Animal Spirits Podcast - Are Stocks Cheap? (EP.312)

Episode Date: June 14, 2023

On today's show Michael and Ben discuss the greatest company in history, why the bear market is over, why this might not be a new bull market, why the economy keeps humming along, what falling inflation means for the markets, why martinis are overrated, how much you should pay for a kids meal at a restaurant, and more! This episode is sponsored by our friends at YCharts. Get 20% off your first subscription at: https://go.ycharts.com/animal-spirits-referral.  Find complete shownotes 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.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   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. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by our friends at Y Charts. Big news on Y charts this week. They released the dark mode, highly anticipated. Oh, finally. I never even thought about it. I feel like, so you go to user preferences and change it. Do you, I feel like you're a dark mode guy with like Twitter and other? Yeah, everything dark.

Okay. See, I'm the other way. I like the way. I have sensitive eyes. Okay, I can see, but the charts still come out white. And a very sensitive heart, mind you. It looks nice. The charts are still white.

The background is now dark. stick with white, but I feel like you're going to change over to dark. That just, I don't know, it seems to suit you. It goes well with your dark animal spirits v-neck t-shirt, which I didn't know we had Vs. It's not a deep V, but it's a V. Yeah, you know what? When I pulled this out, I thought, hey, this is kind of cool. We've got, this is like original swag. That's the old one. I don't know if we sell this anymore. This is a collector's edition. I will be sticking with white on Y charts, but I did go to Y charts this morning. I pulled a bunch of inflation data because we We had the CPI print today, and I'm going to be talking about that on the show.

If you want to check out the new dark mode or the light mode like me, whitecharts.com, tell them Animal Spirit sent you. You get 20% off if you sign up at the new subscription. Hang on. How do I turn Dark Mode on? Somehow user preferences. They have a link in here. All right.

Well, I'll get on it. Thank you, Ben. 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 Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben.

We're going to start the show with a recommendation. What do we call this? Review. We're going to start with a review. dude that was left on, where'd this come from? Tropical brothers. Tropical Bros. Oh, wow. Okay. From David G. Thank you, David G. Five stars.

Quote, I was looking for a shirt that says I'm confident in my target date index fund strategy, but also like to dabble in meme stunks. The kind of shirt that brings out my baldness, the kind of shirt that says, I'm sorry, I can't talk right now. I got to meet the subcontractor to go for the mudroom plans. If you're on the hunt for a similar kind of shirt and one that signals new whale vibes while sipping out of Miami Vice while collecting Bonvoy points, to make the family Disney trip more accessible? Look no further, bros. Man.

Nailed it. I'm giving you a virtual hug. Thank you, David. David knows us. So the demand for these shirts was, we've now sold out of small, medium, large, XL, and then triple XL. I didn't know they had a triple XL.

Do we know if they're restocking? They are. They're restocking. They just said it's going to take a couple weeks. So we will let everyone know when that happens. Still have plenty time to wear them for this summer. But, yes, I can't wait to see them out in the wild. wild.

One more update before we get started. This is future proof. So we just did an announcement, new speakers. Josh had a funny line. He said this is probably the only conference where you could see Wu Tang, where you could see Methamann and Jeremy Siegel. So somebody texted. And if you have your animal spirits, tropical brol shirts, you have to wear them there.

Yeah, of course. Somebody texted me, hey, Hyatt's sold out. Can you help me out? I'm like, we'd help you out. I don't work at the hotel. We're with the other ones. So that's no bullshit. Rooms are, like, legitimately selling out.

So, yeah, get a ticket. We'll see you there. All right. So much fun. Jonathan Farrow had a great tweet. The year so far. Does it feel like June, by the way? I don't know.

This is another middle age sign for you when you talk about like, geez, the school year just flew by or the summer just flew by. That's middle age. Today is Logan's last day in the three's programs. And I said, man, where is the time going? Not that he's already almost four, but the fact that it's. it's already summer, like... Kids make you realize how old you. I don't know how my son knew this, but he came, for the last month, has been saying,

do you know how many days we get off for summer break? 94 days. It's a long time, right? That's an incredibly long time. Wow. All right. The year so far, again, Jonathan Farrow. January, soft landing.

February, no landing. March, hard landing. April. Credit crunch, Shirley. May, it's just mega cap tech. June. It's a bull market for estimation points. And it does feel that way.

That's a very good recap. The narrative cycle. We've been on a huge narrative cycle for the past 18 months at least. Yeah, I feel like I wrote it. I did write a post maybe last year when I was still writing a little bit about like how quickly don't fall from the narratives. They're just going to change so quickly. So I was thinking back to how long ago it felt like a recession had started.

And we argued here on this podcast. I'm not really argued. We were on the side of, yes, two consecutive quarters of negative GDP for a lot of nuances that we're doing to revisit today. But we were pretty firmly in. This is not a recession with unemployment at three and a second. I was pounding the table. This is not a recession. So on May 24th, 2022, 13 months ago, I wrote a post. And it's very quick. So I'm just going to read it to you. The title of the post was recession. The bad news is piling up. The recession that people are looking for may already be here. We heard about inventory buildup at Target and Walmart last

week and the stocks responded with our worst day since 1987. Do you remember that? Oh, yeah. This is when you thought that Snap was still a macro indicator as well. Those were not isolated incidents. This week we heard the same from Coles in Abercrombie

whose stock is cratering 30% in the news. In other news, Snap just weren't of an imminent slowdown from the Wall Street Journal. In a surprise announcement, Snap, the parent company of Snapchat said in a filing Monday afternoon

that revenue and adjusted pretext earnings for the second month. For the second quarter, it will come in below the range to the company predicted barely a month ago. End quote, the stock is crashing 41% on the day and is 85% below its highs way back in September.

Big Tech is growing through it right now. The NASDAQ 100 is in its largest drawdown of the last decade, and it's starting to bleed into the real world. Layoffs are picking up steam. In the physical world, new home sales came in 27% lower than expected, and the previous three months were revised down. It's good to see the housing market cool off with mortgage payments up 43% year over year.

Clearly, we were on an unsustainable path. And to top it off, the stock market just keeps going down. If the SP 500 falls this week, it would be just the third time since 1950 that it fell for eight consecutive weeks. The good news about the bad news is that the market has spent the last couple of months discounting it. We don't know when this ends, but we know how it ends. The news will continue to get worse, but the market will rip anyway.

People will be confused and will struggle to make sense of it, but we're not there yet. Right now, we're still in it. And that was the post. So Snapchat was down 85% when you wrote this. What do you think it's down now from all-time highs? 95? I don't know. Basically, it's lower than it was.

But remember, like the retailer stuff really was a bit of a red herring. Yes. It was a re-stocking and inventory problems and supply chains. So that was 11 months ago, or I'm sorry, 13 months ago, and here we are. Inflation continues to come down. One of the themes of today's show is that things are returning to normal. Yeah, if there is such a thing. That's the problem with the markets is there really isn't ever a normal per se, but it...

