct comedy. I think it's just that it's really hard to make a good comedy in series form these days. And that's why most of the funny shows these days are actually dromedies, like Barry and Catastrophe and Fleabag. They're kind of funny, but they're also drama-related. So I think that's what's killed comedies is the fact that they don't translate well into series. Yeah, I think, well, Silicon Valley. Yeah. I guess this is an exception. Yeah. I have a question. Were you just referring to your notes? It looks like you were looking at a notebook. Yes, I had some notes on this. I've been thinking about this one. Okay. All right. So are you concerned

Marcus has lowered interest rates on their online savings account from 2.25% to 2.15%? Am I concerned about what? That your savings account is going to be yielding 10 basis points less. Well, they have, I think the report was $46 billion. So 10 basis points on that is a humongous savings. That's $46 million. That's kind of funny that these places are now getting ahead of the Fed. Everyone thinks the Fed is going to lower interest rates soon. I don't understand. Why can't they just do it like at the same time? I don't. That's a good quote. Allied did the same thing. I think it's kind of like, you know how gas stations, if one of them lowers their gas prices by like three cents, all the other gas stations on the street have to do the same thing? I think it's probably kind of like that.

that, especially for the more established firms. And I put this out on Twitter and I had a bunch of people tell me, well, you should move your money to wealth from because they just actually increased their rate. Yeah, for an extra $4 a year. That's the point. Is it really worth it? So I think the $8 trillion sitting in bank accounts that's earning 0.1%, those ones need to move over. But if you get to an account like this, I had a bunch of people ask if they should move.

I think it's really just like you're spinning your tires there if you're trying to find the best savings rate like this. If you have a billion dollars at Marcus, I highly recommend you move it somewhere else. Right. Otherwise, yeah. I said it's, I mean, it's 25 bucks on 10 grand. It's not, it's not going to make much of a difference. They didn't tell you that they were lowering it. They just told you what your new rate was. Yes, I did see that. Very sneaky. Yeah, good marketing. So, Amazon, the new king of shipping, according to this Axios article, this is pretty wild showing share of Amazon shipments by carrier. So, So it used to be 60% of it was the Postal Service in January 2017.

That's been cut in half. An Amazon, which was under 20%, is now up to almost 50%. What do we make of this? Have you noticed lately with Amazon? I know you're just still pretty new to the suburbs. I'm having these rando guys show up in their car to deliver stuff to me from Amazon. Do you get that? Really?

Just like this guy in his Dodge Stratis pulls up and drops off an Amazon box. and then they're now taking pictures of the Amazon box at your door to emailing it to you, saying this was delivered. That part I've been noticing. And because I have a ring, which is also owned by Amazon. Well, I know FedEx dropped out of helping them, but it looks like from this chart, FedEx was never a big part of it anyway. But I have noticed that Amazon has been trading in lockstep with transportation stocks. What does that mean?

Explain to me, this is Michael explains technical analysis to Ben. why do we always have to care about the Dow transports? Can you tell me this? This is a thing that you always see on technical analysis Twitter. Explain this to me. The theory goes that the economy can't be healthy if the gears that make the engine grind aren't lubricated. Hot take is Amazon a transportation company now. Yeah, exactly. But I think Josh maybe five years ago wrote like that semiconductor is the new transport stocks with everything being digital these days. What UPS or FedEx is doing is not necessarily indicative of the overall health of the economy. I think that's probably true. Have you also been getting the one day shipping from Amazon lately? I don't know.

We talked about this. I think so. We talked about this probably four or five weeks ago that Amazon is spending billions on one day shipping and I've been getting it. And it's kind of like they rolled it out without even telling anyone. They, I just, it's so impressive that you order something on Friday night and it's there the next day. Did you see this superhuman email thing? No. Is that like the human centipede? I don't. So Andresen Horowitz led a round of this company called Superhuman. They raised $33 million, companies valued at $260 million. And it is aimed at people who spend three or more hours a day on email.

