Animal Spirits Podcast - Adverse Variance (EP.66)

Episode Date: January 30, 2019

Cash pouring into money market funds, how markets have changed over the past 200 years, does the US deserve a valuation premium, where are all the young star fund managers, millennials don't understand how down payments work, selling a house without a realtor, overestimating housing price gains, early thoughts on the new True Detective 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

Welcome to Animal Spirits, the podcast that takes a completely different look at markets and investing, hosted by Michael Battnick and Ben Carlson, two guys who study the markets as a passion and invest for all the right reasons. 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 Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritthold's wealth management may maintain positions in the securities

discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. There was an article in the Wall Street Journal with a pretty bad headline. Investors dash for cash adds to stock market's vulnerability. And the S&P to 500 is now up, what, 13% since the 12% maybe since the bottom on the Christmas Eve massacre. So this one is wrong because the market's rallying or why? No, no, no. So just what it is. implying. So it says more than $190 billion flowed into money market funds last quarter as investors made their biggest move into cash since the financial crisis. But I don't know, I mean, there's probably a combination of things. It's probably a combination of stocks going

down, but also where short-term rates are, like where money market rates are. Yeah, you have to take that into account, which makes sense. So in a lot of ways, this is probably a smart move by invest. So I wrote a piece on this just last week showing that the yield curve has flattened out like considerably since 2016, and you'd almost be dumb not to take some risk off the table in terms of, oh, man, I can't believe I just said that. Risk off the table. That's a, that's staying in. Sorry, Ben. Caught you. Anyway. Are you cautiously optimistic or what? I'm constructive here. I'm constructive. Okay. So the badness, for lack of a better word, of the headline was nothing compared to a part of the article. I always wonder, where do they get

these people from? I don't know. Just read it. Just read us. So they found an investor in Orange County named Jerry, and Jerry says a lot of people think the party will always go on, but they aren't aware how bad it can get. He says he sold his entire portfolio of small cap stocks and shares of bigger companies, such as a software giant Microsoft. Who cares? Who's Jerry? Well, he's an investor from Orange County, New York, obviously.

Yeah. He has kept his assets in cash since then, he says, and doesn't plan to buy more stocks until he sees some indication that volatility is subsiding. One such sign that Jerry is pointing to would be a rally in transportation stocks as that would suggest health and the crucial movement of goods across the U.S. So Jerry is a Dow theorist, right? I'm not saying that you fade Jerry by no means would I ever say that. But there was a really great visual from visual capitalist this week showing the breakdown

of U.S. stock sectors since pretty much before the beginning of time. Since, yeah, beginning of the 1800s, this is impressive. It shows basically finance was 95 or 96% of the market back in like the 1800s. And then transports were a huge piece of it. And now it's so much more diversified. But let's say you were investing in transports in 1840. And no, I don't know. So I think Josh wrote about this a few years ago that like, I don't know if he said that semiconductors are the new transportation stocks. But think about how much gets you. shipped electronically. That's not just on the back of a FedEx truck or UPS airplane or whatever. So transportation as a signal into the health of the economy obviously made a ton of sense in 1913. And this was at that time, I assume all railroads because those were the biggest stocks and they all paid huge dividends. And canals as well. Yeah. Or maybe was that, was a canal, no, the canal bubble was in England. So I'm doing a little research and there was a English railway

bubble in like the 1840s. And it's kind of interesting because in a lot of ways it was like the tech bubble in the dot com era where you had all this money build out the infrastructure and the fiber optic cables. And people say like in a lot of ways that bubble was kind of a good thing because it laid the groundwork for the internet, even though a lot of people lost a lot of money. That's kind of the same thing that happened in England with the railroads where they there was a huge speculation. They borrowed way too much money and they built out all the railroad infrastructure. And even though people lost their shirts on their investments, it actually did a good thing because it built out this transportation network.