I don't even mean in the market. I really mean more in terms of like inflation coming down, egg prices being down 13% month over month. Like the prices, how about the... Yeah, prices are returning. If we go back to normal and we don't get a recession, there's going to be people who are so angry that we spent $6 trillion or $7 trillion, whatever was in the pandemic, and don't get a recession.

Can you imagine how mad people are going to be? Like the people who want to watch the world burn and have been predicting recession for the last 36 months or whatever, those people are going to be so angry if we don't have one. And it's starting to look like it's more and more possible. I don't know if it's, yeah, sure, there are people that are just angry that want bad things to happen. But I think it's, if things don't happen the way you think they were supposed to happen,

people have these mental models. And when they break, they become very defensive. And the idea that you can pump trillions of dollars into fiscal stimulus into the economy, that you can do all this quantitative easing, that inflation can have a multi-decade spike, and you could just work through it without there being any consequence, like moral upcoming, right, that you've done bad things. Yeah, like you've made inequality worse,

all these sort of things that people are warning about, and you don't have to pay for your sins. Well, here's the other thing about it. People get upset. Aside from the world should burn thing, which is those people are always going to be around. The thing about the world of finance is people are highly educated, right? They went to good schools. They're very smart people. Speak for yourself. For the most part. And people really want to be right. A lot of times people would rather be right than make money. I know that's like a technical analyst saying.

But I think it's true. Some people in finance, like the intellectual stimulation you get from thinking about this stuff and forecasting it, I think some people get off more on that than they do even on like what their returns are. So people want to be right. And if they're proven wrong, then they look for ways to move the goalposts and figure out ways to say, well, I wasn't really wrong. I was just early or it was a Fed's fault or whatever. I think, I think there's some truth to that. Obviously, there's a tipping point where people would rather make money than be right. But let's just say somebody, you get a huge boost out of publicly calling the bottom or the top of any market stock, whatever. And even if you don't actually put money,

on the line, you're satisfied. In other words, would you rather pick a number, $25,000 from a good trade, but nobody knows about it, or not make that money, but have the public think that you're a genius for predicting something? I feel like there's a Warren Buffett quote in there somewhere, correct? Sure. Did you read Matthew Ball's, what do we call Matthew Ball's pieces? The essays.

Right? They're not blog posts. They're not pieces. Winnie the Pooh meme. Yeah, blog post essays with a monocle. Is it article and blog posts? Those are kind of on the same field. Then peace.

I thought essays ended after you leave high school. I'm sorry. No one writes essays anymore after leave high school. What would you call Matthew Ball's essay? A blog post. Nah, it's not a blog post. It's not a blog post. If you go past 8,000 words, you've crossed over the Rubicon.

You're now in peace territory. It's an article or peace, yeah. All right. So anyway, he wrote a lot about the bets that big tech has been making in hardware and just how expensive they are. And one of the things that we've spoken ad nauseum about over the last, I don't know, eight years was margins in Bing Tech, the size, the scale, the dominance, the moat, all the different categories, and how they are fundamentally changing the sector

composition, the fundamental composition of the entire index itself just based on their profile and we've never seen anything like this. There's no comp. No companies in the 50s were like this. No companies in the 70s or even the 90s. We're able to do what Apple and the like are able to do. So, for example, he said from the debut of the iPhone, and I think this is still maybe underappreciated, even though it seems like it's overblown. From the debut of the iPhone in 2007, I'm sorry to cut myself off. Do you remember when Andrew Marks, I don't think you are sorry, but keep going. Andrew Marks, Howard's son, wrote, they wrote a piece together, an essay, if you will,

in which Andrew argued you can't have a fundamental bearish view on the S&P 500 without being able to make a compelling bear case on Mega Cap Tech, because that is the whole enchilada. Okay, back to Matthew Ball. Hang on, I'm going to cut you off now. Couldn't you say the same thing going forward about AI? It would be hard to have a fundamental. fundamental bearish view on this like crash scenario unless you have a bearish view on AI.

Well, no. I think we're getting close. Because, well, narrative wise. I don't know. I'm just saying, I'm just saying with Megicap Tech at 25, 30, 10 of the S&P, you really need, that's a big slice of the pie.

That's what I'm saying. So you have to be bearish, because if all these companies are going headlong into AI, then you'd have to be bearish AI to be bearish on the overall S&P. Yeah, not a big leap. Okay. From the debut of the iPhone in 2007 through Q&I. Q4, 2022, Apple generated nearly $915 billion in operating cash flow. Apple is the best example of the ecosystem effect because its platform is both closed and

tightly managed and the company books 40% margins on its hardware, as well as 90% margins on all eligible transactions that happens on its device. So he's got this chart, the most successful company of hit in history, operating cash flow up into the right. So this is probably a trillion dollars now. Yeah. Give it a few minutes. It shows the annual payments by Google to Apple to be the default search engine on iOS.

It looks like Google is paying Apple almost $20 billion for that privilege. And you look at all the mega-cap tech stocks, and they're all just, you know, more or less going vertical at this point. But I think people maybe forget the drawdown that they experienced. I've been pounding this a lot lately. but Google was down 46% in 2022, peak to trough, Amazon, 56%, Netflix, 76%, Facebook, 78%. I don't know if these were generational buying opportunities. You know, it sure seems like in hindsight they were good buy. Again, with the benefit of hindsight, I'm not saying everybody was clamored for them.

But do you remember people saying, like, I can't believe I'm getting the chance to buy Amazon, 56% off its highs? Most of the sentiment was these are going lower. Yeah, and I think the thing we said is that some of these are going to be wonderful buying opportunities and some of them aren't. And I think that that's kind of a cop-out. But that's what's happened is you had Zoom and PayPal and Snap and all these companies that got decimated. And those ones fell 70 plus percent. They have not recovered even more. Yeah.

And some of them might not. But these other ones definitely did. I'm looking at the overall market because you're talking about the drawdowns. So if we look at the overall market, the NASDAQ I think was down 35 at the bottom. S&P was down 25, Dow was down 20. These are now the total returns from all-time highs now. The Dow is 4.5% below all-time highs. S&P is 7%.

The NASDAQ 100 is 9.8%. Total returns. Again, so this is using dividends, so it's cheating a little bit, not too bad. So these, we're fast approaching new all-time highs here. As much as I've been saying that people are underinvested and at some point, you know, managers you'd be forced to chase, just human nature. I don't know, what would the story be if we retake all-time highs? I don't even...

Inflation came down, stocks go up? Yeah, I don't know. I really don't know. Inflation was transitory? How about, well, no, it wasn't. Are you going to make the argument that inflation was transitory? I think it was too long. It was not transitory. No.

We're going to get into the inflation stuff. I'm, I'm slowly but surely putting that take in the oven. It's preheated to 375. Which one? That inflation was transitory. I'm preheating that take. No, it wasn't transitory. We lived through it.

It was a long time. I've got some data. All right, what else we got? But my last thing, the reason why I say, like, what would the narrative be? Yeah, let's just say that we beat inflation without a hard landing, which, you know, we'll say. The narrative is stocks go up most of the time. That's my words to live by. Stocks go out most of the time.

