Animal Spirits Podcast - Bear Market Math (EP.280)

Episode Date: October 26, 2022

On today's show we discuss the slowing housing market, taking Animal Spirits on the road, why consumers keep spending money, how the stock market moves during a bear market, some optimism for a 60/40 portfolio, why the 4% rule is still alive and well, a bunch of movie recommendations 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

Today's show is brought to you by Y Charts. We just got data that S&P home price index fell 1.32% month over month. Year over year prices are still up 13%, but this is the biggest monthly decline since 2009. I'm looking at this K Schiller month over month chart in Y charts and tells the story beautifully. Picture says a thousand words. You ever hear that one? I would be more worried if a couple of times. a couple times.

I mean, shouldn't it be more like a picture tells like 50 words these days? Keep it short and sweet. I would be more worried if housing prices weren't falling over right now, rolling over. If they weren't falling, I think something else would be seriously wrong. I got an alert on my phone. We're going to talk about home prices in my neighborhood on the show today. I got an alert to my phone this morning. A home was listed under $600,000.

Don't know the last time I've seen that one. Okay, good thing. You'll need mortgage rates to fall in half to make it make sense for people. But I guess this is a step in the right direction, at least for people who are trying to buy a home. If you want to be able to tell 1,000 words with your charts, go to our friends of Y charts, tell them Animal Spirit sent you, get 20% off your initial purchase.

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. Michael Battenick and Ben Carlson work for Ritt Holtz 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 Ritthold's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain positions in the securities

discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. I was just alerted just here, just right now before the show started. By the way, it's Tuesday, October 25th, 917 in the morning, Eastern Standard Time. Last week, Ben and I did the show. I was remote in Boston. and I couldn't see Ben, not even a little. Literally, my camera was turned off. It was a bit of a challenge, but as a professional, we powered through. And so I was told that a lot of people in the comment sections, is Michael even paying attention?

Yes, I was. I was paying attention. But there was nothing for me to look at. So if you saw my eyes wandering, it's only because I was staring into the void. So I just wanted to clear the record. I said the record straight. I was paying attention. Credit to you.

All credit to me. Thank you. the road quite a bit last week. So we want to start today's show with giving some travel thoughts. My first initial read on being on the road for a couple days, the airports everywhere were packed. I have a regional airport here in West Michigan, so not a lot of straight-through flights and went to Boston and Fayetteville, and every single airport I was at was slammed. There was barely any parking spots at the airport here. They give the little signs that say number of parking spots. And one of the parking lots, like hundreds and hundreds of spots, and there's like four

spots left. And I'm beginning to think the stock market is down 25%. People are still spending a ton of money on travel. And it didn't seem like it was... Is the stock market gaslighting us? I'm saying maybe the wealth effect is bullshit with a stock market, though. When you go out and you see all these people spending, so we were at like the apple orchard, pumpkin patch, whatever this week, the petting zoo farm, and it was overflowing with people, just spending gobs of money. I don't think people care that the stock market is down. Let me ask you this. Street fairs. A scam or a total scam. So every few weeks in the fall, my train station closes down and they've got these street fairs. And every time I spend over $100. It's completely absurd. How much money do you think those

things raise? What do they sell at a street fair? Like food? So at the street fair, they've got a few things. They've got rides. They've got games. And then they line the street with chotchkes as far as the I can see. Okay. Yeah, just stuff you buy and then you throw away the next day. Those things are totally recession proof. So that's a good point. Or maybe it just takes longer for things to filter through. talked, there are going to be like this huge making up for lost time for travel. And we talked about this months and months ago. And I think we assumed it would peter out. And it certainly hasn't. I talked to some friends this week at a party. They said they went to Disney. It was packed at capacity every day. And they said they had a friend who tries to go in October every

year because it's off season. And they said they tried to book a resort at a park this month, kind of last minute. And every single resort on the Disney grounds was sold out. Do I have a quote for you? Yes, I do. This is from the transcript. They quoted the United to airline CEO. He said there's been a permanent structural change in leisure demand because of the flexibility that hybrid work allows. With hybrid work, every weekend could be a holiday weekend. That's why September, a normally off-peak month was the strongest month in our history. I do think that there's something to that, the remote work where you can work from anywhere, quote-unquote work if you're on vacation. I think there is something to that where this travel