The more you know. The more you know. Let's move on. So this is kind of the next nice piece here is Mb Faber talked about valuations. And the chart from Visual Capitalist always kind of makes me laugh when people go back to 1870 with the Schiller data for the Cape. Like there's no way you can make an apples to apples comparison with the way that the sector composition of the market was back then with the way that it is now.

And I'm not saying Mab's trying to do that here, but that's kind of something people do. But anyway, Meb shows it back to 1980. And he says that the valuation gap between foreign and U.S. stocks is the widest it's been in 40 years. Well, I would say to Meb now show it without Japan. That is the one prior peak where you saw the U.S. lagging badly was in the 80s when Japan was, it looks like more than two times as much as the U.S. in terms of Cape. And we'll share this one in the show notes. But there's so much gray here. And I think that generally you and I would agree that the home country bias is probably not going to help most investors across the globe. How could it? And we do think that valuations are very important. So I see both sides. I think that Josh has good points. Josh has made the case that we are special and based on the dynamics of our economy and the stability of the political system, which sounds hilarious right now. But the strength of the dollar and the innovation of the economy that we do deserve a premium. But the other

side of that is that, well, that premium has been reflected in stock prices. So U.S. stocks are up, what, 250% of the last 10 years? Foreign stocks are up a fraction of that. Right. And even if, let's say, over the long term, the U.S. does deserve a valuation premium, that doesn't mean it's the same thing every year and that meaner version can't kick in and make it fluctuate wildly from year to year. And I think, like, these kind of arguments, this is a kind of thing where, sure, you could look back over the last hundred years and say the U.S. did deserve a premium because of the way that things really happened throughout the world and the way that U.S. is structured. We deserve a premium because a reality TV star became president. What a great country.

Yes. But the thing is, do you want to make that same argument going forward that the U.S. from here still deserves a premium? No, I do not think we're going to have another reality TV star in the office. Okay. Does Howard, Howard Shultz doesn't count as a, he's just a, oh my God,

he got roasted, pun intended, so badly last night. I guess if you want to know how people really feel about your presidential chances, just put it out on Twitter and get ratio to death.

I don't know. But is there anybody who could tweet right now that I'm running that would be like, oh, thank God, finally our savior. No, I don't.

God himself would get roasted on Twitter. Twitter, That is Twitter is a brutal place. All right. Let's talk about your post, or this is just a tweet. Actually, I wrote a post about this a few years ago. Where are the young superstar hedge fund managers? There was a story about David Einhorn and how he got hit by huge investor redemptions,

and we've covered him a number of times because he struggled mightily. And he was supposed to be the next Buffett, and Bill Ackman was also supposed to be the next Buffett. No, no, no, no, no, no. He was the next Phil Fisher. You got it all wrong. Okay. And then Eddie Lambert was the next Buffett. And so many of these young era parents that were supposed to take over that crown of being the best investor have failed, maybe not failed, but had a really tough time, especially in this, I'd say the last 10 years or so.

And my point was, is there a single star fund manager under the age of 60? And it was kind of funny, I asked that question, and I got back responses saying a bunch of people I've never heard of before, which kind of misses the point of star fund manager. So obviously there's people who have track records that are okay. And maybe the point of this is things are different and money's flowing into ETFs and out of mutual funds. Well, two points. Maybe the Real Star Fund managers are not the funds we made along the way, but maybe they're like the computers. Okay. And computers tend to have pretty reasonable personalities and small egos.

A lot of them were quants that people were mentioning, actually. Okay. Well, the other point is that maybe they are learning their lesson from people like John Paulson and David I. Reinhorn and Bill Ackman and saying, later for that shit, who needs to be in the news? Like, I don't want that. Right. I think, yeah, that's possible that, especially back in the day, people didn't need to have a huge following or people didn't have to deal with social media and stuff. And I've heard this argument before, like, can you imagine Jordan having to deal with social media in basketball instead of what he had back then, which was just newspapers and such?

