Animal Spirits Podcast - A Wave of Redemptions (EP. 454)

Episode Date: March 4, 2026

On episode 454 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss the geopolitical impact on markets, inflationary risk, when risk goes off, concentration risk, AI vs. white collar workers, the optimistic case for AI, falling and rising bond yields, inheriting a house from your parents, the private credit crisis of confidence, the loneliness epidemic and more. This episode is sponsored by Nuveen and Janus Hendersen Investors. Learn more about Nuveen by visiting: http://Nuveen.com Learn more about Janus Henderson Investors by visiting: https://www.janushenderson.com/ Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.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

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Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Time is feeling very weird these days. I don't know if that's new or if it's been the...

way for a while. Last week's episode felt like two months ago is where I'm going with this. Is it fair to say that our brains have not evolved enough to handle as much information as we have in news? It's too much. I was, yeah, it's overload. It really is. Okay, where do you want to start?

Let's start with the operate, what is it called? Operation Fury, Epic Fury. What do they call them this? I don't know. That sounds like an Avengers movie to me. Did I make that? No, it's got to be, I don't think I made the whole thing up. I got a question for you before we get into like the nitty-gritty here. My thesis is investors have more or less learned to ignore geopolitical events. Okay, Operation Epic Fury. Yeah, no, I nailed it.

We thought that yesterday. No, but I'm saying, so that seems to be the thing like for the last, I don't know, 10 or 15 years is kind of like, hey, listen, nothing matters. We've learned this. Do you think that's like a Minsky moment problem of events? eventually where there's too much apathy towards headlines and eventually, like, there's going to be panic on the other side of it. Like, oh, this is actually kind of real. Is there? I'm glad you said that, Ben.

Yesterday. So futures were down, not even sharply at the open. I mean, it was like 1%. I think it was really sort of nothing with nothing. But yesterday, so we're taping this pre-market on Tuesday. The VIX closed at 21 yesterday at the low of the day. The S&P 500 was up six basis points. we had 241 advances and 262 decliners.

So nothing with nothing there. Small caps curiously rallied 90 basis points. And I say curiously because, well, large caps didn't rally, but interest rates spiked. Usually not great for smaller companies. The dollar rip, gold was up 1%. Bitcoin was up 5%. So at the end of the day yesterday, it was, yeah, I guess investors are looking past this, which has been historically the right.

move, are these short-term disruptions? Now, obviously, I am economics, right? We're talking about the stock market. We don't do the human side of this on the show that's beyond our scope. No one wants to hear us talk about that, the geopolit politics of this. But just from the market's point of view, at the end of the day, I said, yeah, we felt like, yeah, this makes sense. Because as long as there's not massive disruption to companies' earnings, then why should investors react to the short-term noise? Now, it's Tuesday morning, and a lot of the, say, complacency of yesterday with the benefit of hindsight seems to look foolish this morning.

We'll see where the market's close. But the S&P is down sharply. It is a definite risk off morning today. So maybe the perils of trying to, you know, guess what's going to happen in the next 24 hours on headlines is a fool's errand, obviously. But that is the right move, though. But ignoring the headlines, historically. historically has been the right move.

And even if you get a sell-off, it's overreacting to these types of things, not a smart investment decision. But I think the thing that you said two minutes ago is interesting, because at some point, there likely will be a Jillio political flare-up that might have actual ramifications for... Something's going to matter eventually. The curious part about yesterday's reaction in the market was interest rates.

because typically when you have this sort of risk-off type of news, then people flock to treasuries, bringing yields down, and the opposite happened yesterday because the thinking is that this is going to be some sort of a supply shock, and input prices are going to rise. Yeah, inflation. So yesterday, I think here's a question for you. I think it's why do they call it Brent Oil? Brent is a name they gave people in the 80s.

You know, it was a guy, Brent, he had buck teeth. And he was one day... He had a friend named Brenton College. Yeah, we all knew it, Brent. I don't know. So anyway, it was up 8% yesterday. It surged again. I think it's up 7% or 8% today.

So obviously, one of the big worries is, okay, inflation. That's why rates are up. Because, like you said, supply shock and oil prices higher, across Europe, energy prices are ripping higher. Brent is a total of this guy. Yeah, he's that guy. Hey, there he is. So that's the worry is inflation. So Michael Antonelli sent us this chart of the S&P going back to the 1920. I don't know who this is. I think I can't tell where this came from. But it just shows when war happens. And it's all over the map, of course. There's like a war every two years, essentially, five years, tons of war. I'm going to get to this later in recommendations. But it does just appear, and this is not a novel observation here. This is just something we do as a speech. species. Go to war. So I'm reading this history book, and here's one of the opening chapters. I thought this quote says, the history of the world is sadly not a pretty poem. It offers

little variety and it nearly always, and it is nearly always the unpleasant things that are repeated over and over again. And he was talking about how, like the history of the world, of us, is just people trying to conquer each other, good leaders versus bad leaders. And this is just who we are, I think. I think a lot of people would like to assume, well, we're kind of past that as a more civilized society, but obviously we're not. Like, war is just part of our, I think it's in our DNA. Yeah, unfortunately. The reason why there's been less reactions in the oil market is because the dynamics of how we produce and consume oil has changed dramatically. Yeah, we're energy producers now in the U.S., and that's why this stuff hits places like Europe worse than it hits us.

So I saw their natural gas prices are up 35%. European stocks are getting rocked. I mean, obviously, this is going to impact their earnings. Obviously, the sustainability of it is, you know, how long this lasts, all of that is in question. But there's no doubt there's at least going to be some impact. So Javier Blas tweeted yesterday, if the Brent market closed at current levels up 7.5%, which is about where closed, the one-day percentage increase would rank as the 53rd largest. 53rd. He said U.S. Israel strikes on Iran, killing of the supreme leader, chaos and Hormuz, retaliation across the Middle East. All of that delivers the 53rd largest one-day percent jump.

Yeah. So the Middle East market-wise is not as important as it once was. I guess we're going to test that theory, depending on how long this goes and what the supply shock is. The thing is, this year alone, the S&P has yet to have a 3% decline even, like a 3% drawdown. So if we're going to have a correction, so Exhibit A, chart of the week. So chart kid Matt sent us this. Trading days, the S&P is 500 are stated within 3% of all-time highs. It's been like almost 70 trading days. The S&P has been within 3% of all-time highs. So this is, if we're looking for an excuse for a correction, this is it, right? Investors are selling off some of this stuff. Korean stocks got slammed. They were one of the best performers. To me, this is a, if we're going to rip the band it off and take a little correction, this is, this is a, it's good a reason as any. He's down 1.8% pre-market.

And you're absolutely right. You would think that investors don't, investors never need an excuse to overreact. And it's hard to say that they're overreacting when the market was flat yesterday. We're still within 2% of an all-time high. I mean, complacency is, is- But if you wanted a reason to like, okay, I had some big gains, let's take some profits.

This is a good excuse as any. Yeah. I just, these are the times when the whole, like, uncertainty thing feels higher than usual, right? Mm-hmm. Even though it's always high. And it's just, I feel like now is the time to, like, filter out your sources of information. And the people who tell you exactly how this is going to play out are almost never right.

Those are the people you don't want to listen to. This is going to happen. Then this is going to happen. And then after that, this is going to happen. Those people are never right. People tell you exactly how this is going to play out. That's the only thing I would caution people against. No one knows what's going to happen.

All right, what else we got? So, so I had a piece in here later about. about heading into last week. It's kind of funny. You said it feels like a month. Bloomberg had a piece last week saying that, like, interest rates have just been nose diving all year. And the 10 years almost at 4%.

Bonds were having an unbelievable year, had a good year last year as far as bonds go. And now rates are spiking. Monster rep. I've been... Wait, is this one of those things that, okay, we worry about this war and the supply shock and the strater of Hormuz or whatever?