Those are words to live by. But with interest rates where they are, and it's just a great irony. The minute everybody started, the minute everybody wanted cash, stocks shoved it up here, you know what. Funny how it looks like that though, right? Why would I take risk in the stock market

when I could get four and a half percent in cash? Well, this is why, because the NASDAQ 100 is up 30% year to date. This has another dust. You don't wait for the dust to settle moment, right? If you waited for the vaccine for COVID, the stock market was already at all-time highs. If you wait for short-term cash rates to fall,

if that was going to be your signal, the stock market is not going to wait for them to happen. And it's just the stock market is getting ahead of it. All right. So, and again, it's a beautiful irony. And listen, this, maybe we do get the rates higher for longer thing if the economy continues to chug along. But that's the really hard part for someone in cash

is if the Fed starts to lower rates. Like, if we get back to 3% inflation, the Fed lowers rates and you want all cash, and now your cash rates are falling? Then you're up Shits Creek without a paddle. Well, then you just, the anxiety and the worry seems to way, way more. That's not where you want to be. And another beautiful irony is that as soon as like really a crescendo of a cacophony,

if you will, of people talking about, thank you, of people talking about it's only just six stocks, the Riley starts to broaden out. So bespoke said, whereas the largest stocks by market cap were previously the only area of the market to see significant gains so far in June, small caps have massively outperformed. So, L-O-L, as they say. All right, good chart from Bank of America via Coiffin. Bank of America reports that over the past 50 years, the average multiple on trough earnings has been exactly 20 times, excluding the largest 50 stocks in the S&P 500, the index trades

at just 15 times earnings, which is a full standard deviation below the historical average multiple of 18 times. So I ask you this, Ben, are stocks cheap? There's the title of the show right there, I think. All right, do we have another Druck and Miller's quote here? I don't know. The thing is, I don't know, you can't do the X big stocks for valuations unless you're just not going to buy them. Yeah, no, I know. I know, but it's just, it's just makes you think. All right, before we get to the drug thing, Have we seen this yet? As someone asked me, if we, after last week I talked about how stocks outperform

heading into the top 10, how have we not had an S&P 490 yet? It's coming. Don't you think? I would actually love to see a back test on that, how the S&P 490 does. Yeah, that's a good point. I bet the results are pretty decent. Yeah. Well, they have to be because we know what happens after they enter the top 10.

All right. Plain site prosperity tweeted a chart of factors. going back to 2014, value, growth, momentum, quality, low-val small cap, all divided by the SEP 500. And they've all underperformed the index with the exception of growth. And a lot of frustration, it just goes back to mega-cap tech. People, it's just impossible to beat the market when a $3 trillion company just keeps getting bigger. Value investors had like 18 months. Yeah. And not just value, every factor. And so I am sympathetic to, people that just feel like, you know, just throwing their hands up in the air, like, I just can't

be at the market. You know, as it's, I mean, it is hard to be the market, but it's been, it's been a particularly rough 10 years. That's, the realization shouldn't be, I'm going to fight against this. The realization should be, I should own the market. That's where most people should come down. I'm sorry, but it's true. No, no, no. But I'm saying specifically people whose job it is to be the market. Right. I am, I am sympathetic to their plight. It is how many of, I, I remember seeing the studies before of like private or sorry active managers and their private holdings, most of them hold index funds. I think that I think there's a study out there that says that. All right. This is why people love Stanley Drucker Miller. I think my record is as much knowing

not when to play as went to play. And because I deal in five or six different asset classes, I've had the luxury. If there's uncertainty in equities, usually that's a good time for bonds and currencies. Because I guess he was asked a question. I think it was about like an economic prediction. He said, so I honestly, and I hate to not answer your question, I don't see a fat pitch right now. Oh, I guess the question is where is a fat pitch? What I do think is given the change in liquidity, given everything I've outlined, some really fat pitches are going to emerge and say the next eight to 24 months. And I don't want to blow my cash in being in a horrible mental state being down 8% making a big bet on something that I don't have an amazing conviction on.

Here, hang on. Here's my problem with this sentiment. Last year was a fat pitch in tech stocks. no one knew it, no one wanted to own them. The fat pitches are not, are never going to be obvious in the moment. There's never going to be a time where it's like, man, these stocks are so cheap and their fundamentals are lovely. I'm going to buy them. I don't think that happens. You're not going to get the Ben Graham Warren Buffett fat pitches of the 1930s to

1960s anymore. I don't think that that happens. That's true. So anyway, my point is, I think just people, he's just very quotable and it trade us off him as they should for his flexibility. I don't know. Maybe this is, I don't even know why I said this is not a great segment. My bad.

Sorry, audience. You're a drunken miller fan. It's okay. Okay, from the Wall Street Journal, bare market territory. Sorry, I skipped a chart here. Is that okay? Yeah.

Index was in a bare market territory for, hang in. 248 trading days. That meant the SP suffered its longest bear market since 1948, excluding the most recent bear market. The average bear market lasts on 142 trading days. So this was pretty long. Here's... People just think it has to get...

Oh, remember people think it has to get worse always... Everyone was waiting for capitulation, whatever that means. Yes, we have to wait for capitulation. What are you waiting for? Wait to see the wipes of their eyes, right. You're waiting for an 11% down date to say the coast is clear. Give me a fucking break.

But we were just in it. We were, again, just to reiterate that point, we were in a bare market for the longest period. It's just 1948. Like, yeah, it wasn't that deep, but it was long. What more do you want? I guess I get it. I understand. It's just the disconnect between, but wait for the recession.

Wait for the recession. And I get it. It's tough. This market has been really tough. Just because the bear market is over, I don't necessarily think it means it's a new bull market. I mean, yes, that's what I was arguing. That's what I argued is a lot on Friday. I'm going to, I heard you say that with John Noney. So here's my, here's my case against a new bull market. We haven't had a recession yet. The unemployment rate is still at 3% in change. The Fed still might screw something up. And valuations, you say it's cheap are probably still a little on the high side. So that's like, that's like the case if you wanted to make it. So look at this chart I put in here.

S&P 500, average returns by unemployment rate. I did 5% or lower, 5 to 7, 7 to 9, and 9 are higher. And you can see the pattern pretty clearly. If you're below 5%, the returns aren't bad, but they're a little below average. They're a little below average. When you're in an expansion like this, eventually you've got a contracture. The caveat, yes. And the caveat here is 80% of the time the unemployment rate is below 7%.

So that's the fat pitch like, hey, if you just invest when the unemployment rate is 9% or higher, you do amazing. that only happens like five or six percent of the time. So that doesn't happen very often, but I put this out there just to say, like, that's the one thing holding me back, like, geez, the unemployment rate is still low. I guess the counter would be the labor market is what has kept us here, and that's what's going to keep remaining strong, and that's going to keep us going. Someone else replied to me with one of my own data points and said, sure, Ben, you say low unemployment rate is low returns, but falling inflation leads to way better returns.