So the company is trying to help people get to zero on their inbox? It's basically, so I was reading it and it's, I sounded, you know, reading it pretty skeptically, and so was the author. I think it was Kevin Ruse. And they said by the end of it, it was actually pretty cool. Somebody said, was quoted, when you're doing three plus hours of email every day, it's your job. And every single other job is a tool that makes you do it faster. So this is for people that spent a whole lot of time on email.

But three hours a day on email, what happened? Doesn't Slack help solve a lot of those problems? I guess it could just be people who, remember we talked to Ramit a few months ago? And he said he answers like 2,500 emails a day or something. Ah, so this is perfect for him. Rameen, I know you're not listening, but if you are. Okay, so, but they said that the waiting list is 180,000 people on his waiting list. So tell me how it works.

I can't. But there were some features in the article that did sound pretty interesting. So this is like super exclusive. This is for the 1% of 1% of email users. Okay. Yeah. I'm usually, I get my email box to like 10 every day. So this is probably targeted for CEOs.

And speaking of, so two weeks ago, I tweeted that the average CEO listens to 60 podcasts a year or a day, I'm sorry. Obviously it was a joke, or not obviously, because a lot of people didn't think it was a joke. It was a joke on a meme that was going around last year that the average CEO reads 60 books a year. So then the very next day on Instagram, I got that ad from Blinklist or Blinkist, whatever the company is. The average CEO read 60 books a year. And I swear I haven't seen that ad in a long, long, long, long time. So should it be surprising that Instagram is now following us everywhere? Again, not that I necessarily have a problem with that.

So I saw tweet on this last week giving the other side of this saying, you're using the availability bias because you scroll through and just miss all the other ads that aren't targeted to you, but the ones that are, you think that Instagram is following you. Yeah, that's possible. Okay. So there has been some news lately about a French, I think they're an investment bank called New Texas. I forget exactly what's going on, but nothing good.

It's nothing good. And I was reminded of a time probably in 2011 where I, I was introduced to one of their senior people. What do you mean nothing good? I haven't heard this story. I don't know. They're losing billions of dollars in market cap or something like that. Something not great is happening to the company.

Okay. Not important for the story. The point is a family member introduced me to somebody there who's pretty high up to potentially get my foot in the door. Okay. Oh, sorry. They had the fund that blew up and lost billions of dollars. Okay. There you go.

That's what it was. And so the guy. had a phone call with me, asked me what I'm doing. So I told them that I'm trading and I'm studying for the CFA and I'm trying to learn as much as I can. And he goes, come tomorrow to my office and bring your best five stock ideas. One, short Amazon. Two, get long, triple leverage financials, regional banks. Needless to say, my picks did not wow him because I did not hear back from him. So you actually brought in five picks? Yeah, I did.

Okay. And I remember one of them, I think, was like, B.HP, the mining company because they were making the gold medals or all of the Olympic medals. I swear to God, that was my pitch. I can't believe I didn't get the gig. What? I remember saying to him, like, another company that I pitched was how I pronounced Vail, the Brazilian energy company. and he literally went like this, valet, valet. And I was like, oh, you douche.

That was a new will move. Okay. Anyway, so there was a few charts going around last week that the market value of the world's negative yielding debt is now like $12 to $13 trillion. And I still can't quite wrap my head around this. The craziest thing to me is that a lot of these are European countries that in 2010, 2011-ish, we're seeing close to double-digit yields, and so we've round-tripped all the way to these countries are never going to be able to fund anything, to these countries are now borrowing

at negative yields. So I still can't quite wrap my head around it. My initial thought is, isn't this sort of like the anti-risk bubble? If investors are so worried about the safety of their cash or their hold, that they're putting it into stuff that they're paying to hold, I don't get it. I guess I obviously, we're not macro people, so I just, I really don't know. But I would guess that this is like a structural market thing versus like people are really trying to put money in these products and the hopes that they're going to get either a short-term positive price return because rates will continue to go more negative or that they're really willing to pay. I mean, is anybody really holding these bonds for 30 years at a time? No.