Josh always makes fun of that thing because people always talk about it. But isn't this just a situation where, well, no, AI matters more than this? What are we talking about here? This is something people worry about for a few weeks, but AI is the thing. And that's deflationary. Right. Is that the Trump card again? Like, oh, nope, sorry.

Good try. Nice try. Your little rate rise for a couple weeks and then AI trumped it again. Is that where we are? That's got to be the base case, no? It's what happens every single time. Seems like it. So yesterday, on Friday.

So on Friday, the 10-year closed at under 4% for the first time in a while. 3-9-5. And back up to 4-10 today. I've been emailing my mortgage guy. On Friday, I think I emailed him a gif of Kramer. You know the Kramer looking at the horse race? Oh, yeah. Come on. Totally got rugged.

That happens. 15 basis points, though, is not like a huge move, obviously. Let's be honest here. If you compress one of the charts, you can make it look at a big move, but that's not that big of them. I think, you're right. It's not that big. It definitely is not. But 15 basis points on sub 4%, it's not nothing either.

I guess the thing, if we're talking about household balance sheets, though, the prospect of rising rates, even if they rise a little, they're not falling anymore, higher inflation. This is not good for consumer sentiment by any means. No, higher gas prices? Yeah. I think a lot of people are probably going, wait, what do we get out of this? Higher gas prices, supply chain shocks. Another war, I don't want to speak from the nation, but I feel like that's generally not popular.

No, because people always say, like, we spent this much more on wars in the Middle East. Like, what did we get out of it? Yeah, there's a lot of that. So, consumer sentiment of this is probably not going to be great. Yeah. All right, this was interesting from S&P Global. They had this thing where they looked at the concentration of stocks in the 1960s, which was a very high concentration. And it was kind of household names, AT&T, and T.

in GM and GE and Sears and Kodak and AT&T and GE were 15% of the market. Crazy, right? So they're showing that we've had this type of concentration before. And now what happened to these companies afterwards? And where are they now? So, yeah, AT&T was almost 10% of the total. Now it's not even in the SEP anymore, which I didn't realize. And so all of these stocks are now less than a percent of the total S&P, which is interesting.

and so it's saying then it shows the opposite how concentrated we are now but where these companies came from JP Morgan Chase was in 1973 they were essentially a zero weight like it's just interesting to see how much change there is and I know people think this is going to last forever

but the point is like it's probably not and things are happening faster and these are moving quicker I tend to still think that's the case but there's been but the turnover at the top has been way lower and how about this? 10 years or so how about this not no no no no these names i think i think if you look at the top market cap names since

2016 or 2017 it's been i don't want to say constant because that's that's something other case but i think there's been less turnover in the top 15 i could be wrong than there has been historically and how about this let's just say that's true it's not true doesn't matter the names that are the top 10 names are almost undoubtedly going to be the top 10 names in two or three years right okay so here's the thing in video wasn't there, Broadcom wasn't there, Tesla wasn't there, JPMorgan wasn't there. Fine. But

take, let's extrapolate two years and assume that Invidia, and these names are still going to be the top 10. I'm not talking two years, though. I'm talking 10 years. No, no, no. But at that point, it will have been well over 10 years with these tech giants at top. Invidia wasn't in the top 10 as recently as 2020. I guess that was longer ago than it seems.

Google, Apple, Amazon, Facebook. You're right. Matt, have those been in the top 10? When did Galloway write his book before? Was that 2015? Like 2017, yeah. That's fair. Do you think that...

2017 was only three years ago on my head, though, so... Right. I saw a chart... I can't remember who posted this. The average lifespan of companies in the S&P 500 is basically at an all-time low. I think that is going to continue. I think there's going to be a ton of turnover

in, say, names, 400 through 500. Okay, that makes sense. Yeah, that was a torsons lock chart, that the turnover in the S&P names and how long they stick around is a lot lower. All right, Ben Johnson tweeted on this week's episode of Life After Mutual Funds, ETF flows have gone to Plaid.

February, by the way, are they making, are they remaking space walls? Or did I make that? Bill Pullman's son is going to be in it. Can I give you a take I gave, I gave Duncan on Asa Compound a few weeks ago, maybe a couple months ago. I've seen spaceballs and enjoyed spaceballs more than Star Wars over the years.

I've gotten more enjoyment out of space balls than Star Wars. I haven't seen space balls in 15 years, but I, oh, that's only because I watched it so many times as a child. Really is great. But is Mel Brooks directing it? He's like 99 years old. I think he is. Okay. All right.

Nobody needs that, but whatever. I'll watch it. Probably not. Nobody needs that as a great tagline for Hollywood these days. Well, you know what? I saw a movie last night. I'll talk, we'll talk about it later in the show. But they're making a Mortal Kombat 2.

They're making Mortal Kombat sequel of the reboot. Okay. The original one in 1990, I don't know, seven, whatever it was. Yeah, 94. Was horrible because what was the guy with the forearms? Oh, I'm going to butcher this guy's name. Ganaka? No.

I can't remember, but I, Barack. No, not Baraka. Baraka was a guy with the razor teeth. Okay. four-armed man, Mortal Kombat. I'm sorry, 99% of the audience cannot give a shit about this. Oh, Goro.

What do I call him Ginnaka? Okay. Gennaka. Was that the math spry? Oh, that's Banaka. I had a friend in middle school who would run Mortal Kombat. He'd put the quarter on the machine

to be like, I'm next, and he would just run it. And the arcade, that was where it was at. Those kids were cool, ones that could just dominate the table. Anyhow, so they did a reboot. And I think I saw this during the pandemic. And the reboot was

so bad, like truly, one of these, like, nobody needs this movie. And they're making a sequel. Sad State of Affairs in Hollywood. They're making a sequel to a horrible reboot. It really is. All right. What had Ben Johnson to say? Ah, yes.

So February isn't even over yet. And investors have already put $328 billion in new money to work in the ETF wrapper this year. That is about 64% ahead of last year's record baking pace. Dang. Continue to be shocked about how much money there is in the system. Somebody emailed us. We got a lot of emails this week, by the way, and appreciate all of them.

So thank you guys. Somebody said one of the theories of why people are just, why society's unhappy in general is you have the lower shape of the K, which is unhappy for obvious reasons, crushed by inflation. And then even people at the upper end of the K, like there's just too much money. There's not enough capacity. Everywhere you go, there's lines.

It doesn't matter how much money you have. The lounge is always full. I thought about this. I took Kobe to the next game over the weekend. And you couldn't, I couldn't move. It's just unbelievable. There is so much money in the system and nobody's happy. I know nobody's a stretch, but, you know, set for effect.

People who can afford to cut the line, they're even more miserable, though. The billionaires, right? Oh, forget about the billionaires. I can't speak for billionaires being miserable. I think that's kind of insane. But when we went to... Have you seen these people tweet? These people are way more miserable than anyone else.

You think Bill Ackman is every billionaire? I don't... I'm not going to say that billionaires are miserable. I don't know any billionaires. Maybe they are. Maybe they aren't. So when I took... When we went to the Bahamas in February,

the line for Clear was almost at the door. And people were, like, bewildered. So Clear is a service that allows you to, like, scan your eyes and it should be theoretically fast. and pre-check, but now everybody has it. So they're going to have to create another thing that's ahead of clear. They need like clear premium or clear plus plus. There's going to be like seven tiers of clear.

Clear was like the thing ahead of pre-check, yeah. Okay. So they get it back to the ETF thing. Isn't this just going to be, our baby boomer is just going to continue to push this forward where like the mutual funds risks, the ETF is just going to get wider because they're selling all their 401k assets and they're rolling them over? Okay, that makes sense.

But don't you think inertia overwhelms that? Like, why would somebody roll over their foreign with K and all of a sudden trade an S&P 500 mutual fund for SPY? True. They wouldn't. So I know for a fact that this is happening because a lot of- How about RMDs? You have to sell something to pay taxes. That instead of spending it, I'm going to put it back in the market.