So I do feel like all of these historical relationships, when you look at this stuff. So I look at this before when inflation is down year to year, average returns like 14% in change. When it's up year over year, it's 5.5%. So much higher returns when inflation is so. But I feel like we've had a lot of these discussions in the last three years of this historic relationship says this always happens and this one says this happens. And now they're going head to head. Which one is going to win? I feel like we're just going to keep having those things. And that's the problem having so much data is your your outcome-based historical evidence can argue with one another.

Well, the pandemic broke everything. And fundamental relationships, meaning fundamental relationships, you know what has held up very, very well? A lot of the data points that I've given from people like Ryan Dietrich, price data, meaning when the SEP 500 falls this much, and then this happens, and then that happens, when you get a breath thrust or whatever, keep a reversal, and then you're higher 12 months later, 100% of the time, those data points have held up. Right.

They have. Yeah. The price stuff, yeah. When I was talking last week and sort of skirting around the fact where, yes, the bear market is over, but I also hesitate to say new bull market has begun. I was thinking about this. It's a nuanced take because if you say we're in a bull market, people might hear that and say, oh, so we're all clear. Oh, so we're in the clear. So there's something to worry about.

And no, that's never the case. You could be in a bull market, but the coast is never clear. There's always something to worry about. And this just goes to the psychological nature of how markets work. Callie Cox had a great post. She said, bold markets rarely feel like bull markets at first. Since 1950, the S&P 500 has bottomed an average of three months before a recession has ended. And if you wait until things feel better, you can miss the beginning of the bull.

Great quote. And one of the things that I had asked. That's a great chart. It shows when the recession starts and when the SEP bottoms. That's good. One of the things that I've asked over the last year and a half is, could this be the first time that the stock market bottoms before the recession even begins? Right. And it looks like that's at least a possibility, or again, or we're going to have one.

I'm going to have one. The other thing is, let's say this is a bull market. Most bull markets have corrections along the way. You don't, most, if it's a crash, that's pretty much the end of the bull market. But you're going to get 10, 15, maybe even 20% bare markets during. a bull market. Like, if it's a secular bull market, you're going to get cyclical bears within them. Well, we had one in 15 and 16. We had one in December 18, I think. So there was a few over the last decade. It is so funny how our conversations changed, though, based on the market. Can you imagine

having this conversation last year? Here's another good one on stock picking, though. This is from JP Morgan. One out of four stocks in the Russell 3,000 has fallen over 75% from 2021 highs. One out of four. So that's the snaps that are still down 80, whatever percent. So the index is this was, this was as of June 8, so it's probably a little stale now. It's on 12. And there's still 25 percent of stocks that fall in 75 percent or worse. I mean, the market is the ultimate arbiter, right?

It doesn't mean the prices are right every day, obviously, but we all have opinions on what might happen, what is happening. But the market is indisputable, right? The scoreboard, the whatever, we are who we say we are. What am I looking for? It's a scoreboard. It is a scoreboard. They are who we thought they were.

Yeah. All right. Daniel, Annulus and annual... West of Peace. That's not a thing. Oh, God. Am I getting old? It's the Vikings old head coach.

What was your name? It's not Dennis Allen? Who's Dennis Allen? What's this guy's coach? Hold on. We're looking it up. They are the bears. They are who they thought they were.

Dennis Green. Who's Dennis Allen? Oh, no. I'm turning into my dad. I'm misquoting people's names. All right, annualized inflation prints by month, month, peaked at... No, it is the end of screen. Oh, I said Dennis Allen?

Yeah. Damn it. Middle age is here for you, my friend. Annualized inflation prints by month. I did a tweet on this again today. 9.06% in June, down, down, down, down, down. 4.05% in May. It's come down, according to bespoke, 11 consecutive months,

which is now the longest consecutive of decelerate months since 1921. Now, whenever I post this stuff on Twitter about inflation, someone invariably come back with me with, well, yeah, the rate of change is coming down, but the cumulative inflation is still up there, which I agree with. We're not going to get 20% deflation to bring us back to prices of what they were before. And I could argue that's probably not a good thing. We're not going to do that. But you also don't have your wages come down, right? People want to have prices go back to where they were, but they want to keep their wages where they are. right? If prices came back 20%, guess what your wages are going to do? They're going to fall that

much too, probably. So your wages are also cumulative, and those are up. No, people's, people's salaries don't get cut. Exactly. That's what I'm saying. Yeah, inflation, but that's one of the reasons that inflation doesn't fall back either to previous levels. Sure, it's cumulative, but so are, yeah, so is what you make. This is another interesting one from Bespoke. Okay, US CPI, the change, for the length that it took to rise from 5.3 to 9.1 was 11 months. It's now taken 11 months to fall from 9.1 to 4.9. So it actually fell faster than it rose. That is surprising to me. I would have not believed that. So inflation is falling faster than it rose. Over 5%. To go from over 5 to under 5 is taking, it's quicker on

the downside. That's surprising, right? Yeah. I wouldn't have, I wouldn't have guessed that. Here's another one. This is kind of interesting. So I plotted on Y charts, the Fed Funds rate versus U.S. inflation rate going back to 1950 something. There's probably not much historical relevance to this, but I just think it's interesting now that the inflation rate on a trillion 12 month is lower than the Fed funds rate right now. So now they can pause?

They have to pause, right? Yeah, everyone thinks. The meeting is tomorrow? One more. I think we, yeah, I think. One more. Oh, wait, wait a minute. I thought it was, hold on, when is it?

June 14th. All right, the S&P is now flat since the Fed began raising rates in March 2022, which is kind of crazy. I forgot that the S&P went up a little bit more after they started raising rates. Here's an inflation question for you. You go to a restaurant, and I'm not talking like a high-end restaurant, a place that has a kid's meal. Right? So we're talking mac and cheese, hot dog, P.B&J, chicken nuggets. And maybe I'm asking the wrong person here because you live in New York.

But how much should a kid's meal cook? Because I have three kids. And so I see this on, like, how much should a kid's meal cost? because I only noticed this when I paid a lower amount this weekend. All right, so like chicken figures of French fries.

Yeah, what should that cost? From where? Like a bar. Like a bar. Like a sit down in a place, that's... I'm sorry. I'm overcomplicating this. I'm sorry, my bad.

All right. I'll give you an answer. Chicken figures had French fries for kids should cost anywhere between $9 and $13. Okay. See, so I went to a restaurant

this weekend that had brunch and they charged $4 for a kid's meal. And I was like, geez, our bill is so low. A bill for a family of fires was $40, and it was like a huge pancake helping. And that made me realize, like, man, we've been paying way more. And I think a kid's meal. $4. What is this in 173? Well, this is Michigan.