So it's a completely different time. So maybe those people that do have the great returns and performance don't, they just don't want that. imagine people taking pictures of Jordan at the casino the night before the like the finals right he would have gotten there's no way he had it has much adulation as he had back then as he you know if he came up now so so ianhorn wrote a investment letter i believe in 2015 where it was the year when everything went wrong and the reason why i bring that up is because i almost wrote about that in my book but i just i ran out of energy so he was going to be one of your people you've profiled in your book yeah so anyway he he wrote another investment

letter in 2018, pretty much the same thing where he said everything went wrong. He said, today it feels like, it feels more like a combination of a few where we were wrong, a difficult environment for value investing, and quote, a lot of adverse variance. I think maybe the one of the best things hedge fund managers are good at is like their best quality is explaining underperformance without saying we underperformed. Like they are so good at explaining this stuff in a intelligent sounding way that makes them not sound like idiots, but it makes them sound intelligent. I hate to pile on, but did that not give you douche chills? That was pretty bad.

Adverse variants? Yeah, he needs to put some money in the bucket. So one of the ones that I heard about that probably was the best answer was Ken Griffin for Citadel is to far as star fund managers under the age of 60. And a few people said I got lucky because David Tepper is 61. And I think he could probably say he's still a star fund manager. Like when he goes on CNBC, everyone is talking about what he's saying. And he's great, too.

He's got a great, like, gregarious personality. He owns part of the Panthers now. I think you put him in there, but he is under 60. But anyway, Ken Griffin at Citadel, which is just this mammoth hedge fund. And they got slaughtered in 2008. I think they were down like 52% or something in their convertible arbitrage strategies. But since then, they've done. Talk about adverse variants.

But they've done really well in that time. And I think they manage like 30 billion. million dollars and they've managed to actually do pretty well in this period where a lot of other hedge funds haven't. And Griffin just last week, I think it was announced, bought the most expensive penthouse on the planet. What was it, $238 million or something in New York? You know, $238 million just does not get you what it used to. That's just, that's bonkers. I don't know what to say to that. If you were one of his clients, I don't know if you say, that's a great thing. He's made that much money that he can afford that or that's a terrible thing. That's how much money

Well, there was an article in institutional investor about hedge funds and it said that they have delivered $30.7 billion in profits to their investors since inception, which is third of any hedge fund. They made $2.1 billion for their investors last year. Their flagship fund was up more than 9%. So they kicked ass last year. And R.R.I. Christie had a shared a cool chart on the distribution of investors paid by levels of fees paid. And the median management fee is now under one and a half percent. And the median performance fee is down to 16 percent. Only 5 percent of funds are charging 20 percent of profits. Which is probably the way it should be. And the ones that do charge it are probably some of the biggest ones with the best track records. And they charge that

much because they can. So I have something in my head that I'm having trouble squaring. On the one hand, you have people saying that, I think Ray Dalio said this, that when he started, there was 10 really great funds getting all the alpha, and today still there's 10 funds getting all the alpha. So that's on the one hand. On the other hand, you have people saying that smaller funds have the opportunity to be more nimble and to really create outsides returns. And the reason why I say you have on the one hand, on the other hand, is because there was

in the same article from institutional investor, it has a crazy stat. The 20 most successful hedge fund managers, meaning the 20 with the highest total dollar return since inception, the 20 most successful hedge fund managers made $23.2 billion net of fees for their investors last year. By contrast, all other hedge fund managers generated $64 billion in net losses. Wow. So isn't that wild? So the whole industry. So what do you make of this? I think this is kind of what a lot of the studies have shown that there just aren't that many that are worth it. And the ones that are worth it probably continue to see. money pour in and I would imagine that's kind of what will happen these days is you'll see these