think could have legs. American Express reported earnings last week, and the CEO said card member spending remained at near record levels in the quarter, led by the continued strength in goods and services spending and the ongoing strong rebound in travel and entertainment. As we said earlier this year, we expected the recovery and travel spending to be a talent for us, but the strength of the rebound has exceeded our expectations throughout the year. Look at this chart shows the U.S. consumer build business, and we're looking at goods and services versus travel and entertainment. In Q3, 2019, right before the pandemic started, they spent $31 billion on travel and entertainment. In Q3, 42 billion, up to 31. So here's the thing. Everyone, literally everyone

thinks a recession is coming and no one is acting like it. Everyone wants to talk about there being a recession and there's going to be a slowdown and the Fed's going to cause this and consumers don't care. They are still spending money. So here's the analogy, my brother actually gave this, me what I thought of this? I'm going to steal it from him. He said, what if it's like a drug addict or a drug dealer that gives you a hit for free, then doesn't give anything else and makes you want that second hit? What if that's consumers with spending now? They got all this money from all the fiscal relief from the pandemic. And do you think people are all the sudden just going to stop on a dime and stop spending? I think any excess savings

people built up, if we're talking in aggregate, they're just going to spend it all. Whether it's inflation or recession or whatever is slowing things or whatever the impediment is to people, people, people are going to spend any savings that they made during the pandemic because it's going to be hard to tell people to just stop. Oh, okay, we had all this extra money. Do people stop spending because we're in a recession or does people stop spending or so long their spending cause the recession? Checking the wreck. But don't you think it's going to have to be something like unemployment to stop people from spending? I feel like people aren't going to buckle down just because interest rates are

4%. Just because some guy in CNBC says, hey, there's a recession coming. Are people going to all of a sudden stop spending money and traveling? I don't think so. Good point. It's about income, income and employment. That's it. Ben, let's get into some of the, just a few little nuggets, a few little insights we gleaned or observations we had while we were on the road. You had a great point. We were walking into the graduate hotel in Fayetteville, Arkansas, which, by the way, did that exceed our expectations, Fayetteville, Arkansas? I'm bullish on Fayetteville as a mini Austin. Like, if you want to live in a place like Austin, college town, nice, outdoors, great weather, but you don't want to pay Austin prices, I am bullish on Fayetteville, Northwest Arkansas. Arkansas. That place, I was blown away. I thought it was great. College town. So that's where University of Arkansas was. It's where the beyond meet. Was it the COO? CEO? That's where the nose-biting incident happened. Oh, yeah. We had a nice little time. We rode some scooters around the campus. We did write scooters. Didn't feel old at all, riding a scooter around college kids. How do you do fellow kids? So, Ben, you made a good point as we're walking into the hotel.

Why are a revolving doors a thing? First of all, why do hotels ever dopping doors? Because you're carrying a suitcase, and then you've got to try to fit it through the revolving door and try to not get it stuck. There's basically no room. So I don't know why revolving doors are a thing. I'm sure there's a reason for it. I don't know why. You told me that you saw a movie shooting in an airport and you wanted me to guess who the act world.

You still didn't tell me who it is. Because I got in after you and I saw all the lights and stuff and they were taking it down. I landed in the airport at, speaking of airports, I've done this thing in New York airports are just the worst place in the world. You can't get there early enough. We were at a fidelity event on Tuesday. And Logan Airport, major airport.

I did the TSA pre-check. There's one person in front of me. Could have got there 10 minutes before my flight. It was wonderful. It was easy. New York had to get there like five hours beforehand. All right. So I got off the airplane at around 10 o'clock at night in Arkansas.

And as we're walking, there's like a bunch of people inside. And you hear you see a bunch of people doing this like that. And what's going on? Me? Me? They said we're shooting a movie. So it was like a real thing like haranguing everybody because some people didn't want to be violent. Some people did the fake AirPods.

I can't hear you thing. Kept walking. So they were shooting a movie. And it did get quite annoying. Some people had to catch their connecting flights. Anyway, like all of a sudden, you hear, and cut. And they let us all go. And I walked past an actress.

She peached in the 90s. On TV or movies? Movies. I'm not talking like a Julie Roberts kind of thing here, are we? In that same time for him. I don't know that she was competing with Julie Roberts for roles. Maybe she was. I got nothing.

Nothing at all. I'm thinking like Meg Ryan, Ashley Judd. Boom. Ashley Judd? No, Meg Ryan. Oh, Meg Ryan. Oh, really? Meg Ryan's back in the game.