I think a fair price is in the $7 to $9 range. I think in the $10 to $15 range for a kid's meal, it's crazy. Because most of the time the mac and cheese is Kraft mac and cheese. Let's be honest. The chicken nuggets are a freezer aisle or something. and then a P.B. and J. or a hot dog or something. So I think anything above 10 is egregious. And I feel like that's where we've been going lately

because I've noticed it on my restaurant bills. But you're in New York, so you probably think $36 is fair. Stop, but I also, we don't take the kids out that much. Yeah, we've been doing it a little more lately. But yeah, the only time I noticed was when it was low, and I was like, oh, that was really low. And my restaurant bill was pretty cheap for once. Duncan, that's a compound survey right there.

What's the correct price for a kid's mail? Although I feel like you gave an appropriate answer, but so did I. Because I'm telling you, I think where I am, 9 to 13 is reasonable. That's what I was figuring. I was doing the New York inflation there. Okay, here's a good one. Percentage of Americans who believe the U.S. is in a recession. This is going back to from May 31st of 2022.

It's been above 50%. It got above 60 at one point, so it's been above 50% since last May. For over a year, 50% of people in this survey, I don't know if this is a survey problem, believe we are already in a recession. They may be wrong. That's 50, 50. Do you think there's some people who just always think we are, though? I mean, yeah, sure.

If you are laid up, you probably think we're in a recession. Yeah, but guess what, 97% of people who want a job are working right now? This is also an environment where you could very easily, make a case for a recession, no recession? For example, if you look at like leading economic indicators, that is strongly signaling a recession. Every time that they're, that they're going down to the extent that they are right now, we've had a recession every single time. The inverted yield curve. You could say it's never been this inverted without a recession. However, and then, I mean, again, it's very easy to support arguments that support, find data that supports your

argument. Ryan Dietrich tweeted this, heavy truck sales continues to increase. before the past seven recessions, we saw us decline well before the recession started. You want to talk about leading indicators of a recession. I'll take this every time. Yet another clue of recession isn't imminent like we keep hearing. So, again, this chart, as I just mentioned, having truck sales fall before. I think the Fed broke the yield curve. I'm totally.

Yeah, I agree. I agree. At this point, like, if you say that's what Cam Harvey said that, if you say the stock market or the yield curve predicted a recession, and let's say it happens in like 12 months, I feel like statute of limitations. Sorry. You didn't predict anything. You were way ahead of it.

All right. Stephen Ratner, incredible chart. Real construction spending. This is manufacturing. This chart sort of resembles the S&P in that it's up until the right with dips around economic pullbacks. But...

Then it went parabolic. I mean, unbelievable. So this is back to the thing of this is whatever. economic growth remaining high, like nominal GDP at five or six percent, and inflation remaining at three with all the government spending. So this is, it shows that the Chips Act and the bipartisan infrastructure bill going to effect. Joey Politano did one of U.S. manufacturing construction spending. Look at that one. That's also up until the right. This thing is,

and it's a huge increase in like computer electrical, electronic spending. I don't know. I feel like probably not many people are paying attention to like the amount of spending that is still going on, even though, like, the money supply stuff is falling. Crazy. But here's another one. Here's another other side. This is from, who is this? Don Miami.

The logistics manager index hit an all-time low, down to 47.3 in May, highlighting a quiet implosion of activity occurring in the freight sector as the economy slows down. Does that just mean that people aren't buying as much stuff, though? I don't know. Just mixed messages. Again, easy to find. find evidence supporting whatever you would like to support. I think, you know, the economy, everything continues to be not homogenous. Different areas of the economy are humming and other

areas are in trouble. And I tend to lean on the stock market for guidance, even though it's not always right. All right. I love stats like this that disprove dystopic or pessimistic people. So Jim Patukas put this out. I think it's from this book, The American Dream is not dead, which I'm going to read just from reading these statistics. What did you call him? I know it's a tough name to say, but how did you pronounce it? Jim Pthusik. Patukas?

Is that right? Pethakukas? I grew up with a lot of Greeks. Not a lot, but a few. It's Pethakukas. All right. And this is not even a hard name to pronounce. You should see some of them.

They get really six syllables deep. Then you start having trouble. All right. Wages for the typical workers are up by a third on a real basis since 1990. 73% of Americans in their 40s have higher incomes than their parents did at the same age. Among kids raised in the bottom 20%, 86%

have higher incomes than their parents. Wow. The stagnating, blah, blah, blah, things are getting worse is anecdotal at best. It does not follow the data. I saw a great, I saw a great, I'm not like a big motivational guy, but I saw a great

Instagram post. It was Barbara Corcoran talking about how she doesn't like to bet on rich kids and she likes to bet on people that came up tough because She wants like a chip on a shoulder. Yeah, just, and you can't simulate hard times. And so this is phenomenal news. Honestly, that's a great soundbite,

but I feel like if you look at most big organizations, how do they hire? Which school did you go to? What was your GPA? Unfortunately, that's stuff people look at. But, but she's not talking about corporations. She's talking about founders. Okay.

Yeah, that makes sense. That makes sense. But that's a great stat. I love it. Say that one more time for the people in back. Good stuff. Which one? I'll say it.

Among kids raised in the bottom 20%, 86% have higher incomes than their parents. Yeah. That's a great. I wouldn't have predicted that. That's great. All right. This is a great thread. I spoke about things returning to normal.

This is really what I'm talking about. Maybe the labor market. This is from Preston Mui. M-U-I. I don't know if I've said that right, but. But quit rates are back to normal. Can we just do a little packed here? First names only going forward. Well, Preston M. Press an M. Okay. Okay. Quit rates are back to normal. Series of charts here. Job switching rates are back to normal. Remember, people were switching because that was the easiest way to get an increase. The job switcher premium is back to normal. That is the percentage of point difference between three much moving average of 12 month median and wage growth of job switchers and steyers. So there was there was charts that we showed.

which is wage growth with job stayers and job switchers. And the spread was gigantic. Basically, if you switch jobs, you got paid. And then, remember the great, was it the great resignation we spoke about a lot? Remember that, by the way? Yeah. Self-employed workers. Everyone was going to start a business, went vertical.

That does not come all the way back. So this stuff all makes sense when you consider, like, the people who were kind of on the fence, like should I leave, should I not leave, oh, wait, I can make more money at a certain point that had to run its course. So that part of the economy is healing. However, Nick Bunker tweeted this, and there's a lot of other people sharing this chart. The Atlanta Fed's wage growth tracker continues to very, very gradually slow down, coming at at 6%. But it's still really high, and this is still a big driver of inflation, like, and spending.

This is not coming down. So this is a good news. So that means wage growth right now is higher than inflation over the past 12 months. Right now it's good. Yeah. But this will, this, you would expect this to come down. Yes. Maybe just not a lag, but that, that's a good thing.

Grubhub laying off 15% of staff. Have any problems with them? I feel like that's the kind of company that you'd have some, some qualms with. Oh, I believe you may. Mr. Mr. No pet peeve. No, I say I don't have personal pet peeves. But can I give you, can I give you an update on, yeah, dude, I tried to order. I actually thought about ordering, I use Seamless,

which I think is owned by Grubhub. And I just can't do it. Like, I'm sorry. The fees, the service, the service fees and the delivery, it's just like, no, I'm not spending $64 for two salads. Sorry. Call me crazy. All right.