I don't know. And a lot of it is probably more short-term. And when I put my idea out on Twitter the other day for Marcus saying it's 2.15%. There was a few European followers who said, I would love to earn 2.15% right now. And then people in India are earning 6% or 7%. Obviously, it's hard to control for everything across countries because of currency fluctuations and all that. So is this like a central banker, central banks have totally turned the world upside down and it'll never be normal again? I mean, I don't know.

But why, obviously, a lot of it comes on to supply and demand. but if you do have negative yielding debt, let's say we ever got there in the U.S. Wouldn't it then make sense to borrow every single cent you can? Binge, binge. Let's do everything. But that's how credit bubbles get started, I guess. And people are worried that the governments aren't going to be able to repay these debts and then we're all eating tuna fish. I don't know.

Well, there's zero borrowing costs on it. Why should they be worried about repaying them? Fair point. Yeah, I don't. It's one of those things. Well, they do have to return the money. Like, could we, is this the kind of thing where in 20 or 30 years, they're writing books about this saying, this is a really wacky? Or is it the case where, well, rates are still low in 30 years and everyone's going, okay, I guess that was the change and this was like the turning point.

This is just a thing now. I don't know. I look at like the long term rate of interest in the U.S. And you go back to like 1900. Schiller's got the data. And it basically goes nowhere for 30 years. Then you have a huge spike for 30 years. And now the last 40 years you have a drop.

And so one of the things that I always laugh at is when people say, well, when we get to a more normalized interest rate environment. And I would like to see on that chart when exactly that was. Were we there for like a year? Two years maybe? It's just the, I don't know. I think interest rates are just one of the hardest things in the world to predict. Do you remember about a year ago, right around this time actually, that Vanguard as part of a restructuring intended to broaden and diversified the fund's mandate and reduce its volatility? The Vanguard precious metals. and mining fund will adopt a new investment strategy, change its benchmark, and be renamed Vanguard Global Capital Cycles Fund. Do you remember that? Sure. Now I do. Yeah, I think I do now. Yeah, we talk about it. And people were like, well, this is the bottom. Oh, for commodities? And gold turns out, kind of was. So how much is it up? Well, gold was around 1,200 bucks an ounce when that happened. Now it's like close to 14. Okay, but if you look at this fund,

okay a year ago it was at $8 a share or sorry year ago is at $9.60 a share today it's at $8 a share so the fund itself is down hey wait can you say what Vanguard should have done what should they have done gone all the goal course well I think this is semantics maybe but I think you can't lump in gold with all the other commodities because I think gold access more of a currency than anything but this was a gold fund it was a gold fund no it was metals and mining It was precious metals in mining. It was like probably 70% gold. And it was probably Newmont and Barrack and the giant gold miners. Okay. Maybe junior silver miners. They should have stayed the course. No one can, I still haven't heard a good explanation. Why are they called junior miners?

Because there are no mines. Who are the senior miners? Newmont and Barrack and Gold Corp. And then, but why are there junior ones? This is like the minor leagues of mining? Because they're just, they're hoping to mine. I think. I don't know. I'm pretty much making this up. Okay. I just like, why aren't there junior consumer staple stocks? Are you getting cute? I just never, I've never understood that. How come the mining companies are the ones who can have juniors and no one else can't?

Like, anyway. All right. So you shared with me this really good student loan debt thread. Who is it from? Logan. And Logan. I can, uh, Logan. I'll take a step.