ones that were successful get a lot more money and there's just so many of these and that's that's another thing going back to the star fund manager thing that's probably another reason why there are so few of them because there's so there's 11,000 hedge funds these days like how hard is it to really stand out from the crowd and i think that's one of the reasons that people like einhorn and acmen and lambert have sort of fallen back down to earth in some ways is because they had great track records and then to sustain that. It's not enough to just keep things going and plotting along. You actually have to do something huge to stand out. And they tried to make these big moves and it backfired. And so I think like going out on a limb and trying to do that and be an Uber contrarian can hurt you in a lot of

ways. And I think that's probably the way it is here too. There's just so many, so much good competition that it's impossible to do it, especially after all the fees. So over the weekend, Charlie Munger said that a lot of money managers are like a bunch of cod fishermen after all the cod's been overfished. They don't catch a lot of cod, but they keep on fishing in the same waters. That's what happened to all these value investors. Maybe they should move to where the fish are. So is he saying that you should swim to where the fish are going? That was, by the way, Munger's 95. That was a giant, like, huge sub-tweet of everyone who goes to the Berkshire Hathaway meetings, isn't it? I think he got that quote from Trent Griffin.

I wouldn't. It could be from one of his books, maybe. It was ice cold, like just saying that all these, But in a lot of ways, that's true. Like, think about how many people go to that annual meeting every year. And, I mean, it's got to be six-figure people, hundreds of thousands. I think Morgan tweeted something like where all the contrarians go to blah, blah, blah. And that's what I wrote in my follow-up tweet to the thing about the Star Hedgeman managers, that the irony is that all these people followed Buffett's lead, and so many of them did that it probably made it harder to actually be Buffett. Good point.

All right. So let's stick with adverse variance for a second. Okay. Watch what I'm about to do here. So I am for the first time in many, many years going to be in the market for a new television. Okay. So I thought I've been accumulating so many points on my credit card and obviously that they are best used for travel, but we don't really travel too often. So I was thinking, why don't I just use my points to buy a TV?

Okay. How many points for a TV? Okay. So I went on to Amazon and there is a huge. huge difference between what you can get on Amazon, for instance, with, and I'm talking about the Chase Sapphire card, so the Sapphire Reserve card. So you can get, if you were to use this and redeem it for Best Buy gift card, are you listening, Ben? Yes. Sorry, I was just going to make a Bill and McFarlane joke. I just wanted to make

sure you weren't using his credit card. What was it called? Magnesis. Yeah. So if you redeemed through Best Buy instead of Amazon, you get 25% more. Isn't that crazy? Oh, okay, because they have their different merchants that you work with. Yeah, so it's like, it's a no-brainer. It's probably one of those things where the Amazon people just wouldn't budge, and that's like the Bezos thing of they probably just don't, they probably wouldn't negotiate on that sort of thing because they don't care. So the deal from Best Buy is pretty good.

It's actually better than getting cashback from Chase. Okay, so what size TV you're getting? That's the big question. Okay, so I have a giant wall. So I'm going to get like a 75-inch one. Giant wall. Sorry. That was a crossover joke. It was? Yeah. The Trump. Giant. Yeah, never mind. Listen, I built the biggest, most beautiful wall. Yeah. And I'm going to throw a giant TV on it. It's going to be beautiful. Okay. Anyway, but I will take your advice and not go for the top of the line. I feel like for a 75 inch TV, you could spend like less than $1,500.

Oh, easily. Yes. I don't think that, yeah, you should spend more. I'd say $1,200 should be your max. That's what I put in that. With tax or without? I don't know. What do you pay in New York for tax? Forty percent for sales tax. So there was an article, where did this come from? National Mortgage News.com with a pretty roasty headline. Millennials really don't get how down payments work. Ouch. And I think the reason why they said that, there's a pie chart called missing the memo. Millennial homebuyer cited down payments as their biggest home ownership barrier past because few plan to put down less than 20%. So I think that that this article basically calls into question the value of a survey.