So last week, that pet peeve that I had, just a reminder for people that might have missed last episode, somebody emailed me, introducing me. And I don't know why there was like six people on the thread. And I forgot to get back to them. on me, hand up. And so they emailed me again. And they were trying to pitch me something, right? Which is fine. They were trying to pitch me something. And so they responded, hey, Michael, hope, you know, just following up. And they ced everybody again. It's like, come on. I feel like you're like telling me. It's not, it's, it's not email etiquette. So I responded. I'm so sorry,

happy to chat, whatever. Guess what? Ghosted. Ghosted you. Ghosted. Now, I thought about sending another follow-up, like, oh, so I guess you don't want to talk. So then you trumped them by C-Cing everyone else again. No, I didn't CC everyone. I just respond. But I took the high road. I took the high road. Here's a controversial take.

Maybe controversial, but I want to get your thoughts on this. Speaking of emails, I won't call it a pet peeve, but let's just say I don't like this. It's not a pet peeve, but I don't like it. When somebody wants to talk with you and they throw out a date in like two or three weeks, guess what, buddy? I'm not impressed. Oh, you're so busy. No, no, no.

Oh, right, right, yeah. Right? Like, I'm not impressed. It's actually, I'm the opposite. It's a big turnoff. Yesterday, I got an email. Shout to Chris at me, out. Brandon wanted to set this up to see some of their newest products.

And he responded, hey, Michael, have any time later to take today to chat? You're damn right, I do. Yeah, I do have time to chat. So I actually let him know that I really appreciated the same day invite. That impresses me. That's a man of action. You know, when I do the two or three weeks in the future, when I just, and I just don't care. Most of the time.

It's incredibly rude. But that impresses me. I don't think, oh, this guy must have nothing to do because he could talk today. No, I think that guy's a man of action. He's a busy man. He gets shit done. I like it. Next week for more of Michael's email pet peeves.

No, but I just think people think that they're signaling something like positive by going. Nobody's impressed with your schedule. Okay. Okay. So all the crypto stuff about like the, I don't know, it sounds like the SEC is basically going to destroy everything but Bitcoin and Ethereum. I saw Robin Hood as taking Solana off the platform and Polygon. Isn't this just, isn't the end game just that Ethereum and Bitcoin are the only two left standing, more or less? Could be. Will Clemente tweeted Bitcoin's market cap is the largest percentage of crypto's total since April 21. So, yeah. This is, how does it? How does it? Does this always happen? Before the SEC lawsuit against Coinbase was formally announced from unusual Wales. Yesterday, someone opened new Coinbase $50 weekly puts for $107,000.

They were 19% out of the money and expired in four days. These positions are up nearly 2,572%. They turned 100k to millions. How does this happen all the time without people getting in trouble? That is surprising that if you can see these trades happen that they can't just flag them. Oh, you know why? They're not because they're not on chain. Yeah, if they're on the blockchain. I don't know. Ben, last week we spoke about a chart, an incredible chart of global VC capital rates for crypto firms, slow, vertical crash.

And Booger Capital had a great take on this. He said, look at this chart of VC Capital Race for Crypto firms. This is genuinely so fucking awesome and sick and good for society. Like, this should be celebrated. Market realized crypto is literally worthless. Stop funding it. Capital deployed elsewhere. God bless America.

I am not of the crypto is completely worthless camp. However, the point that he just made about the dynamism, and you spoke earlier last week about VCs being like the herd mentality, that's a great point. This is capitalism. Yeah. Once they realize, yeah, it wasn't happening. We're moving out. My friend Justin Protano had another, had a different take on this that I thought was interesting. So he shared this chart, the one that we're talking about. Then he shared another chart showing U.S. VCs are on track to close 2023 with 73% less capital committed than 2022. And then he ends up with the meme. I guess this is from the office, even though I don't watch the office. I know this is from the office. Corporate needs you to find the differences

between this picture and this picture. They're the same picture. So Justin say like, yeah, crypto funding dried up because every fund he dried up, which is a fair point. That makes sense. Fair point. Yeah. You read the Mark Andreessen thing about AI? I did. I didn't necessarily. I think I went in there with an open mind slightly biased against what he was about to say. And damn it, he won. He beat me. He's a lot smarter than I am. You know why?

He's been, he's been, he's been, he's been balder for longer. Here's the part I liked. You have a, you have a better shaped head, though. I'll give you that much. Every child will have an AI tutor that is infinitely patient, infinitely compassionate, infinitely knowledgeable, infinitely helpful. Every person will have an AI assistant, coach, mentor, trainer, advisor therapist that's infinitely patient, infinitely compassionate.

infinitely knowledgeable and infinitely helpful, the AI assistant will be present through all of life's opportunities and challenges, maximizing every person's outcomes. This is, I hope this is what we get. I've been saying, this is all I want out of AI. I want my own personal assistant on AI. So if this happens, great. I want it for you. I'll be happy. I think you're going to get it. But here's the thing. Here's the thing, here's what AI, I've been thinking lately about, this is kind of like the contrarian, like go against the grain thing. The stuff AI won't change. Most of the stuff that makes me happy in life, AI is not going to touch. Like, I get a lot of enjoyment out of being outside on the water, beaches, pools, playing

with my kids, playgrounds, experiences. AI is going to change nothing about that. AI is, like, I enjoy going for a jog or walk outside, going in the wood, like, all that stuff. AI is going to do nothing to touch that. So, like, maybe it'll help at work, but for most of the stuff in my life, AI is not going to have a meaningful change at all. yeah i think i mostly agree with that makes me happy one thing that i'm very much looking forward to and i don't know if this is a 2030 2040 20 never i feel like this will happen being able to

virtually attend a sports game like what if you could sit courtside at the garden and not only watch a game from court side but to be able to like look around and have like an immersive experience well that's the apple ski goggles that's what you're going to get from that right yeah yeah like that that that really that really excited me imagine being on an airplane being able to uh watch a movie as if it's on a hundred foot screen on an airplane speaking of on an airplane i get it i'm sorry but you're if i do i'm never wearing it in public because you look any idiot you go like this well no you're not going to be wearing it on the sidewalk i don't think but on an airplane so uh our travel has increased i don't know if it's permanent or or what but i got a new

credit card because I want access to the lounges because i'm going to los angeles in a few weeks and then i'm shutting it down for a little bit actually robin and i are taking one flight over the summer but then that's it for me and i was thinking as i applied for this new credit card you know when they they go over all your financial information imagine not you're all year they see your income imagine like ken griffin i'm i'm guessing he has somebody do this for him but imagine somebody like an athlete like what's your annual income? Oh, 3.7 billion. I think you're approved. You know what the APR is on an Amex? And I guess probably every card? 19, 20? 27. 27? So wait, which card it gives you the