You want to go? Matashini. Matashimi. We'll put his handle on Twitter. He's a good follow. He does a lot of graphs. And he put some charts on here that I thought were really interesting. So he did the distribution of student loan borrowers by balance. And it breaks it down into like less than 5K, 5 to 10, 10 to 20 and so on. And I crunch some numbers here based on his chart. And again, we'll put all these in the show notes. So 82% of borrowers have less than 50K. Clutch numbers is taking that phrase a little bit, using that liberally. Okay. I added some stuff in Excel. you did arithmetic i did a quick regression analysis okay so 82% of borrowers have less than 50k in debt 12% have 50 to 100 and only 6% have over 100,000 so you hear these stories about people having

tons of student loan debt and there's actually like over 600,000 people who have more than 200,000 but it's i'd love to see a further breakdown of that top 6% where how many of those are law medical students who are going to make more money. Got to be the majority, right? I mean, you feel bad for those people who do have higher debt that took it from a public university or something or a private one that they didn't get a good degree in. But the majority of people have, you know, eight out of ten people have less than 50,000 in debt, which I think is something you can kind of manage as a young person, even though it's not ideal.

50 is a lot. 50 is a lot. 50 is a lot. But I mean, that's it. But did you do the, did you crunch the numbers? on how much was below 25 because it looks like the majority is below 25. Yeah. We'll look to this as the show notes, but I think we've been saying this for a while. It's, yes, you hear the bad stories. It's maybe not as bad as people make it out to be. Okay. Because the averages are being skewed by the huge, large numbers.

Let's look at the next chart. What do you make of this? This was very surprising. Which one are you looking at here? Federal government total financial assets. Okay, that student loans make up 44% of government financial assets. Isn't this kind of messed up? Yeah, maybe that's another side of if they did decide to wipe the books clean. Like what would that do to the government's balance sheet? Interest rates would soar.

Well, that's the other thing. Why don't they just tie these to the federal funds rate or something? Make it much lower. But yeah, I would not have guessed. So then skip the next chart. We'll put this in the chart notes. But go to the chart that shows federal loans to students. Okay.

Why is this a case? was this in the hands of for-profit lenders and then it went to the government? Like, how did this transition happen where there was $4 billion or let's say $8 billion in student loans in 1995? And now it's freaking $1.2 trillion. And this is from the federal government. Why did the, like, what is the reason behind this? So this is showing that the ratio of federal loans to students who are going to college has skyrocketed. No, no, no.

Wait, which chart do you on? I'm looking at the one with the blue line. Yes. This is a ratio? Oh, federal loans to students. Not, okay. Nope. I read that wrong.

You're right. Okay. I mean, part of it is just the fact that there's more people going to college, obviously, but obviously they've, they've. Yeah, but not. This is $8 billion. It's $8 billion to $1.2 trillion. So do you know? I mean, I don't know.

I haven't read the oral history on student loans yet and why the government decided to. This has got to be like a Malcolm Gladwell podcast. Yes. Speaking of which, have you listened to the. new season of his yet? I only listened to the one that you told me about the one with lawyers. That was good. And then the second one is his follow-up on that. You know what my friend said to me in regards to like the law thing? He said one point, though, is that the profession inherently incentivizes speed over accuracy. It's not really an arbitrary

measure. So basically he's talking about, I'm sorry, I should give some background. Malcolm Gladwell is talking about how, in order to take the LSATs, you have to really do it in a very quick amount of time. That's basically the gist of the podcast. He's asking why are standardized tests, why do you have to take them in such a short amount of time if the best thinking happens over a longer time frame? Before you make a judgment, listen to the second episode because he kind of has, he gives both sides of the story. All right. So my friend said, it's not really an arbitrary measure because a lot of what I do requires quick decision making. I don't always have the luxury of time to make important choices. so while he's right that the testing process does reward speed over accuracy, that also reflects

many of the realities of the profession. And why are we talking about Malcolm Gladwell? Just because we were talking about student loans here and taking, I don't know how we got into this. But anyway, it's worth, it's worth watching, listening to the first two episodes of revisionist history, season three, because I thought season two was kind of a drop-off. And the first two on season three were good. And he did have a really good solution for how to make things more equal. So it's just not the top 10 law schools in the country are getting all those, all those, lawyers are the ones going to the best job. So he had a pretty good, pretty good one of that. Another good Twitter thread this week was some Len Kifu, who posed some really good stuff. In 2019 through May, most new home sales since 2007, and might I add my own personal dot, dot, dot, dot.