Okay. Oh, I think it does too because there is no way, this, by the stats here, this shows that 63% of people are going to put down more than 20%. There's no way that's possible, especially for millennials. I think they literally misunderstood the question. 76 to 100% for a down payment, 13% said they're going to put that much down. Oh, this is fantastic. It says the results highlight potential confusion and

uncertainty among consumers and first-time homebuyers. How do you not know what a down payment is? Maybe the millennials who answered the survey don't deserve to own a home if they don't know what a down payment is. So speaking of home, today is Monday and I am hoping to sign my contract today, meaning, Ben, I did it. I sold my house without the help of a broker. Woo-hoo. That's pretty impressive. How long did it take? Six weeks, eight weeks? I listed it in the middle of December. So about five weeks. Okay. So that solves it. There's no recession. That's it. It's over. It's still selling. I did work with a buyer's broker, however. So I do have to pay 2% to this person. Okay. And what sort of, what did you do when you showed the house? Did you like

give a good talk? Did you have a good like sales pitch and stuff? Or did it just kind of? I mean, it's a small two bedroom apartment. It's nice. I have a nice roof deck. So, you know, I came prepared. Sold itself. All right. So anyway, I do want to talk about this for a second because I was, I took out a spreadsheet and I was trying to figure out, okay, this was, because people always misunderstand how much a home really costs, right, in terms of, oh, homes are a great investment. And yeah, they can be maybe, but I certainly don't think that anybody should bank on a home being in an investment. A home is where you live and you should pay to live in a home.

So anyway, here's how it shook out for me. Between my down payment, my monthly maintenance, whatever assessments and building renovations or whatever that needed to be done, I ended up paying about 50% less than I would have had I been renting. Wow. Okay. Which is still pretty good. So I'm just making up a number.

Let's say over three years to rent would have cost me $10,000. Then owning an apartment cost me $5,000. Oh, that's not bad. Which is actually pretty great. And the reason why it wasn't why it was so much was because obviously, as you know, the first three years, I think like 85% of my payments went to. principal, I mean, sorry, I went to interest. Right.

So my home appreciated by three and a half percent, and it still cost me money to live there, but not nearly as much as it would have cost me if I was renting. Yeah, and I'm guessing that that spread is wider in a big city like New York or Brooklyn or wherever, you know. Yeah, yeah, definitely. Yeah, because renting is so freaking expensive. Like to rent an equivalent apartment to what I own would have been a ton of money. Yeah, that's pretty good.

Yeah, and I'm sure how many people do you think actually do that calculation and when they're done or just people just move it's kind of like when you sell a stock or you get out of a manager that has underperformed like no one tracks it after the fact they just let it go oh yeah my wife was like I don't care like who cares right it's it's good to know and a lot of people probably don't do that calculation they just they just look at the the raw numbers my first thought was holy shit this cost us almost as much as this cost us like 80% of what a rental would but then I forgot to I forgot to include the benefit of the interest deduction which is huge okay That makes sense.

So after that, after all of a sudden done, it saved me quite a bit of money. All right. Speaking of saving money, or I guess the opposite, let's stick with adverse variance. Let's talk about the Reddit trade of the week. This is good. These are great. And again, someone tried to explain us how to use Reddit and I looked at it and my eyes lost over and I'm like, no, I got nothing.

So just keep sending them to us because we're never going to figure it on our own. So this says, the headline is PG&E cleared from wildfires, WTF, a bunch of question Marks, I sold it $7. So it says, news just broke out that PG&E got cleared from liability for California Wildfires. WTF. Seriously, I bought $90,000 worth of shares at $17 and sold them at $7 because you guys, all caps, told me it was going to be bankrupt.

OMFG, Y. 406 comments. This guy also got roasted. I love the fact that there's no onus on this person for making the trade. It was, you guys told me to do this. I just did what all the Reddit commenters said I should do. Like that totally absolves him of any sin. So that's pretty good.