lounge access? Because I probably have one of them. I just don't know about it. No, you don't. So there's one, I don't. How do you know I don't? I got a new Amex lately. Sir? Which one do you have? I don't know if it's platinum or gold or silver. Oh, you have the platinum? I think I get the platinum. Is that Delta lounge access for me? I think it is. I believe so. So there's JFK Terminal 5. I tried to get in one time and I was, I was shoot and I was quite, not embarrassed, but I wanted access. So I got the reserve card, I believe. I don't know. I just don't care enough to go in the lounges because I'm never there early enough to sit in them. What's the point? I got the reserve. Yeah, the reserve. Well, no, that's a fair point. But now I might change my

habits. So for, again, for my next trip, I might arrive instead of an hour and a half early. Maybe I arrived two hours early. Enjoy some of the perks. I'm a man of the people. We don't, we don't have a lounge at the Grand Rapids Airport. So you get in the flyover states. All right, Lance Lambert. Wait, wait, hold on. Sorry. I, I, let's say, I just want to say one more point about the A thing that stuck out to me. Okay. Because in the post, Andresen dissected the common arguments for why AI won't do what the people say. I thought his social media stuff about this is going to make things worse. I didn't agree with that argument. That was the only part that I said, get out of here. Not buying what you're selling. All right. AI, if allowed to develop and

proliferate throughout the economy, may cause the most dramatic and sustained economic boom of all time with correspondingly record job and wage growth. The exact opposite of the fear, and here's why. The core mistake of the automation kills jobs doomers keep making is called the lump of labor fallacy. This fallacy is the incorrect notion that there is a fixed amount of labor to be done in the economy at any given time and either machines do it or people do it. And if machines do it, there will be no work for people to do. That's, right, that is a very common belief that people have, that there's a finite amount of jobs. Andresen says the lump of labor fallacy flows naturally from naive intuition, but naive intuition here is wrong. When technology is applied

to production, we get productivity growth. An increase in output generated by a reduction in inputs. The result is lower prices for goods and services. As prices for goods and services fall, we pay less for them, meaning that we now have extra spending power with which to buy other things. This increases demand in the economy, which drives a creation of new production, including new products and new industries, which then creates new jobs for the people who were replaced by machines and prior jobs. The results is a larger economy with higher material prosperity, more industries, more products, and more jobs. I think this is directionally right. Now, obviously, I agree with this.

It's very complicated. People will definitely be displaced. But if we look at the pie instead of just the parts of the pie, I do believe it will grow for these reasons. I really do. We have a dynamic economy. I totally agree with this. That, like, it's not just that there's a fixed level of jobs. And if robots take some, that they're all of a sudden gone.

We create new jobs. Last take on thoughts from the Apple headset thing. Ski goggles. Ski goggles. Why don't they just buy Disney? Yeah, I agree. I'd be fine with that. It makes sense. The Apple TV Plus thing is so niche. I agree. Do it. All right, Lance Lambert. Home prices are probably going to rise this year. So far, National Home Price Growth in 2023 looks like, well, a normal year. Home prices are, so we had a minor fall. Home prices are basically rising again. And through 2023, they're up. They fell in 2022.

Mike Zaccardi, who always provides us good charts for this show. for the first time since 2014, boomers are buying more homes than millennials. 40% of boomers between July 2021 and 2022 were buying houses, and millennials are only 28%. I think that's- Duncan is saying that Sapphire, sorry, cut you right off,

Sapphire Reserve gives you priority-pass lounge access. Yes, but not to the lounge that I'm referring to in JFK Terminal 5. I got the priority pass card. They sent it to me. I have no idea where those places are. What is that? The priority pass?

I don't know. They give you a card that allows you access, but I've never been in an airport that actually has one. Or it's in the wrong terminal. I'm sorry, the lounge stuff is overrated. I think the boomers is the... It's not overrated. You're just salty because you don't have one in Grand Rapids.

It's properly rated. Because I get to the airport, like five minutes before my flight's going to take off. I don't have to sit there for an hour and a half. Because you live in Grand Rapids. That's a luxury. True. As the official May housing data trickles in, this is from Rick Palacios,

the divergence between new home and resale market is even more glaring. May new home sales are up 18% year over year. And I guess Zillow actually said existing home sales down 18% year over year. Look at Pulte, D.R. Horton, Toll Brothers, Lanar, we've been talking about this, all at new all-time highs. All these NVR, I think is, too, the home builders. Just a weird, weird market that seemingly would not make sense. But I think home builders are really the only game in town right now since existing homes fell off a cliff. Robin sent me a home yesterday

in our town that I can't remember what the price was 850, whatever for like a really a house that should like a real not a big house, old you know

yeah it's crazy there's just still no supply yeah but I think now that home builders know this for a while they were offering incentives I think now they know this and they're jacking prices up and it's going to be more expensive to buy from them, too. Are these stocks up like 70% on the year?

I don't know that much, but they're definitely outperforming the market. So Pulte, for example, is up 61% year-to-date. They're definitely outperforming. It's freaking June. Yeah, not bad. All right, Ben, the other day, so I posted on Instagram a box of my AirPods, and I said, we meet again. I lost my AirPods in...

What number are you on? I just got some new ones, too. I'm on number four, I believe. Honestly, I feel like eight. I don't even know. Okay. I've got some cheaper ones to get me through as well that they can find out of my knockoff.

Somebody on Instagram told me to get this. I've had this case. I've had this case. But now, sir, I've got a clip. I've got a clip. To clip it? You lose the case itself? I lose it all.

I've lost individual buds. I've lost them both. I've lost the case. That's not going to solve your problems. You're going to lose the case with the carabiner and that's not going to help you. With the what? What word did you just use? The carabiner. That's the hook thing. Oh, that's a great word. So anyway, listen, I'm trying, I'm trying to play. Not to brag, but I've done some high ropes courses in my day. Ah, okay. Oh, that's what this is. So yeah, I tend to lose them in the Uber. That's where they, that's where they go to die. Okay. So you're going to hook it to your belt loop?

Total dad move. Not like, I don't, no, not a belt loop. That's, come on. That's crazy. What are you to hook it to then? book bag. By the way, is book bag a dated word? Yes. Also, a lot of people also said, you calling a grill a barbecue was total New York thing. Okay. So, two things. Bookbag is an old thing, I guess, because Mike, when I say, Kobe, get your book bag. He goes, what? Like, your backpack. Yeah, backpack. Barbecue. Yeah, I do call it a barbecue. I guess it's a grill. I got a lot of feedback on that. So thank you, everyone. I knew that water wasn't the right thing to do. And to be clear, I didn't dump like a bucket.

You know, because in my back, my dad, I was like, wait, you shouldn't pour water. It sounds like everyone thought you had a grease fire. I think that's what it was. So I took the try out and it was loaded. So I got baking soda or baking powder. Is that the same thing? Yeah. So I got that because that's what you're supposed to use to put out of fire.

I cleaned the grill. Lesson learned. Thank you, everybody. What was I going to say? Oh, speak of like things that like are old phrases that we don't say anymore. and to think about, like, how great capitalism is, I was watching Happy People, which I thought I liked that movie, but... Happy People are Funny People.