No, don't, no, RMDs have to come out of your account. Yeah, I'm saying you sell it. Oh, I understand. Okay. Goes into the brokerage. I know people do that. So we know that financial advisors are whacking these mutual funds and getting them into ETFs if it's in a qualified account.

So it's definitely part of the pie, but it's not the whole pie. Anyway, the point is there's just there continues to be a lot of money in the system, and it's obviously distorting things. All right, let's talk about the AI story of the week. This one kind of jumped into like civilian zeitgeist a little bit. I heard from some friends on this. And I heard from some clients on this, the block, the Jack Dorsey thing from Block. Jack Dorsey put out a tweet, and I guess I'm sure they told the employees before, obviously,

but they basically said, hey, listen, we're cutting our staff by 40%. Huge number. And he says, AI is the reason. And now there's two teams on this, okay? One team goes, that's it. It's over. It's done. This is going to happen to every company, get ready for it. And other people, whoa, whoa, whoa, let's provide some context here. And I think that this is going to be the AI theme for as long as we're arguing about this is some people going, every anecdote is going to go, see, I told you,

you white-collar workers are nuked. And other people go, no, no, no, no, way, wait. And my whole thing is, like, strong opinions loosely held on this because I don't think you want to be on a team with this. Because I still don't, am not sure how this is going to work out.

But a lot of people said, and we got an email from someone who works at Block and said, I got laid off today. This sucks. And so the head games you hit with yourself there is, wait, what if this, was really AI. What if my career is screwed? Right? That to go along with getting laid off, like getting laid off is never a fun process obviously. But if you're, if you're having that

thought in your head, like, what if I'm not going to be able to find another job that I want to? Like, that is the thing that has to screw with you. And a lot of people said, no, no, no, no, no, Jack is making an excuse. This is ridiculous. This company overhired so much during the first couple years of the pandemic. This is them right-sizing the ship. Here's my take. I thought Miles put it best. Miles Obedin tweeted, so many things that appear to be about AI are actually about the pandemic economy.

Yes. Thank you. Steve Krell Giff. So I think he's 100% correct. I think that the market's reaction to this up 25% immediately in the after hours sucks. That was the hard part for a lot of people. It's like, oh, gosh.

I don't think the reason necessarily. severally matters. I think context is important. But does anybody who's laid off feel better because this is a pandemic story? Does anybody who's under who's feeling anxious right now feel better because this is a correction for the pandemic hiring? It doesn't matter. And unfortunately, companies are going to use this as cover because look at how the market is reacting. I thought that Jack was smart to rip off the bandaid because a consecutive series of cuts just destroys morale, obviously. Yeah, they wanted to go big.

But here's the thing, too. The context is, this is a company that crashed 80% in 2022. It doesn't matter. It's not recovered at all. I'm saying they needed to do something. The stock price got smoked. Right, right.

And- So there's an account restructuring. He tweeted, in case you need confirmation that AI is the ultimate excuse to cut costs. Yes. So, rumor, UBS to phase out meal stipend in Q4,

2026. why because AI doesn't need to eat. And a lot of people also said, listen, there was a story in the Wall Street Journal that I forgot, I totally forgot that Block bought title from Jay-Z, which was, has anyone in the history of music ever used that service? They threw like a $60 million party that people are, so people are saying, people are questioning his bona fides as CEO,

like saying he screwed up because they went from pre-pandemic, they had 4,000 employees, and they went all the way to over 12,000, 13,000. in the matter of years. So like, hey, this is right-sizing the ship. Obviously, again, you're right. That doesn't help anything. But the context, I think, is necessary here.

And- But what do we do when there's, like, four more of these? There are going to be four more of these. You don't think that they're coming? Of course. Look what the stock did. The investors said, the markets are a cold, cold place.

Investors cheered misery. The stock market is always heartless, though, like this. I know. A CEO gets fired and the stock jumps 10% or stuff. Like, the stock market is heartless. And you're right. There are going to be times when it's like the profit margins matter more than the people. But these anecdotes, I'm going to have to wait until I see it in the productivity data or I see it in the unemployment rate really rising.

You can't just give me anecdotes and say, this is it. This is the end. I'm not going to believe that until I see in the data. Yeah. It feels like last week, a lot of, last week was peak fear. in the short term for software is dead. It was the Satrini bottom, and I'm definitely not, like, I don't say that to poke fun.

I thought he did it. He actually did a public service with this pose, which we spoke about last week. Public service, come on. Everything they wrote is going to be wrong. That's not a public service. That's scare tactic. I don't think so.

They're not a scare tactic shop. Like, that's not their MO. Public service might be strong. Well, for that piece. I've never read any other than, research. That piece to me was a scare piece. There's a third of scare piece. I mean, of course it was a scare piece. It scared the shit of people. I don't think it was like, I don't think the intent was, in fact, he said on Joe and Tracy's

podcast, if I knew that it was going to go mega viral, I wouldn't have named any individual stocks. That's true. You don't, you don't know how many of these pieces are going to go viral. That's fair. Yeah. How would he have known? Anyhow, I think, I think the market has since settled down a little bit into it yesterday, which is arguably, is there any company that is more, exposed to AI on the software side. So Intuit is TurboTax and MailChimp and Credit Karma, and there's one other big brand that they have. And Intuit was up 17% of the last five days.

Now, is it, I mean, obviously that was A bottom. Whether or not this is the bottom for the software stocks, probably not, doesn't matter. Yeah. Well, that's another, but the company was also down 50%. So that bounce was coming. So Citadel wrote a response to this trinity piece, and they shared this job postings for software engineers,

and people go, oh, my gosh, job postings for software engineers are rising. And then other people go, no, no, no, wait. Look at, zoom out a little bit and look at the hiring. But the data on Fred for software engineers only goes back to 2020. So there was this massive overhiring of software engineers for two years. And then now there's a, so neither of these things are normal. Yeah. Right?

That's the hard part about the context here, is you're right. Miles' idea that the pandemic were still working stuff off. That is very true. I am a big believer there. All right. So I listen to Mark Andresen on this Lenny's newsletter. I've never heard of this podcast before. But this is the kind of thing.

This was probably the most bullish, like optimistic glass-safel take on AI. Market is open. Holy shit. International stocks are down 4%. Oof. Ifa's down 4% of the open. That is a big. drop. Vix is at 26. Wow. Emerging markets are down 5.6%. Holy shit. That's a big one.

So this decade alone to me seems like another reason for Europe to like loosen the purse strings and be like, we have to get, we can't just keep relying on this. Silver's down 9% again. Unbelievable moves. Wow. Okay. Never a dull moment. Wait, I hear the geese. Is that the geese? Yes. The dogs didn't work. The geese. The geese. migrated back. It sounds like somebody on a bench that's like squeaking. You know what I mean? Like somebody rocking on a bench?

They just squawk at each other all day. The kiddie and geese are the worst. Absolute worst. I wish I had a hunting license to just out of my window. Just take them all out. They're the worst. All right. So all the negative pieces go mega viral.

And Mark Andreessen was on this podcast like a month ago. And I didn't hear one person talk about it. Oh, that was a month ago? It was at the end of January. And so I finally someone had shared it and said, hey, listen to this. And it's the most, he should be the spokesperson for AI because it's the most optimistic tape. He's saying it's not utopia of like Star Trek and everything's going to be figured out and no one's going to work. But it's not dystopia either, where no one has a job.

And he talks about how like if we do get this really high productivity growth that people are worried about, like and it's going to put people out of jobs, like that is, that means like lower prices and it's not going to cost us, like that like Nirvana period of AI is going to cost so much abundance and productivity growth, no one's going to have to work it. Everyone's out of a job. I think this, the obvious not to belabor the scary part, though. It's just the speed. Because in previous technological revolutions, it took time. Yeah, this stuff is, you're right, this stuff is happening fast. But the speed at which the labor market has changed has not happened yet. That people are still extrapolating. That's the problem.