So tell me the story about PG&E and what that was with the wildfires. Me? Yeah. Oh, well. Just for people who don't understand. Oh, okay. So, so what is it, Pacific Gas and Electric? Yeah.

Where the company that is like being blamed for the wildfire. So it's a utility company that is, there was talks of bankruptcy. I don't really know what's going on today. But the stock, needless to say, got annihilated. Yes. And trading a, trading a company that is full. flirting with bankruptcy is just like that's like talking about your ad experience thing that's a huge range of outcomes that that you yes if you if you

need to gamble on something like this for goodness sakes just buy options right or gamble on it and let the money ride and either make a bunch or lose it don't like try to sell and ninety thousand dollars was this person insane I don't know the first comment is next time try reversing it buy low and sell high a ho good one okay Speaking of bad ideas, so this tweet comes from Cheddar, there's a box that mutes your voice so you can make phone calls in public and it basically makes you look like Bain from Batman. Yeah, I'm sure that joke's been made a lot. But maybe that's what you need because we have so many people that complain about your mic on the show. Actually, this guy is bald.

Can we get you one of those and just so we like put the microphone on your face? It's terrible. Who would wear that? It's so dumb. This is as bad as an idea as like the sitting chair. like the chair that you as a backpack and you could just sit. You know what I think is probably, I don't know, 20% as bad as this? I'll put it out there.

And honestly, it's possible you use one of these airport neck pillow. Nope, I don't. Chris does. Okay. That makes sense. Of course he does, right? Yes. Okay.

How about some listener questions? Okay. Hey, guys, curious what you would take if you had to allocate your bonus in 25% increments between restricted stock units, RSUs, and stock options. 30-year-old investor, solid blue-chip company. I wonder if it's GE. Anyway. Wait, hold on.

Before you get to this, we have to say we are not accountants or specialists in RSUs or stock options. Please speak to your advisor, attorney, accountant, et cetera. All right, go ahead, Ben. Yes, which is kind of what we did. We went to some of our advisors and Bill Sweet said he kind of gave the breakdown and it's basically depends on what you're going for. So he said from a taxable standpoint, the restricted stock options. Restricted stock units are inferior because when they vest, you have to pay 100% of taxes on them as ordinary income. But they are far more likely because they're probably to be

worse something versus a stock option that you never know what it's going to be worth. So it's basically one of them's a better tax situation, the RSUs. One of them could be a higher ceiling, which would be your stock options. So it's kind of like how do you balance those things? It's hard to say, but I guess the, if I'm going to tow the, toe the line here, half and half, maybe, I don't know. That's a tough one to say, but it's kind of understanding what the events mean when, when you get the money. All right. Next. Is there any responsible way in which non-institutional investors can capture a premium for locking up cash and less liquid investments for longer periods of time? Everywhere I look, people seem to be paying for the liquidity with little thought

toward how much they need. Feels like that should be a way for a patient capital to angle for a premium. What say you? So this person says they're basically maxing out all their retirement accounts and they want to do something else and actually use the fact that they don't need liquidity to their advantage. Honestly, if you're an individual, I don't know that there are many ways that you can use the liquidity premium if there is such a thing to your advantage. Maybe real estate, I suppose, you could do some rental properties if you're already, but. Gold bars. That's true. Did you see the story with Venezuela last week? No. Okay. So there was a story saying that Venezuela, has much of their, and this was a tweet from Joe Wisenthal, Venezuela has much of their gold stored in London for some reason. And they're having this huge crisis right now because their hyperinflation is like a million percent a year. And they tried to get their gold bars out of one of the reserve places that is holding it in London. And the people in London said, no, you can't have it back. And so it was like, this is like the biggest crisis ever. Like this is when you need gold to shine, pun intended. And they couldn't get it back.