Yeah, I'm like 94% sure I was there. Okay. I put when Harry met Sally on for a little bit on one of my flights because there was just awful movies. That's another part. Two or three people I heard ask you, hey, how was your flight? And you said, my flight was awful. And they said, oh, why? What happened?

Did you stuck on the runway? Did you get delayed? No, I just had terrible movies on my flights. That was what made an awful flight experience for you. Thank you, American. There's no screens on the flights anymore. No screens on the flights. So I did the Gogra in flight, which never works, never ever works.

So what did I watch? I watched 2018 Halloween for, like, the eighth time, which, by the way, the 2018 Halloween was great, and then ends and kills were just terrible. It was so great. You bought a T-shirt for it. So that was bad. This is weird. Tell me this.

I sat in the exit row because you got like six inches more of flex space, and you want that leg space. The guy next to me had the... I'm short, so I don't really need it. Oh, by the way, people who have been dunked on you and our pictures for you being short. I feel like you don't come off as short. Are you 5'8? Yeah.

Yeah, sorry, I have a tall appearance, not to brag. but then's not short, back off. A lot of people said they were surprised at how I'm average, right? Is that average height? Yeah, slightly below. No, I'm short. I don't care. So the guy next to me asked, yeah, do you mind if my friend sits next to switch or

they're right over there? And that's an awkward. You know, you spend extra money for the seat. You know, I spent extra money for the seat. Why are you putting me in that position to say no? So I felt weird, but I said, sorry, I paid extra for the seat. Go back with them. I think that's fair to say.

Someone asked me to switch to a window seat, and I'm an aisle guy. I need the aisle. I have a small bladder, and they asked, and I said fine because of husband and a wife, but I don't think you can do an aisle to window switch. I don't think that's fair. No. And so we were walking down the street, and somebody did that look where, like, they think they know you. And as podcast celebrities, we've gotten that look before.

So ladies were walking to the street, did that look to Ben. And she goes, has anyone ever told you you look like Orlando Bloom? And I said, I get that all the time. Yeah, that was the best part. Without skipping it beat you said, I get that all the time, ma'am. She said, no, yeah, yeah. I've never gotten Orlando Bloom before, but I guess. I'll take it. Anyway, we had a good time taking animal spirits on the road. We met a lot of

people and listeners that we saw. So thanks, everyone to come out. We had a great time on both events. All right, let's get into the market. I did a little thing here on daily moves of one percent or more. So plus or minus, basically big moves. We've talked about this in the past. Volatility tends to cluster. You can see 2020 actually has a little bit more, but I think we're going to beat it. So this is as of last Friday. I think we had another 1% move yesterday. The crazy thing is, so we've had over 101% moves this year in either. direction. But it's basically 50-50 between up or down. I think I figured it out it's like 53 down 1% or worse and 49 up 1% or worse. So it's not like all of them have been down.

You can see this next one I put the number of like 2% moves, 3% moves, 1%. They tend to cluster around really big drawdowns, obviously. We've talked about this in the past. I think this is why people make mistakes in bear markets because it's constantly giving you head fakes and competing signals. Whether you were like bearish or bullish and you change your mind, I feel like that's why bear markets are so confusing to people. And one of the reasons why they get people into trouble is because it's easy to get out and it's very difficult to get back in. Or if you do get back in, you get stopped out with the bear market rally. And not having a process for getting back in, not having any rules, just makes it almost impossible unless you just get extremely lucky.

I know that this bear market could obviously always get worse. It's, I mean, you think, about it, even like the 60s, there was a bare market worse than this, the 70. I'm taking out like the 50% crashes, like 7374.com, 2008. There's other ones that have been worse than this, like 30% plus. But look at this, some of these household names, looked at this as of yesterday. Facebook's down over 65%. Tesla's been cut in half. Invidia's down 65%. Disney's down 50%, Nike's down 50%. Netflix is still down 60% even after you missed the rally, which if you miss the YouTube video from last week, you've got to watch that. Michael talking about not wanting Netflix to go up 15% after earnings, which is exactly what it did.

It was just perfect. I got a lot of enjoyment out of seeing you watch the Netflix earnings come in and realizing you'd gotten stopped out the week before. You know the oof size on that? And Amazon down more than 40%. So my point is, yes, this could always get worse, but these are some really big household names that have been cut in half or more. There's been a lot of carnage here.