That's true. Hold on. Just put a pin in a mark for a second. Because we got a few emails like this, where people are saying that they, tried AI and it didn't work and they went back to humans or their friend, their spouse works at a company that has implemented AI and it's a shit show and they're trying to unravel it. And therefore, you know, it's overblown, like sort of don't worry. This is all nonsense. No, no, no. The pace at which these things are improving, it's not like the product that didn't work today

is just like, okay, I guess it doesn't work. it's moving so fast and you like just the speed at which these things are getting better so I think there's a lot of people that are like taking false comfort in the fact that they're that these models maybe aren't like able to do everything yeah we get emails from people every week being like you guys are don't hear talking about AI is not going to be a genius like

you're right the this is the worst it's going to be is is absolutely true I think you can't take that I take both extremes off the table I don't like people who have the extremes of like, oh, this is going to be nothing. You can't have that mindset either. But Andresen made the point that I was kind of trying to make about, he's saying this is all happening in the face of declining population growth. Human workers in the next 10, 20, 30 years are going to be at more and more of a premium. If you combine declining population with less immigration, the remaining human workers are going to be at a premium, not a discount. So again, his is a very optimistic take.

But I like his, what did he say? It's the tasks that get disrupted, not necessarily the jobs all the time. Yes, that was a great take. And I hope that's right. And he gave the example of a secretary that used to type up every single memo and every message for an executive. And now the executive literally does all the typing themselves in email. But the secretary is still as a job. They just do different tasks now.

And that's what he was saying is going to happen most likely to many people, is that you just become more efficient and more work. And I tend to be on his side of things, his optimistic lean about what this is going to mean. I hope he's right. Do you think anything you said was too optimistic? I think that part was a little, was, I think there's a lot of truth, but it might be overly optimistic. Put it this way. I don't know that I feel a whole lot better than I did a week ago, to be honest.

The interesting thing to me is that if you listen to economists, they are very like, they're very, and they're in the books and in the weeds, they're very level-headed about this. And I thought Andresen's take was very economist. So Paul Krugman wrote, this treaty post argued that investors and workers hurt by AI will cut their spending, which they will. But if AI delivers big productivity gains, it will reduce prices and raise real incomes in sectors that aren't displaced, causing other Americans to spend more. There's no reason to believe that disrupting part of the economy will reduce overall demand. That part, that part to me rings true. And so I guess if there is continued growth and more spending, more spending has to be good for somebody. It can't just be like AI's gain.

Right. There are companies that absorb the spending. Yes, exactly. Again, for the people who get displaced, that's not very much comfort. But the whole AI is going to wreck the economy. I think that economists as a whole seem to not really believe that. Maybe their assumptions are way too simple, too. So that's going to be the theme, in my opinion, for the next decade.

The macro versus the micro. Yeah. Yeah. And the micro stories are going to win out. Greg Gap at the Wall Street Journal says, if such a revolution were upon us, we should see some sign of it. We don't, at least not yet. The ranks of software developers widely assumed to be acutely vulnerable to AI are up 5% in January

from a year earlier, a pace largely consistent with past 23 years. So the thing is, we're seeing anecdotes. We're seeing anecdotes. But if you look at the aggregate data of the labor force, we're not seeing big changes yet from AI. We're just not. What do you mean the, well, yeah, give it a minute. It's early.

What do you mean the micro data is going to win out? I mean, people are going to look at these individual stories and latch onto those as opposed to the macro overall data. And I'm saying, I'm going to wait until I see it in the macro data to have an overreaction here. I'm not going to overreact to it until I see it in the data. What's coming on the micro macro front might make the vibe session look like a walk in the park in terms of like the divide between the data and the vibes. Because you know the reporters are only going to interview people that have been displaced.

There's not going to be any positive articles about the societal benefits. No, if you're using AI to make your job better, no news reporters are going to care about that. Right. It's just going to happen. I thought this was interesting. This is from old rope research. It asked why is H&R Block still doing so many tax returns? If TurboTax exists, why are people still hiring people to do their taxes? H&R. Bach prepares tax returns and offers auxiliary services to clients 10,000 retail locations. And they've been doing around 20 million tax returns per year for 25 years despite stiff competition from TurboTax and the federal government, which now has like this easy system that was implemented in 2017.

No real growth in numbers, but still the whole tax prep ecosystem seems to a permanent class of 20 million people who demand H&R block services with revenue per return, cajuring at 2.7% per year for 23 years. Did you say cajuring? That was in the, that's what he wrote. Cagering? Wait. Oh. Kegering.

Okay. But it's just saying that like for some reason, some of these. businesses, it feels like they should be disrupted and they haven't. And I think that's going to be the surprise with AI is the businesses that don't get disrupted. I don't think people are thinking through which businesses won't get disrupted. Okay, can I give a simple example of AI being cool? Yes. So my kids, my twins are in third grade and they do this math thing where it's a timed math question and they do multiplication. So it's twos, threes, fours, all the up to 12s, right? Three times two, three times four. It's the same. And you get 60 seconds to

complete it. And if they complete the level, they go up to the next level. And so they're very competitive. So if they don't pass one of them one week, they come home and they work on it and they practice, which is kind of cool to see. So then they go to division. And they're like, ah, division's harder than multiplication. I got it. And so I went to Claude and I said, make me a 10 question quiz for each of these numbers. Because I tried to do it on my iPad. And it was like, you have to pay $9.99 a month for this math thing. Like, oh, that's stupid. So I asked Claude create this for me. And Claude created it

and, like, if they passed the quiz, all this confetti rained and stuff. And it's just this little stupid thing. And it was awesome because now they have one for, I say, okay, do this for the next one. And then it didn't work one time. I said it didn't work, fix. And then it fixed it immediately. That kind of just small little

thing. It's really cool. I hit my limit on Claude yesterday. Because I was only paying $20 a month. and I couldn't have hit $100 faster. Like, without any hesitation, I don't, I don't think there's a hundred, I don't think I pay $100 for anything other than, like, internet, right?

Any, like, sort of monthly service? That's not true. Phone bills or whatever, but, but anyway, my point is, it was not even a split-second decision. I was like, all right, I need more. I am diversified. I'm using Claude and Gemini in chat now.

And I, for some reason, I just know which ones I want to use for which, and I'm not, I'm using them all. Email. You mentioned Star Trek earlier in the show. Watching the episode this week, I realized what it would help, I realize what would help Michael not be so down about AI is if he had been a Star Trek fan.

He would realize that AI and computers doing every menial task isn't a nightmare, but is actually the world of Star Trek. People don't have jobs in the show because they need money. There is no money. They have jobs if it's something they are passionate, about and it helps to advance humanity. Okay. Still not watching Star Trek, but...

That's the abundance. All right. I just, I reject the whole argument of the abundance for four-day work week. What would you do with, what would you do with your time? People do not want abundance. No. And again, we would have to have some sort of UBI or like, yeah, I don't see... I could hear, I could hear people pushing back like, yeah, must be nice that you actually

like your job. I get it. Not everybody likes their job. The question is, could we have this for 5 to 10% of the labor force that gets displaced? That they're going to have to have some sort of UBI. Is that possible? That is such a political lightning rod. I don't know.

Yeah. That's the thing people are thinking about. All right, let's talk real estate. California, I think, is the most broken housing market in the country. This is from the Wall Street Journal. In California, about the only way to get a house is to an... inherit one. 18% of all property transfers in the state last year representing nearly 60,000 homes were made through inheritance. That is a record in California. It's double the national average,

which is 8.8%. So they're showing that this number of inheritances is just rising every single year. And they had these stories of these people saying, hey, the parents bought a house for 150,000 back in 1990, and now their kids are just waiting for them to die so they can take over their house, and that's the only way they're going to own a house. And they're saying the big part of it is the property tax thing. So that Prop 13, where they capped how much property taxes can increase by, that just makes it so much harder for new buyers who have much higher market valuations and much higher taxes to pay. And you see this in a lot of states. Michigan announced this recently, that they're trying to cap or reduce property taxes that baby boomers

pay. And this is going to be way more generational warfare if they keep trying to do this stuff. Baby boom we're saying, listen, we don't have kids in school anymore. Why should we have to pay the taxes for it? Oh, boy. Anyway. This whole inheritance thing with housing is going to be a thing in the future, though. This is going to be a big thing.