So there goes your gold theory. Anyway, I said physical Bitcoin maybe, but I think by the time an illiquid investment opportunity gets to an individual, I think at that point, you're really just fighting for table scraps. There's probably not much that's going to make it your way. Yeah, somebody, I think it was David Schaubel. I can't remember who said once something has gotten to the point of I'm just buying it for optionality, it's gone. The trade is over. Yeah. You know, if you're already maxing everything out, saving a taxable account, there's not many.

options. I guess you could argue real estate if you really know what you're doing or have someone who does know what they're doing. That's one way to diversify, I think. But a lot of the other options out there, there's not many good options, I think, unless you want to just let your money on fire. I guess you could try to take some big risks and assume that it's going to go to zero if you wanted to do that sort of venture. But other than that, there's not very many good options, especially for individuals on the retail side of things. All right. What recommendations do you got? First of all, have you been watching True Detective? I have. Let's talk about it. I think the jury's out. I'm three episodes in. I didn't watch the one last night.

Okay. I have one left. I have one more episode in me and then I'm pulling the plug. The first episode really drew me in and I'm like, okay, it's three different timelines. Whatever. There's going to be some big twist and reveal, you can tell. But ever since that first episode, it's been really slow, like mind-numbingly slow. And he's a great actor. Like, I think he's amazing. Yeah, he is. But if he wasn't amazing, it would be totally unwatchable. Yes. I'm really surprised it. It's like, it's just like, it's molasses. It's just so slow and a little. Are you with me? One more episode. And then we pull the plug. I think it's getting. You do what you want. I want, I want to see what happens. Maybe I'll watch the end. I want, I need to see the

twit. There's some sort of twist they're billing up for and that's the only reason I'm still there. Oh, maybe he is Matthew McConaughey the whole time. Time is a flat circle. Yeah. All right. First man, this is a, an unrecondation. Is that a word? Oh, that's just a I was so disappointed in this because we, our favorite book last year, mine was, and I think you said too, was Rocket Men. Yes. On Apollo 8. And this was the one that went after that.

And this was, wait, was this, this was the moon landing. Yeah, I think it was actually 11 that was, I don't know how they did the order. Anyway. Prime, prime numbers. This was all about Neil Armstrong and Ryan Gassing played him. And I was really excited for this one. But it was, so the guy who directed it directed La La Land, which was the musical. And I think he tried to go for.

a little more of a creative bent to this one. Like, if I'm watching a movie about a real true life story about landing on the moon, I want it to be, like, there needs to be a lot of gravitas of the moment. Like, that was like something that brought the whole country together. Yes, epic. There was, and I wanted it to be, like, exciting. And when it happened, it just, it wasn't that great. It was kind of like a, oh, it just, I don't know, it was more about Armstrong who had,

to be fair, some tragedies in his life. All right, it's enough. It's enough. All right. But it didn't do it. Like, I really want it. to make, and the part about Rockman I loved was all the science behind it and how hard it was for them to actually pull this off.

And there was none of that in the movie. And so, anyway, I wanted more of that and I wanted more of the Houston stuff. So I would say, don't watch it if you're like me and want all that other stuff. Finally, one more. I read since yesterday recently, which is the follow-up to only yesterday written by Frederick Lewis Allen, who I think has got to be one of my favorite, like, financial historians. And so the only yesterday was about the 1920s, and it kind of ended when the depression started, and this is since yesterday, which would be the follow-up, kind of sounds like some sort of

movie Ethan Hawk would do. How was it? It's good, and it picks up at the Depression, and it kind of goes through that, and his writing is so good. But one stat from the book that just, every time I read about the Great Depression, it sort of boggles my mind. So, Enber said during the great, he said 1932 is basically like the worst economic year in history. And he said, the amount of money paid out in salaries dropped 40% that year. Dividends dropped 56.6% and wages, dropped 60% in one year. Let me ask you a question. This is tough.

Okay. Pick one. Frederick Lewis Allen, Derek Thompson. Frederick Lewis Allen really was a Derek Thompson on his day, I think. All right. Is that it? That's all I got. Okay.