We've mentioned this before it's worse under the surface but if you have these big, huge blue chip names and it's kind of crazy that you could say some of these tech stocks are blue chip names now, but they are. So my question is this, you'd pick a basket of these well-known stocks

down 50% or more. Looking out five or 10 years, what are you betting on that? Those stocks are the S&P 500. I'll take these stocks. Would you really? Oh, yeah. No question.

Maybe. I shared with you and Josh the other day the John Temple thing. Remember after World War II, he bought like all these stocks that were trading below a dollar and that was like one of the things that made him a famous investor because a few of them went bankrupt, but a bunch of them

ended up making him a ton of money. I do feel like if you tried to pick one or two individual stocks right now, you could easily pick the ones that are never going to come back. But if you did a basket of stocks down 50% right now, let's time stamp this and come back to it in five years. Well, well, I'm talking about a basket of the blue chips that are down 50%. I'm not talking about... Yeah, that's what I'm saying, not just randomly, but these are legitimate blue chip names down 50 or 60%. I feel pretty confident that assertion that five years from now, this basket of stocks will outperform the market. Could be wrong, of course.

All right. So the 60-40 has been buried like six times already this year. Dead and buried, people have been pouring out liquor on the grave. It's been dead for a while now. Jeffrey Dahmer dug up the body. Sorry. So it's a really bad year. DFA has this thing showing that this, well, this is a bad year.

It's not quite the worst year ever. There have been worse results like draw down top to bottom. The 1930s, 1940s, 2000s. This is like top to bottom, not just good or bad years. But then they show in the next one, forward-looking returns for 60-40 after 10% declines. Next 12 months is like 8%, which is probably a little more than average. Three years is 17%, five years is 37%. I do think people saying the 6040 is dead, I think because this move happened so fast in the drawdown and rates went up so fast,

I don't think people realize how much better the prospects are going forward from here. I think it made more sense to say the 6040 is dead in 20. 20 or 2021 with the 10-year less than 1%. Yes. I don't think you could say it's dead right now. In fact, its prospects have never looked better. No, that's not true. Its prospects haven't looked this good in a long time.

But you remember probably 12 months ago, there was other articles saying the 4% rule is dead. So if you look at U.S. government bond yields now, I just pulled this up this morning from Bloomberg. The three months to the 30 year, every single government bond deal for the U.S. Treasury is above 4%. You could probably build a tips ladder right now. Tips yields are over one and a half percent. So if you add on anything above 2%, 3% of inflation,

you're probably getting an inflation-adjusted 4% yield on tips right now. So like the 4% rule, obviously you need that inflation kicker because it's not just going to be stable if you put all your money into bonds. You need some sort of risk. But the prospects for a retiree portfolio now or some sort of asset liability matching is better than it's been in probably 15 years. No doubt. Gina Martin Adams tweeted that the S&P 500 is now trading at 17 times trailing 12 months. Now, you might say that's still too high. Okay, fine. You might think that earnings are going to fall. This is even high. Okay, fine. But it was more than 30, 18 months ago. So the market has corrected some of the excess, a lot of the excess. Over the past few weeks and months, we've spoken about outflows out of fixed income mutual funds. The FT did a big piece showing that the rise in assets or the the assets of AGG, which is the I shares bond index versus BND. They're basically the same

thing. It's like a total bond market index fund. Yeah. So the assets of their management and BNDD have almost like the gap has closed. There was a lot more money in AGG. The gap has closed. Why? Because Vanguard investors don't tell. They just keep buying. So they said that US investors have redeemed money from fixed income mutual funds for the past seven months to the tune of $305 billion. dollars. And they say, while much of the selling was simply investors looking to cut exposure to the bond market full stop, some may be fueled by investors having a rare opportunity to sell mutual funds and rotate to cheaper ETFs. I feel like someone on this show said that said something similar last week. Yeah, I'm saying. They said this in turn may have disproportionately

help BND, quote, this from Todd Rosenbluth, we believe there's been a trend to taxless harvest money away from more expensive bond mutual funds. This loss has persisted. Vanguard has been a greater beneficiary of this due to a strong brand with mutual fund investors and their advisors. If we're talking collectively, do you underperform yourself or make mistakes or do you make unnecessary mistakes? I think Vanguard Vanguard investors as a whole are the best investors on the planet. We're not talking about like sharp ratios and alpha and hedge funds, but if we're talking normal investors, there's no one in the same ballpark as Vanguard investors. It's Vanguard and Doge investors. I would put them in the same category. We got some ugly data yesterday. The headline flash USPMI composite output index registered