Funny People. Oh, my God. I really am turning into my dad. This is awful. This is horrendous. It was 45 minutes too long, but I liked it. This is horrendous. I'm upset.

But anyway, they referred to TVs, as we all did. And Funny People is from 2009, so not a million years ago. They called them flat screen TVs, remember? Yeah. Got a new flat screen TV. That was the thing. You know what we call flat screen TVs now? TVs.

Yeah, that's true. I did, yeah, I did like that one. Oh, the reason why I brought up these AirPods, same day delivery, I ordered these in the morning. They were there in the afternoon from Amazon. How is it even possible? I got like magic. It honestly, I was like, they came in the rail and said, ooh, what? So, okay.

Netflix, check out this chart from the Wall Street. Journal. According to streaming company Antenna, Netflix amassed more new subscriptions in the U.S. between May 25th and 28th, shortly after Netflix notified uses of the limits, than in any other four-day period since Antenna began compiling such data in 2019. How crazy is that? This is when they took the password sharing away? Yeah. That makes sense. People are hooked. They can't give it up. No. The stock has been doing great. And it's funny. Upgrading. are nonsense unless it's about your stock. Right?

They always work. Upgrades are silly unless it's about your stock, then you feel good. So for example, I saw this morning Bank of America on Netflix. If we assume slightly over 60% of password borrowers in the US are converted, we estimate password sharing could represent a $2 billion incremental annualized revenue opportunity, ups our price target from 410 to 490. The stock is at 430. I'm like, yes.

However, this is the dumbest upgrade ever. Well, that's not true, but this is a silly upgrade. Here's why. Why would they assume slightly over 60%? Isn't that such a random? Yeah. Right? Why not a slew?

It worked well with their discounted cash flow analysis spreadsheet. Why not assume 20%. 60 is a weirdly high number. And not just 60, slightly over 60. Okay. All right. One more thing in terms of like oldism and how good kids have it these days. So it's on Instagram.

Before Google, someone would tell you this dude was Marilyn Manson and you just had to accept it. This is a picture of, is this a kid from the Wonder Years? Yeah, Paul, right? From Wonder Years. But how, but so true, right? This is like a rumor. Whenever somebody said something, you just had to either believe them or say, I don't believe you. Arguments just never got solved.

Arguments never got solved. So this is embarrassing, Ben, as we transition into recommendations. On Sunday morning, I was up. at 10 to 6, which is too early. I don't know why I was up, but I was up. And I threw on Amazon, and I saw that Creed 3 is now available for streaming on Amazon Prime. But I said, eh, can't put it on too early. Robin's going to wake up.

And you know what I did? I know this is like not a discovery, but it's new to me. I threw my AirPods. Actually, my Bose headphones, to be specific. Oh, connected to your TV? and it was a it was I can't believe where have I been how come you didn't tell me about this how often do you actually are you actually in an environment where you need to do that though when I watch thousand times no when I watch TV either when Robin's sleeping okay that's not bad

so I watched creed three I watched two weekends two movies this weekend both entirely predictable plots that were very enjoyable to me so creed three I enjoyed it Quite a bit. Obviously, I think it goes to that same. I gave up after Creed 1. Okay. We're not on the same page with a lot of movies, but that's fine. I'm a huge Rocky Stan.

I am too, but after like 12 of them, I'm sorry. No, you're not. No, you're not. I gave up on Rocky after number five with Tommy Morrison. That one, for me, never happened. And then remember there was the one where he was like 60 years old and got back in the ring to fight again? I mean, some of them were pretty bad.

Agreed, Rocky Bell Bo. Didn't happen after Rocky 4. All right, I, contrarian, I'm going to. to Zach here. I like Rocky Five. Oh, whoa. That's like the worst movie take. That's worse than Sean's movie take of having Black Mass in his top 10. I've never, ever, ever heard anybody say I like Rocky Five. In fact, I've only heard people say

that fucking movie is horrendous. Guess what? It's awful. Guess what? I liked it. Never should have been made. Sorry, not sorry. So anyway, yeah, Creed 3 was very, you know, it was how they all go, and I enjoyed every one of I also saw another movie that Robin was watching with me and sort of laughing at me and this is why you watching this. It was the Pope's Exorcist

with a little guy named Russell Crow. And all... Seriously? All demon movies go the same way. All Exorcism movies go the exact same way. Right? There's a house or a castle. Kids possessed.

Call the Exorcist. Exorc comes in, gets the demon, blah, blah. Stuff goes weird. Yeah. Very formulae. I'm a formula guy, right? Okay, so was it a great movie?

No. Did I like it? Yeah, I did. And lastly, here's my, so, so. Your bar is pretty low if you like Rocky Five. True. This I genuinely enjoyed. As I said last week or a couple weeks ago, I love Arnold.

Who doesn't? I feel like we all love Arnold. It's the most American man ever, even though he's not American, just represents everything about hard work and discipline and. and executing and no excuses and going after your dreams and all that good stuff. There was a three-part documentary on him on Netflix. It started as like Art of the Bodybuilder,

actor, then part three politician. Very revealing. And I just love that, man. Okay. I don't really have any recommendations. I've been, we've been finishing up spring sports, and I've been outside. And so I only have one take for this week on recommendations.

Roman Handwin at the end of Succession, the very last scene of his, and then I rewatched the new, that Bond, the rewatchables on the Casino Royale, which is, I think the only good. Wait, wait, wait, I'm sorry, lost it. Roman had one? A martini. I'm getting, so, and Bond is drinking a bunch of martis. My take is martinis are so overrated, but the glass is so cool that people think they're awesome. If you had a martini in a regular glass, you'd think this is gross. Why am I drinking this? But because it's in such a cool glass, like, if you had another kind of drink that was in a martini glass, you'd think this is a really cool drink.

So you're not wrong. You're not wrong. Although, I mean, I like martinis because I like vodka. Although I know some people do gym martinis. But there is something to the glass. It's not just for a fact. The way that like the liquid comes out of the drink. Oh, come on.

No, no, no, no. This is a hundred of the fact. Someone got in your head. No way. Dude, if you drink vodka out of just a paper cup. That's what I'm talking about. It's the look. You're talking yourself into this.

It's the look of the glass. I don't think, no, I think it's not, it breathes more if you just, no, it's not, no, I think it's just, no, I think there's functionality to it. It delivers a better sip. How about that? Yeah, because you can gulp it down in one sip. That's why. Eh, fine. Sorry. Maybe, maybe my mind is playing. The martini glass is like one of the best PR things in history. That's all I'm saying. So I think that it's functional, but you might be right. Maybe, maybe they gaslighted me. Could be. Oh, I'll pat myself on the back a little. I had a good call last. last week. Universal and Illumination are close to signing a deal to make a legend of Zelda movie. If you remember last week, that was my prediction. Thank you very much. Nailed a bit.

What else, Ben? Anything else? No. Send us an email, Annel Spearspot at gmail.com. See you next time.