We know what happened next. Yes. Okay. We've seen this movie before. All right. So Zillow had a really long post. This. This took me like, I didn't get through the whole thing, but I tried. It was a lot of skimming. It was 181 pages. Answer me this, because I didn't look at this. Is this a survey report? Or is this actual numbers?

Okay, because I want to just actually one of these and let you know what you think. I read through your post on this. And it was funny because you slacked me and said, Ben, are you going to write something on this? Because I kind of wanted to do one just to make sure we didn't have any overlap again. So it says just over half, 52% of buyers put down less than 20% on their home. That would mean almost half, 48%. put down 20%.

That actually seemed high to me. That half of all homebuyers are putting down 20%. So it was a survey because 12% say making sure their home has a good next owner is the most important priority. Who? Yeah. Who gives a crap? Yeah. Well, I mean, you want to keep your own house up for, so you can sell it for the highest value, I guess.

But, yeah. Wait, 12% say making sure their home has a good, next owner is the most important priority. Oh, yeah. No, I don't care about that. Yeah. I just thought the down payment one seemed really high to me that almost half of all owners would come up with a 20% down payment. You thought that was high? That seemed pretty high to me. Maybe I'm wrong, but I can't imagine that many people are coming up with 20% with the state of people's finances. So I know we mentioned this earlier, but I just want to revisit this. In terms of the honeymoon hashtag, whatever, there is a counseling psychologist based in New York,

manager of clinical quality at Talk Space, which has a social media dependency program. The problem is, I think I wrote about this before. When you're trying to compete with like the fake lifestyles on social media, like you're competing against something that doesn't even exist. It's just, it's such a hamster wheel thing. Like in the past, like keeping up with the Jones is meant competing with people that you were your co-workers or your peers or your friends or family or whatever and even that was bad but now you're competing against people who are like literally making up their own lives so it's not even real don't you that's kind of wild though that there's literally like imagine checking yourself into a social media dependency program

that actually see that could be a Seth Rogan movie right there yeah that could be that's his next comedy is him having to go to a psychologist because he has a social media dependency But how do you even monitor that? Like, all right, I'm not going to, once a day, once a day. Okay. Did you see this chart from Baird, top five contributing stocks by year? Yes. Pretty cool. 2017 was the big one. How many times have we heard during this run up that it's the biggest stocks are carrying all the weight. And once they, once fang stocks fall, this market, watch out below. But the stock market is market cap weighted. So the biggest stocks are always, almost always going to have the biggest impact. Apple's on here, what? This is 2010 through

2019. Apple's on here six out of nine years. The biggest stocks don't get to be the biggest without the best returns. Yeah, that's like the, that's how market cap weighted indexes. It is a cool chart, though, but that's just how this stuff kind of works. When does Bitcoin get on here? But I'm, all right. So these stats kind of boggle my mind every time I see them. So this is bank overdraft fees. Commercial banks and saving institutions posted nearly $205 billion in net operating revenue over the first three months of the year, which is up 3% from year earlier. More than $65 billion of that income came from non-interest sources, which is to say for the most part fees. And of that $65 billion, $34 billion was overdraft fees.

Man. That is insane that it's that high. And obviously, if you broke that up by every person in a bank, it's probably the average is probably relatively low. But you've got to imagine that those fees are probably being imposed on people who have the least amount of money and are not paying attention to their finances because they're overdrawing their accounts. You know, I'm actually surprised that this isn't like a massive source of drama for the Democrats.