I wonder what people are going to do with the homes that they inherit. That's the question. Right. I would assume most sell, maybe if you live there. That's because you get the step-up basis and costs so you don't have to worry about paying taxes. It's going to be a big story for decades to come. You're right.

do kids want to live in their parents' house? Tell those keys to shut up. Go throw a rock at them. Unbelievable. Send your dog over here to bark at them, please. My dog wouldn't help much. God. All right.

You have been talking about the private equity firms for a while now. And you were bullish, I don't know, 18 months ago, because of the coming wave of wealth management. And the worry now is, okay, this is going to stop or come to a halt or people are going to take a breath. And these stocks are getting crushed. Bluil is down 60%. This is from bespoke.

KKR is down almost 50%. Ares is down over 40%. Blackstone is down over 40%. So Blackstone is down another 8% today. Woof. I own the stock and I will be selling it today. And I will say, we'll get into the story in a second. I would say that this sale that I'm going to be making today

is probably going to look stupid. in, I don't know, if it's a year, two years, three years, I don't care. There are, there are, there are stocks that you are comfortable holding for a long time. And for me, I have no interest in finding this tape. So I'm down, I'm down 13% of the stock and I'm going to take a loss today. So I think with the market as a whole, you never wait for the dust to settle. You don't wait for the dust to settle to invest. I feel like with stocks like this, this is, it's okay to wait for the dust to settle a little bit.

Yeah. Is that fair? just clarify. So this pile of money that I've been talking about with like stocks and I'm training stuff, this is, this is not like my buy and hold account. This is more of a high, right? So, so I'm not looking to now like I last week, I said Netflix. I'm buying and holding that name because I was comfortable with whatever the outcome was, not to brag, which we'll get to then a sec. This is not one of those names. So I think that, I think that, listen, selling Blackstone is going to look foolish in hindsight, but I was, I was wrong. So here's the story. Hang on, Blackstone fell almost

40% during the Liberation Day sell-off last year, recovered almost all of that loss, and is now 20% below the lows of Liberation Day. Wow. This is a legitimate crash. Hell yeah, it is. So the story is... All right, so it's a multi-pronged story.

I might have said this last week, so I won't believe it to the point. Every headline that comes out about private credit is terrible these days. Yeah. So private credit started to decline. I don't know what it peaked. A year or two ago,

the reason why is because these things have floating rates, which is what made them so attractive in 2022. When the rate hiking cycle stopped and rates are coming down, investors are getting less, less reward, okay, for every same unit of risk because they're getting lower distributions. So that had already been weighing on these instruments to begin with. And then it was the cockroach stuff that spooked the market a little bit. even though we saw no credit distress, like that part of it did blow over in the sense that there

wasn't a sort of market contagion. Any of the, now maybe it'll come out in a year or two, I have no idea. But the first brands tricolor stuff, that sort of stuff didn't spread, but it didn't help sentiment. And then the nail in the coffin was software. And that's the part of it that I didn't see coming, obviously, that made my thesis 100% wrong. Because B-Cred, for example, 26% of the portfolio is in software stocks.

Now, if you look at the equity, I know these are senior secure, like first lien debt type of instruments. But if you think about the equity of the mega-cap stocks that are down 60%, what do you think the equity is down on these middle market companies that are doing $300 million in earnings? Right. 90%. So, again, there's no. So the fundamentals of these portfolios look good today. Investors don't care about today.

So the story broke yesterday from the FTA that Blackstone's flagship private credit fund was hit with $1.7 billion of net outflows over the past month. It's an $82 billion fund. So it's 8% of the assets wanted their money back. What was interesting to me is that they had $2 billion of new money come in in the first quarter, $3.7 billion of redemptions. I'm guessing almost all of that $2 billion happened in the first half of the quarter. There's no way that anybody is allocating today.

So that number is going to be even worse in the second quarter. Now, what's interesting is that Blackstone paid out the redemptions in full. So 5% of the money wanted back. They gave it back. So they didn't gate it or anything like that. They didn't gate it. But they even gave back 7%. So they honored all the redemption requirements.

How did they do that? The firm and its employees invested $400 million to help cover the request, which is interesting. I think that's a sign of confidence. Again, I think that I think that... It's also one of those things that's not repeatable every time there's a big redemption request, though. That's the problem. So the point, like, so why am I selling this stock that's crashing?

Because who, like, I'm not interested in getting married to the stock. Who knows how bad it's going to get? I don't care if it's going to be higher in two years. If it's going to be down 20% from where I bought it, I'm not interested in taking a 30% loss. You understand? Anyway, I was obviously wrong on that one. Cut your losers short, right?

That what they say? Well, yeah, I bought this to make money, and I'm not making money. So that's trading. All right, let me play. It's going to be interesting to see what happens to this space for the first time in, you know, however long,

where money is not just poor. lowering in. Now, okay, actually, you know, this is a very important point to make. The fee-related earnings are going to be relatively stable, very stable, because the nature of this vehicle. So what's so interesting is that we're talking about, like, these private funds and the structure that is causing the problem because people are like, well, I want to get my money up before everybody else does, right?

That's actually helping, that's saving the investors. If this was like publicly listed, the thing would be getting mauled. Right. Oh, yeah. Right? The thing would be absolutely getting mauled and making the big assumption

that there is not catastrophe waiting in the portfolio, the investors that are not allowed to get their money back will in all likelihood be better served in the long run. You can't panic. Even if they're not necessarily happy. Yeah, you might be pissed off, but you might be better served in the long run.

All right, let me play, let me play something for you. We're talking about prediction markets now. This is from Mike Seelig. He is the chairman of the CFTC. This was February 17th. CFTC Chairman Mike Sealing here. Over the past year, American prediction markets have been hit with an onslaught of state-led litigation.

In response, the CFDC has today filed a friend of the court brief to defend its exclusive jurisdiction over these derivative markets. Prediction markets aren't new. The CFDC has regulated these markets. for over two decades. They provide useful functions for society by allowing everyday Americans to hedge commercial risks

like increases in temperature. Hold on, let me play that black piece. Useful functions for society by allowing everyday Americans to hedge commercial risks like increases in temperature and energy price spikes. They also serve as an important check on...

I can't anymore. Okay. Did he just say they allow everyday Americans to hedge their risk with a straight face? So, all right, the governor of Utah quote tweeted this and said, Mike, I appreciate you attempting this with a straight face. But I don't remember the CFTC having authority over the derivative market of LeBron James rebounds. These prediction markets who are breathlessly defending are gambling, pure and simple.

They are destroying the lives of families of countless Americans, especially young men. They have no place in Utah. Okay. Prediction markets are... Because the state thing, there's still a lot of states you can't do draft kings or fan dueling, right? You can't bet on sports legally yet? Do you think, can we say with a straight face that people that can't get insurance in Florida are going to be using the prediction markets to insure themselves or hedge the risk?