I'm reading a book, I'm sorry, not reading it. I read a book called Destined for War. Can America and China escape through Cidities trap? I probably didn't say that right. So this book, it's not really just about China. What was the spelling on that word? T-H-U-C so that's Thus

Y-D-D-E-S Thucydides Yeah, you got me Thucidides Okay And so what it did was It looked back in history of like Existing Superpowers

Versus up-and-comers And it described like a bunch of historical clashes And how they played out Okay So not saying that past its prolog But you know How things might play out Is the conclusion that we will be able to

avoid a war with them? Yeah, I mean, maybe. But so I just want to read a quick part. And I think I actually read something similar to this from another book that I read. In 196, so this is talking about about Vietnam. In 1964, two days after North Vietnamese ships attacked the intelligence gathering destroyer USS Maddox in the Gulf of Tonkin, U.S. intelligence reported a second attack on the ship. Provoked by this North Vietnamese audacity, Secretary of Defense Robert McNamara led the campaign that persuaded Congress to pass the Gulf of Tonkin resolution. essentially declaring war on North Vietnam. Only decades later did McNamara learn that the report about the attack was incorrect, as

McNamara wrote, quote, ultimately, President Johnson authorized bombing in response to what he thought had been a second attack that hadn't occurred, end quote. A false alarm played a key role in putting the United States on the path to failure in Vietnam. Wow, that whole period was, I finally started watching the Vietnam doc on the Ken Burns one. It's amazing. I need to pick that back up because I stop, but it's so good. Okay. Speaking of your war, really quick.

I want to inject. So I wrote a piece last night about like who owns all the stocks and bonds in the world. Now, tell me, let me know if I went a little too far on this one. So this is a Goldman one and it starts in 1962 and goes to now. And basically in the 60s, like no foreign investors own U.S. debt. And now it's like 26 percent. It's the largest cohort of owners of of U.S. government debt. Is this going to MMT? No. My point was, doesn't that almost make you feel a little safer about the world in terms of these things about going like China obviously is one of the bigger owners of that? I think Japan is the other one, that everything is so interconnected in terms of the financial markets and they own

all our debt and we're kind of beholden to one another that maybe those, the ramifications of that going to war with another in terms of the debt maybe is kind of a stop gap. Mutually a short destruction. Yeah. And anything, that could be, that could kind of be something like not only would we go to war, which would be devastating, but it would be. No, that's too reasonable. That's too cautiously optimistic. Okay. All right. Two more things. Real quick. I watched Get Me Roger Stone. Okay, on Netflix? It was amazing. This guy is, what a character.

So obviously, I don't, well, not obviously. I didn't know really much about him at all. Except that he's Chad Johnson's neighbor. Except that he's Chad Johnson's neighbor. I highly recommend a documentary, even if you don't give a shit about politics. He is just an amazing character. And it recently came out? Yeah, pretty recent.

I think it was last year. And then lastly, actually, two more things. I finished the Rachel Maddow podcast called Bagman, where she looks at the resignation of Spira Agnew, Nixon's vice president, highly recommend wild times. I listen to that one too, pretty good. Yeah. Okay.

And then lastly, so we spoke about Fargo as one of our top ten. It was on both of our lists, right? Yep. So I watched the opening. It's on TV, like, all the time, and I always watch it. But I haven't seen the opening scene in a while. The opening three minutes where William H. Macy goes to meet Steve Bouchemey and the other guy, and he's an hour late.

Bouchemey's like, I'm not going to sit here and debate with you, Jerry. Do you know what I'm talking about? Holy cow. What like a, what a triumph of film making. Yes. Yes, that's good. Plus the Minnesota accent is just just really, I think that adds to it. So good.

All right. That's it for us, right? Yep. Send us an email. Animal Spherespot at gmail.com. We'll talk you next week.