Banking? Right? You would think that this is something to go after. Well, I mean, the other big thing is that there's a huge percentage of the population that literally has no banking. They rely on... I should say the left of the left, like the Bernie and Elizabeth Warren. So someone asked us, someone asked us, what are your thoughts on you? This is for listener questions, but I'll bring it up now.

What are your thoughts on using a credit union instead of a major bank? And honestly, if people have trouble with like overdraft fees and people want to earn more like on their savings, like finding a credit union is actually a really good opportunity. We took our mortgage out a few years ago and it was our first time to use a credit union. And they'll waive any sort of fees that you have. If you take out, if you use a non-bank ATM, they charge you not only a fee at that ATM, but then the bank charges you a fee. But if you use a credit union, most of the times they'll waive those and they'll cover them for you.

But not everybody could use a credit union, right? No. And so we got it because we took out a mortgage and because we actually have a car loan to them. You have to become a member. But if you want to find better rates and get some better service, I think a credit union is a much better option than a big bank. So we have like 3% checking on ours up to $15,000. So we'll see if they lower rates with the Fed too, but there's a lot of, if you look hard enough, you can find a lot better rates and that sort of stuff at a credit union, the Canada Big Bank.

Okay, so we've talked the last couple episodes about fitness. This is my... Wait, wait, wait, wait. How do I look? You've been losing weight? A little bit. You do look a little thinner. Thank you. Getting closer to your natural weight. How much weight have you lost? Three basis points? I don't keep track. Okay. I don't keep track. Okay. I just know that my pants fit me better. That's good. So there's a I wrote about this in my first book. They did this study of prisoners because they wore these, like, big, loose-fitting jumpsuits. A lot of the prisoners, you'd think you'd go into jail and you'd gain a lot of muscle and get

into good shape. But a lot of these prisoners were actually gaining weight. And the reason they didn't know is because all their clothes were so loose-fitting and didn't fit that they couldn't tell that they were gaining weight. Good one, Ben. Hey, thanks, Michael. Okay. So this is kind of like single-variable analysis in stocks.

where the Atlantic tried to figure out what's the best measure of health and is it BMI? Is it all these weird things? And it's kind of, it doesn't make sense to ever look at it this way because they said, if you look at BMI, then that would show the rock is obese or something. So like any single variable analysis is not going to be accurate all the time. But they found that maybe the best predictor of health success in terms of like cardiovascular disease is push-up. So they said the results show a strong association between push-up capacity and decreased

risk of subsequent cardiovascular disease. And the people who did this study estimate that the number of Americans who can do a single push-up is 20 or 30 percent, which that sounds ridiculously loaded. There's no way, right? A single push-up? Wait. One push-up. They think 20 or 30 percent of the country could do that.

That seemed a little on the-low. It's got to be more, right? I mean, and they say it's mostly like practice that you could get yourself up. Wait, obviously, our knee-jerk reaction was that's ridiculous, but- Think about it for a second. One out of five people can do a single push-up. That's it? Let that proverbial sink in.

All right. Maybe it is only one out of five. Wow. I'm going to shed a tear if that's the case. I don't know. All right. Well, I'm happy to report that I have been doing push-ups. I'm now up to four sets of ten.

Okay. On your knees? And let's stick for, actually, we've been talking about March for the Fallant. Not on my knees. How dare you, sir? I have been walking, but I also did nine holes. of golf yesterday, and I'm very sore. From walking?

No, from swinging the golf club. You took a cart? No, I used to push cart. Okay, that's not bad. Because there's only nine holes. Okay. But I'm getting there. All right.

Recently, I was fortunate enough to inherit a nice chunk of two stocks. One is oil stock, one is a big farm memorials aside. My question is whether I should sell them now and plow the cash in my market's account. I don't know. They're down 10 basis points where I am aggressively saving to buy a house the next 12 to 24 months, or I should hold them until actually pull the trigger. So basically, he's got like a one to two year period until buying a house, just came into some money in the form of two stocks.