Of course not. Because I know it doesn't sound like the dumbest thing in the world, like the idea, but also the idea that it's actually going to happen, that there are actually people who are uninsurable that are going to be aware of and have the means to properly hedge out the risk, what planet are these people are? Right. Or if you were worried about higher gas prices from a war in the Middle East, you bet an energy contract as an insurance every month or so, and it finally spikes or something because

energy prices rise. Like, no one's actually doing, it sounds really great in theory. No one's actually doing that. So my take on prediction markets is that five to ten years from now, they are going to be a normal part of the conversation. They will have been fully integrated and regulated. But between now and then, there's going to be a lot of smoke and a lot of really pissed off people because, for example,

one of the solutions that I had last week for these markets, which I think I do think that there are aspects, first of all, I think it's inevitable. All right, so we can not like it all we want. But I genuinely think that there are aspects that are positive for society. No, they're not going away. You know what it's like, I had a friend in high school whose dad was a big, like, boxing fan and he used to get the original UFC fights.

And this is back when there was no – so it was like a 450-pound dude versus like a a 128-pound jujitsu guy. And like, there was no rules. There was no weight classes. It was just this crazy thing. And every once in a while, like, we blud all over the thing. And it made no sense. And now there's weight classes and there's belts and there's rules and there's limits

and that's the prediction markets. Like they're the UFC in the early days still. They need rules and regulations. So I don't even want to touch the third rail of like, should betting on wars, could that have societal benefits to warn people? Come on, I'm not going to go there. But this is the part that is absolutely insane.

And there's nobody that likes us. So Mike Levin tweeted, it appears that a polymarket account called Maga My Man made $515,000 in a single day, betting on last night's U.S. strike in Iran, with the first trade placed 71 minutes before the news broke publicly. When this person bought in, the market had this at a 17% probability.

They turned roughly $87,000 into over half a million dollars overnight. Bloomberg was all over this. They wrote, as U.S. and Israeli bombs fell in Iran this weekend, bettors on Polly Market where $529 million was traded on contracts tied to the time, of the strikes, we're cashing in. Six accounts on Polly Market made around the million dollars in profits. The accounts were all freshly created in February, and it only ever placed bets on when U.S. strikes might occur.

Right. I don't think anybody... Come on. It's just... We got to do better. There was also a smoke around cashier, maybe even more so, actually. Well, it's like, people have told us with the... If there's... The reason that some of these NBA players have gotten caught by draft kings or fan duels,

because it's like, if there's crazy amount of money being bet on a guy for like getting over or under rebounds in a game. Like they know that it's red flagged, right? So this kind of stuff should be red flagged by these. If they see that's like this happening, it should be red flagged and they should just void them. Right. Anywho, so I don't want to misspeak,

but Kalshi had a market. Will the leader be out by a certain date if Iran? But they're not allowed to, so they are regulated by the CFT. see. Polymarket is not. You cannot bet on death. Like, thank God, the CFTC does not allow you to do that. But that's sort of like a, I don't know if it's a wink, wink, but come on, how else would the Supreme Leader be out? He's been there for how many, the only way for him to leave was through death. Like, let's- People, people were really mad about this, obviously. Let's call spade a spade.

So the bets were voided. They refunded all, all fees and whatever. And it was returned to the probability of wherever you place a bet. So if you would have one money, you didn't. Anyway, people were pissed off, but we just got to clean the shit up. I guess. Here's a really good use case for it, I think, about putting your money where your mouth is. If you think something is right. So this is from the Wall Street. Wait, hold on. Can I just say one last thing on this? So on the positive externalities from this, what if there was a market on the Citrini think piece? Will unemployment be over 10% by by 2028? And guess what?

If that was a liquid market and it was showing a 7% probability or whatever, that would make me feel better. And it's not to say that it would be right, but I value the wisdom of the crowds. That's what I, that's a put your money in your mouth is. So that's what this Wall Street Journal piece is. The tax nerd who bet his life against, his life savings against Doge. Remember, there were people, there were tech people who were saying, Doge is going to balance the books. Just wait.

Like, we're going to cut trillions and trillions of dollars. of federal spending. This Alan Cole guy said he put his life savings, $342,000. And he basically bet they had this thing that each quarter federal spending had to exceed the level of spending in 2024, fourth quarter. Okay? So like, he just had to bet that like it wasn't going to fall by $60 billion or something. Of course, guess what, nothing stops his train. Federal spending did not fall. It kept rising. And he thought, he said, just knowing how government works, there's no way they're going to be able to cut this much spending. It's, and he, I guess he made, he made 30% on the thingers.

The 40% or something, he made like $128,000. Great story. Love it. He took all of his money for his broker's account. His wife was like, what are you doing? I, it's, honestly, it's great because he was like, listen, the way that people are talking about this cutting money, which is funny to think back, like, people really thought that we were going to fix spending problem.

And guess what? We're never going to fix it. But that was his thing. It's like, we're never going to fix it. And he put his money where his mouth is. And he won. He was thinking, like, this is an arbitrage. This is a risk.

bet. But he also said, like, listen, the virtue of a matching market is you can take the good side of a bad bet, someone else's bad bet. So other people had literally put their money of their outfits and they said, where we think the government is going, Doge is going to work. They are going to be able to cut spending. And they were wrong. That's the cool thing about these markets. Like, you're right. Hey, you think AI is going to take over the world? Put your money in your mouth is. Bet on it. Yeah. I like that. So, yeah, there's great parts of it. but the insider trading stuff, the Betty on war stuff, the not great.

Okay. All right. So wrong on Blackstone. Certainly won't be the first. It was not the first. It's not even the hundredth of, being honest. Won't be the last time that I lose money in a stock.

One thing that I was extremely right about and made money on. I still own the stock. I made the case on what are your thoughts for IMAX in April of 2025? Yeah, you've been talking about this for a while. The stock was $17. It's now $42.

And I would act like I've been there before if I had. The truth is, I haven't. Okay? So allow me for a minute to pat myself in the back. I've said on the show a million times, I am not the type of person. I do not have the personality, unfortunately, to ride like a, forget about a 10-bagger.

I take winners too fast, okay? Now, I don't take big losses. That's one of my strengths when it comes to trading. But I have a trouble, I've never made more than 150% on a stock, okay? But the thesis behind iMacs was that people are going to continue to want a premium experience. And when I said this, movies were so dead, the theater was so dead, this idea was obviously not consensus.

So the idea is, if you're going to go out to the movie and you don't go to the movie as much as did in the past, you're going to a really nice, yeah, go high end. I used to go to one movie a month. Now I go to two movies a year. I'm going to make it worth my while. Exactly. So the stock was up 14% after a record earnings report last week. Rich Gelfand, the CEO, said,

IMAX releases earned 58 Academy Award nominations, including five of the best 10 picture nominees. Every one of the Warner Bros. 30 nominations was for a film that played on IMAX. They delivered 20% of the domestic opening for sinners, one battle and F1. So this chart that they show of the top 10 grossing IMAX titles

for the domestic opening weekend, they show it like the market share that they have. And in 20, pre-COVID, it was 9, 10%. And now it's 15%. But now, man, they make up how many, what percentage of the theaters? Less than 2%. That's a 2%.

That's crazy. So literally like 20% of opening domestic box office weekend. So people are going, people are showing up for these movies, which is awesome. Let's talk about Hollywood. So Netflix. You know what?

Let me just say on this theme for a second. So I do not check the comments. I really and truly don't. I love that we have so many people commenting. I feel blessed out of my mind. For newer listeners, I guess I haven't spoke about my past in a while. Like, I was a loser, kicked out of college twice, didn't have a job until I was 27.

years old. Like, I was going nowhere fast in life. So the fact that we have an audience and that I'm a hashtag thought leader and that people care what we say, it's unbelievable. I love it. And I don't mind the fact that we have a lot of negative comments on the YouTube. We have a lot of people who post wonderful comments. So I love you more. But the fact that we have people that post negative comments, it doesn't bother me because we're public figures. And this is, this is part of what we signed up for. Every 10 positive comments, you read one bad one, It sticks through the whole day. So I don't mind that there are negative comments posted about us, but why would I choose to see

them, right? Like, why would I expose myself to that? Because it really bumps me out. I'm like, I'm a sensitive person. I don't like, nobody likes seeing stranger shit on them. So it bumps me out and I genuinely, genuinely do not. Negative comments make me stronger. Okay.