Sell them now. I got it. I got it. Okay. Sell them right now, parentheses. If they go higher, I'm very sorry. Right. But if you're using this money to buy your house, you absolutely cannot risk it.

So I apologize. It's possible that these two stocks double and you're going to hate my advice. but even if there's a 10% chance or 5% chance or whatever it is that they go down 30% by the time you're going to need the money, you're done. Especially with individual stocks where that like idiosyncratic risk is so high. A 12 to 24 month period is not enough. That's not enough. I wouldn't feel safe banking on those going up.

And how much is it really going like what's going to feel worse? Seeing them drop 30% and being like, man, I wish it would have sold or seeing them rise 30% and having a little bit more money for your payment. Trying to scramble to come up with that money for the down payment if you were already banking on it. Well, both scenarios suck. Both scenarios suck. But I would say that the one where you hold on, you lose money definitely sucks more. Okay. No question. And in my earlier 40s have done wealth saving and been investing for over 10 years. I have a diversified portfolio of ETFs with an 85, 15 split between stocks and bonds. My return over the last five years and 10 years is 6.4% and 6.2% respectively in an annual basis. I have no idea whether this is good, bad, or indifferent,

trying to figure out if I should be more aggressive with my investments. So this is actually a good lesson, I think, because a lot of people, they don't know what their bogey should be or what their benchmark should be. So they look at their performance and they think it's either good, bad, or otherwise, in an absolute basis, but don't really know relatively, like, am I making mistakes? Is everything going well? So I pull up the Vanguard. Vanguard has these force strategies that are static asset allocations, and they're called Lifestyle Growth Funds. And their most aggressive one is like an 80, 20 mix of stocks and bonds. I thought that would be a pretty decent. It's diversified across different types of bonds, and it's the four main total market bond and stock

funds, the U.S. and international. Over the last five years, it's up 6.6%. So right around his number, and over the last 10 years, it's up 10.5%. And he said, this reader said their number is 6.2%. my one area of caution there is that if you're contributing like dollar cost averaging over time that can kind of skew your results so it's not an apples to apples comparison to show a return over 10 years versus what you've been doing since you've been splitting up into chunks but that that's sort of a good way to to compare I think is just use a simple benchmark fund like that could I so how's this person doing over the last five years are basically matching a vanguard fund so my whole thing would be

And again, the Vanguard fund These are index funds So this is a fund of index funds Yeah, so I think that's got to be a good boge Is some Vanguard funds Or a Target date funds, something like that But I think as long as you're not Jumping out of your own funds

And you're not underperforming your own investments I think that's like the worthy goal All right, any recommendations this week? I do have a recommendation, a strong recommendation at that Oh, I got a really strong one too This is strong to quite strong Okay

The book is called One Giant Leap the impossible mission that flew us to the moon and Tadas recommended this to us. He said you guys might want to check this out because we were both big fans, big big fans of Rocket Men. And I'm here to tell you I've got 100 pages left.

This book is just as good. Just as good. Okay. Because that was my favorite book of 2018 or 17, whatever year it came out in, 2018. Okay, so I'm just going to read you a little snippet. In the end,

there were 11 Apollo flights with Cruise, Apollo 7 through 17. those spacecraft and their 33 crew members spent a total of 2,502 hours in flight, 104 days from the moment of launch to the moment of splashdown. Every hour of spaceflight required more than 1 million hours of work on the ground, an astonishing level of preparation. A person who lives to the age of 80 lives 700,000 hours. A person who works until the age of 70, which is a 50-year career, spends 120,000 hours at work.

every hour of spaceflight required the equivalent of the work done in the entire work lives of eight people. Wow. And it was in a short amount of time too, right?