Not me. Not me. So anyway, I love that there, but I don't need to see them. Anyhow, I made the stupid mistake of. waiting into the comments section. So on Friday afternoon, I was sitting on my butt on fake turf. Logan was at like a baseball clinic, right? Swinging to bat and whatever. I said, hey, you know what? I kind of nailed the software, Netflix bottom, especially, and Netflix was my biggest position by far. Like, I fucking nailed it. Let me see some nice comments.

Let me see some people say some nice things. Give myself a shot of the arm. Someone at Ritholtz, please take one to two hours and teach Michael about basic technical analysis. At the very least, don't buy a stock in its free fall, wait for it to go sideways, blah, blah, blah, blah. Excuse me, Peter. Does Warren, you're teaching Warren Buffett about technical analysis? Okay. You said you were buying when there was blood in the streets last week. That was your thing. I bought when there was blood in the streets. And I respect price. And I always say that I can't help my bad behavior sometimes for buying stocks that are out of favor. I'm up 25% of Netflix, Peter. Not to brag. But,

The thing that really made me laugh, but also, like, really didn't make me laugh, was he just, somebody replied, he just bought a waterfront home. He's over leveraged and he's paddocking. Perfect. I thought the comments were going to be nice. I f***ing nailed it.

No, no. I thought people were going to be nice. Yeah, but you give out five stocks and three of them go up and two of them go down. Of course, people are going to focus on the two that go down. That's hilarious. So let's talk about the Netflix Warner Brothers stuff. Oh, yeah.

Let's do that. Okay, so Paramount One. Netflix backed out. Netflix backed out of this so freaking fast. And I guess they saw the writing on the wall. They don't want to mess with it. Now, you can't say Netflix went through this whole thing because they wanted to just mess with Paramount,

jack up the price for Warner Brothers, and then walk away with a $2.8 billion. It's too much work for that. They wanted it. They wanted the asset. Netflix is so much better off because of this. But here's the thing that kind of irks me. These media, these big, huge media things

where a company takes on tons of debt, and that's what Paramount does. These mergers never, ever, ever work. I wanted to see what Netflix would do with this. That's the thing that kind of bums me out is I wanted to see how Netflix would handle this being this big behemoth, and I know a lot of people didn't want it. I wanted to see what Netflix would do with HBO. I'm with Paramount. They're like the two bugiest streaming platforms. Like you click on it, they never work, and they freeze. Like, I don't think Paramount's going to make things better, and I think this is going to be

another media merger that there's too much debt being spent, and there's a million cuts of people to pay off the debt, and then it just kind of in five years we go, oh, yeah, let's spin these out now because it didn't work. HBO has a new show out called, what the hell is it called? Called DTF, St. Louis? The Jason Bateman one, yeah. Did you watch it yet? No, did it come out?

I saw the preview. I, it just looks good. Okay. All right. I'm in. So you're, so you're, you're bummed by the outcome? I just wanted to see, because, again, these media mergers, they never work. Maybe this one will, but I wanted to see what Netflix would do with it and what they would do with HBO.

I wanted like a wider, I wanted to see what HBO would have done as part of Netflix. That's what bumps me out. Yeah, I agree. There was no good outcome here. But I think this is the worst outcome. Now, Paramount apps, this was like, they needed this. So does history say that this is not going to work? Yeah, but they had no choice.

Like, they were so dead without this asset. Sarandos is saying that there's going to be costs cutting in excess of $16 billion. Yeah, he was just doing the math based on the debt. And they, CNBC had a piece where they interviewed people who work at Warner Brothers, and they're like, oh, we're screwed. This is a catastrophe for people in Hollywood and for people that work at the news departments. Like, there is going to be a ton, a ton of layoffs. So perhaps better for the theater industry.

but I think we're putting off the inevitable by not having Netflix buy it. Oh my God, the amount of cuts. All right. Anyway, I'm in Netflix at $77 and $50. Peter. And I'm not selling. How do you like that? How do you like that?

This is a buying hold for me. All right. Project Hail Mary is going to be a big one. Is that a summer blockbuster? When does it come out? It comes out in April. They spent $200. $50 million on this thing.

This is by, so Amazon has not, this is from, from Bellany. One of my favorite fiction books I've read in the last five to seven years. I think they can nail it. I'm bullish. I hope. Gosseling doesn't miss very often. These are Amazon's top 10, uh, post-COVID box release, box office, uh, hits. Red one.

Do you remember that movie? Yeah, I tend to take my kids to see that. The beekeeper, the accountant two, a working man. Challengers, Air, Crime 101, the Boys in the Boat, Mercy, and Blink Twice. That's pretty weak. And I didn't even say the numbers. I'm sorry. So the biggest one was $186 million.

That is really, really lousy. That is interesting. That's really lousy. Worldwide, are you kidding me? Anyway, Project Hail Mary is, I would be shocked if they don't smash the record. That makes sense. All right. I thought this was good at the Wall Street Journal.

Here's the headline by Emma Campbell. who is a Gen Z person who says her whole goal in life is to end the loneliness epidemic. She says, loneliness is for cowards, knowing of stopping you from throwing a party. And she goes to this whole thing about loneliness about how young Americans are lonely. They're never and they're eating alone and working alone.

And she says, I'm in my 20s. I'm here to tell you loneliness isn't an epidemic. It's a choice. My generation has decided that avoiding embarrassment or rejection is more important than developing a thriving social circle. The main social obstacle facing Gen Zers isn't social media over-simulation.

It's their own trepidation. I think young people need to hear this kind of hard talk every once in a while. Me too. They don't need to be so coddled. Me too. And I think every time we talk about this, someone vehemently disagrees with us. But I think trading physical health, which is I'm not going to go drink as much anymore. I'm not going to go on party for mental health, which is TikTok and iPhones, is an absolutely terrible tradeoff for their mental health.

Like, I think that is people get really bent out of shape about when people say that young people should drink. I can't believe where society is, how bearish people are in drinking. Yes. It's causing huge mental health problems for young people by not partying more. It sounds crazy to say, but it's totally true. Yeah, and honestly, I don't want to hear it. Actually, you know what? Comment away.

I'm not going to see it. I will die on this hill. I think that the benefits of drinking, even if you have two drinks, greatly outweigh, Listen, like for me, and Michael, you're rational, yeah, I am. Okay, I am more free to have a good time when I'm drinking. Do I sound, does that sound bad? I don't care.

It's the truth. It's a reason to socialize, too. You go to someone's house from party. It doesn't have to be that everyone gets wasted. But the other thing that I'm anti is like the oral rings that tell you how that you slept. I don't need a machine to tell me how I slept. I can tell by how I wake up in the morning, how I feel. Do I feel rested or do I not feel rested?

That's how I slept. I don't think that like people over-optimized this stuff way too much now. Well, you know, but the order that's like for adults. I don't care. At that point, you make your own decision. Yeah, you're right, true. You and I are at different stages of our life than people in their 20s that need to get out and see people more.

I also, uh, whatever, it's enough. Who cares what I have to say about this? All right, let's talk about, let's talk about scream seven, shall we? God. Speaking of Paramount, the David Ellison owned Paramount can claim the first big number one opening of the year for an MPA title of Spy Glass, a Scream Seven Wars, who are franchise best opening of the year with a $64 million domestic opening, 97 worldwide. Wow.

So you're telling me that this movie made more than the original one did? The opening? No. Did I read that wrong? Okay. Yes, you, yeah. It says franchise best opening of the year. Scream franchise best.

Is that the saying? Well, Scream 1 became a phenomenon. I'm not surprised. Maybe, maybe. It's the best horror opening ever for Paramount, beating Paranormal Activity 3. Ugh. Whatever.