A short period of time. There's one more thing that I thought was very interesting. So there was this person who was the man in charge of the B-29 was this guy, I think he was at MIT,

yes, he was the head of MIT's aeronautical engineering department. His name was Doc Draper. His friends called him Stark. is it possible that he that this person Charles Stark Stark Draper also known as Doc Draper was not only the inspiration to the to Tony Stark of Iron Man but also to Don Draper madman don Draper what do you think I got to read the book I'll let you know it's in my queue is that possible anything is possible I guess anyway big recommend okay are you done because I got a good recommend too I'm done. So on Saturday, I took my dog for a walk.

I was listening to the A16Z podcast, which is the venture capital firm founded by Mark Andreessen and Ben Horowitz. And they were being interviewed by Slack founder, Stuart Butterfield. So it's all these venture capitalists and entrepreneurs interviewing each other. It was like their 10-year anniversary. And Andreessen at the end of it gave his book recommendation. He said the best book he read in the last year is this book called How History Gets Things Wrong by Alex Rosenberg.

And when Andreessen explained it, it was one of those ideas that immediately. I knew it was going to be a good book. So I read it and I probably made through a third of the book this weekend because it was so good. And the whole idea is that history, the only way that history gets like pushed forward is through narrative storytelling. And his whole point is that our like even now this much as this much time has gone by for like big events like World War I, there's still being books written about it and like changes in the narrative. And so the way that we look back at history is. always kind of this false equivalent that people can't take forward to predict the future. So it's a really good book. He had this point that there's been 215 reasons given for the fall

of the Roman Empire. And so how many books do you think have been written about Abraham Lincoln since his death? Give a guess. $3,000. 40,000 books about Abraham Lincoln. And so his point is that each time there's a new book, they try to do this revisionist history thing and tell a better story. And a lot of times, like, the reasons will just kind of never be known for why this stuff happens and trying to extrapolate the past. It's, it's a perfect, it's a perfect analogy for investing, even though it's not an investing book. Another, in that A16 Z podcast is worth listening to as well. So I read the National Bank of Dad by David Owen, which is a book that someone recommended to us when we talked about, like, teaching our kids about money. And it was a

really good book. It was actually an older one, probably 10 or 15 years old. But it was interesting hearing him talk about, like, how much allowance should you give to kids? How should you force them to spend stuff on clothes or get a job? It was just interesting to hear a parent give their own take on this kind of stuff. And he actually disagreed with some of the stuff that was in the Ron Lieber book that we've talked about before. So it's kind of interesting to hear two sides of it. And so that was a good one for those who want to think about how to teach their kids about money. And finally, we made it through five episodes of Dark this past week. There's eight episodes in the new season. And I was a little worried about this one. You gave me a hard

recommend on this one last year. And the first season blew my mind. And it blew my mind so much. I made my wife watch it and I watched it again. And actually, watching it a second time helped a lot. We did the same thing. Yeah. We both did that, I think. And Chris, too, our colleague did that. Because my wife probably like yours saw me watching it. It was like, wait, what is this? Yes. And then I was like, oh. Yeah, it's hard. And so I watched it again. Actually, I'm glad it did because this show is so mind-bending in the second season even worse. I feel like I have a pretzel on my head after I watch it. And we're only five episodes in out of eight.

And the second season picks up right where the first one left off. And it is so freaking good. But the whole time you're going, wait, who are they related to? Whose mom is that or whose aunt is that? And there's new time. I don't want to give it away for people who haven't watched the first season. But don't give up after three or four episodes because it's kind of slow in the first season. And then it gets really good.

in the second season picks up right where left off. And pretty much every episode so far, there's been a twist where you're like, oh, oh, I did not see that coming. If there was a finance version of Dark, Trent Griffin would go forward in time and really beat Charlie Mogher. That's good. So I highly recommend Dark. Start with the first season if you haven't yet.

It takes a while to get used to because there's dubbed voices, and it's a little slow the first three or four episodes. But it goes, and then the second season so far is like, My wife and I are just like, hang on every word. This is like a no phone social media while you're watching show. And that's pretty rare. So that's what I got. Anyway, send us an email, Animal Spiritspot at e-mail.com, and we will talk to you next week.