Okay. Scream was an iconic, incredible movie. Yes? I assume you like, right? You like the original? Of course. One of the best movies ever. Changed like the movie genres

for the rest of the decades. It really did. And then Scream 2 was an effective sequel. They went to college. Timothy Oliphant. Billy's mom. Spoiler alert. Like, it was good.

Scream 3 was pretty silly. And then, like, that was the franchise, right? At that point, scary movie came on board and just started skewering them. Yeah, yeah. Like, come on, this is too much. Yeah. So it got silly, and that was the end of the trilogy. And then they rebooted it with Scream 4.

It was okay. But then they did another two, Scream 5 and 6, with legitimate actors and genuinely good movies. I watched one of them. They're okay. I mean, dude, yeah, they're not going to win any austers. But, like, they were more than watchable. They were actually good. Like, I bet you the critics didn't mind Scream 6.

Scream 5, Rodden. So, anyway. Hey, we talked before about we don't need this. Come on. We don't need Scream 7. We didn't need that. So, dude, scream in 2022, 72, 72 from the critics and 82 from the audience. It was Jack Quaid.

It was genuinely a good movie. So I was, I don't know that I thought had high expectations of this movie going in. I wasn't like, oh, this is going to be awesome. It was so. so bad. It felt like, I don't even want to insult Netflix and say that it felt like a Netflix movie. It felt like a lifetime movie.

It was one of those movies that, so I watched the I know what you did last summer reboot at home. I didn't go to the movie for that, because that looked like dog shit. Where when I saw that movie, I literally, I fast forward it just to the murder scenes. Because I watched the first time,

it was like, oh, this is depressing. And I just fast forward to the kills. If I watch Scream at Home, that's what I do. It's a very psychotic thing to do. Yeah, just here for the fake murders. I just fast forward to the murder scenes, not past the murder scenes, just the murder scenes. It was so, it was so bad. It was so bad.

And that married with the Mortal Kombat 2 trailer sort of bummed me out on like all the state of it. It's just this slop. Now, the good news is that this is done. At least this part of the story is over. They will, but I can't believe the audience must be so disappointed. A record breaking, it was so bad. My God. So, so bad.

on the flip side, I finally saw, I finally saw Marty Supreme. And? You saw it, right? I did not see that yet. Oh. Fantastic. Okay, you liked it. So good.

All right. You're so good. It felt very similar to Uncut Gems, which of course is the same director, but it was just more of that. Fantastic. Fantastic movie. All right. Lastly, Ben, this is not for you. And in fact, this is probably not really from any listeners.

But I watched Predator Badlands. Hey, it might be for me. We're on a Schwarzenegger kick in our house. Okay. So we watched the original predator. George is going to love this movie. And so are you. This movie had no business being as good as it is.

It's like a buddy cop movie. Like a... Yeah, it was freaking awesome. Like, it was a lot of fun. George is going to love it. And so are you. Report back. You're going to like it.

All right. So I've made a decision in my life. I haven't... I've been stumbling from one audible to the next. I can't find a good audiobook. I just, you know, I start and I get bored. And I've decided I'm never listening to another biography again. I'm never reading another biography again.

They're too boring. I tried Benjamin Franklin or Walter Erickson. Listen, some great information. He was a great man developing his philosophy. I just found myself mind-nummingly bored. It's just too much. And even though he was the original Kevin Durant. He had burners for all of his newspapers.

He'd write in letters pretending to be someone else, you know? He was the original. Yeah. So in that book, there was a part where, him and John Adams went to France and they slept in the same bunk bed. That's a lot of firepower in one bunk bed. Yeah. So anyway, it's good, but I just need,

I need like one chapter on these guys. So I went to Gemini and I said, give me a history book that like just, I don't want to be bored. I want it to be like, I want it to be fast moving. I want to like cover a lot of ground. I don't want like mind-numbingly boring stuff in this person's life. So it gave me this book. It's called A Little History of the World by E.M. Gombridge. I've never heard of this book before. It's a book that this guy in Germany wrote for his 12-year-old granddaughter in 1935. Now listen to this.

In 1935, when Gombrich was just 26 years old and living in Vienna, he was asked by a publisher to write a history book for children. He reportedly replied, of course I can. Then he wrote the book in six weeks working from memory without consulting reference books. Okay? So he said, I'm going to tell the stir of humanity in a simple, engaging way. This is the best history book I've ever read. Listen to.

How did you find it? I asked Gemini. And this is literally a book, it's called A History Book for Kids, but it's his explanation and story of human history from the philosophers to the empires, to the wars, to the... Every chapter covers like another, different empire. And it's read by a guy with the British accent, so that helps. And maybe it's just because I...

But maybe I'm a very simple person, the fact that this is literally a history book for kids. But the way he explains all this stuff, like the Egyptian Empire and the Phoenicians and like how we got the days of the week and how we got numbers and how we got months and all this stuff and where all this stuff came from. You know, sometimes you hear a piece of history

and you go, I should know this. Why don't I know this? I feel like an idiot for not knowing this. Like, Alexander the Great was tutored by Aristotle. I had no idea. That's firepower. Wow. It's an unbelievable, and I'm going to make my kids listen to it too

because it's so good. His storytelling is amazing. Anyway. All right, Ben. It is 1015. Hang on, I got a couple of, more recommendations. I'm sorry.

All right. So I've been watching Love Story with my wife still. Can a soundtrack make something better? Because I feel like the 90s music in this show is better than the show itself. Wait, what is the last story? By the way.

JFK Jr. thing. Okay, is it good? It's a movie to watch with your wife or show to watch your wife. The only good thing about Scream 7 is I saw it with a friend. And not only did the entire movie suck,

like in 20 minutes, I thought we should have left. The reveal of who the killer was was so convoluted that we were genuinely belly laughing. That's rare. Like belly laughing at the reveal. Okay, that happens. So getting back to why we need another scream, so Scrubs is one of my favorite, like,

under the radar shows of the late 90s or the 2000s. Like, it was a silly show, but it had some heart, you know, and it had a really great soundtrack, too. And they, 20 years later decided to reboot it. So the guy who created Scrubs is the same guy who did Ted Lasso, and the same guy did shrink man apple. Oh. Oh. So they brought back like all the cast from the original and they did it again. And like, so my wife and I watched the first show because we really, I love that show.

It was just, it was very well done. But the thing is, the finale of the show was excellent. It was an awesome like, okay, here's what's going to happen to these people. Put a period in it. It's done. The end. Then they tried to reboot it. It's like it kind of feels like the show, but it's like, did we need this? I don't know. I just feel like we've run out of ideas. Did you watch the first season of Paradise?

Yes. I told my wife it's a one season show, but I'm going to give it a second season to try. But the first one was so good. I'm cautiously optimistic that the second season will be okay. And then that'll be that. There's too many one season shows. My wife and I tried to watch second season hijack. Remember the Aegis Elba won on Apple?

Oh, credit to me, I was out after one season. We were like, ugh, okay. All right, market update. S&P's down over 2.3%. Russell 2000 is down 3.6%. Gold is down 5%. European stocks getting drilled down 3 to 4%. EM is down almost 8.

The dollar is up 1%. So we're pretty much we're reversing all of the trades of the past three months or so, 12 months. Big reversal. So, all right. Last week, I bought Microsoft on the air. Wasn't a bad. Die, not to brag.

I am selling Blackstone, Ben. I am taking a 13% loss because it's okay to be wrong. it's not okay to stay wrong. You know, the funny thing is that software stocks are not really getting cream today. They're down less than the market. Here, this is the ultimate Grand Rapids Hedge. I think, uh, I think this blackstone sell will look foolish, but this is not an investment for you, Ben. I'm reiterating.

This is not an investment. Don't want the smoke. All right. As always, no one knows what's going to happen, including us. And it's not investment advice. I mean, if, if you are following me, shame on you. I'm not following you. Good.

All right. Animal spirits at the compound news.com. See you next time. Be nice to Michael in the comments, please.