47.3 in October, down for 49.5 in September. With the exception of the initial pandemic period, the rate of decrease was the second fastest since 2009. Here's a quote from the chief business economist at S&P Global. He said the U.S. economic downturn gathered significant momentum in October, while confidence in the outlook also deteriorated sharply. The decline was led by a downward lurchase in services activity fueled by the rising cost of living and tight-in financial conditions. clearly this is unsustainable. Anyway, you get the point. This is not great, but it's bad news, good news. So this is the opposite of what we said earlier about people still something. Do you think, though, that any downturn could be led by just slowing of investment by corporations because

their hurdle rate is so much higher for investment? And then that would be the slowdown as opposed to consumers pulling back in a big way. Businesses are pulling back in anticipation of a consumer slowdown. So that's what I'm saying is that businesses will be the one to lead the downturn and consumers would be the last ones to fall. Is that possible? Is that possible? just throwing it out there. Okay, why is it called a flash PMI? It's just like a really fat... Here it is.

Here it is. Why is it called a global flash PMI? Oh, you had a great idea today. I was just reminded, whatever. You had an idea. The other week, we were on a long Zoom. Like a very long Zoom. It was like a 50 minute.

And it didn't need to be that long. And we were watching a presentation. And Ben, why don't you lay out your idea? I think it's genius. I think this could get Zoom stock out of the toilet. I slacked you. and I asked you about something. I said, I don't know about this.

And you said, I'm sorry, stop paying attention to 20 minutes ago. And I said, well, what if we did like the movie Speed? Remember when they, Dennis Hopper was watching the bus from a camera, and then they put in a tape that showed Keanu Reeves and Sandra Bullock on a loop. It looked like they were driving the bus while they were really getting people off the bus. And that's what they should have on Zoom. You should have a button to push that just shows a loop of you every 30 seconds, just paying attention intently.

I really think that that's a genius idea. How much is this? Zoom's down 85%. I feel like that can mark a bottom. All right. Let's do it. Call us Zoom. All right, Matthew Klein had a good one on inflation. And his whole thing was why inflation is saying hi. Now, I realize that confirmation bias is a hell of a drug and you shouldn't do it very much. But when people smarter than me share the same ideas with me, then I think confirmation bias is just fine. I don't think it's a big deal. So one of the things that he's talking about is the reason that inflation saying high is margins from corporations. According to the BEA, after tax profits generated by the U.S. operations of non-financial companies in 2022, Q2, we're 38% higher compared to 2019 Q4. In fact, American workers have been paid a slightly smaller share of the total value generated by corporations since the start of 2021 than they were in the years before the pandemic. Basically, meaning a higher share of everything is going to corporations and not

necessarily workers. And that's one of the reasons that inflation is staying high because corporations are doing way better than they say they are. Those jerks are hoarding profits. Correct? I feel like there's a tipping point, though. Like there's only so much cost that these companies can pass on before they start to cease significant deterioration. But that's the problem is people had all the success. Chipotle, for example, Chipotle, sorry. I'm out. You've given up like 12 times. Come on. Let's be honest here. Every time they increase here, I'm still getting Chipotle.

The last time I got Chipotle, it was 1490 or something. I said, that's it. I'm washing my hands at Chipotle. What should Chipotle charge? That's fresh-cut meat. I still think it's a pretty decent deal. It is weird how you get selectively cheap. I feel like $12.50 wouldn't bother me. But then actually $2.50, these people are dead to me. Then you'll pay like $30 for a Manhattan when you go out and get a drink in New York.

Like, yeah, that's fine. All right. Did you put this? Well, it's your journal one in here? Is this me? Okay. They had a story about how higher interest rates can take a while to bring inflation down, which we've kind of talked about.

Like, what if the Fed is doing all this stuff and it's on a huge lag? So the IMF said this month that interest rate changes have their peak effect on growth in about one year on inflation three to four years. So when Volker took office in the summer of 79, he pushed rates about 20%. It brought an immediate recession, but it took inflation three years to fall to manageable levels. So the point is,

it's going to take a while for inflation to slow, and it's not going to happen right away. They're like a blind man in a journal. That's a line from Naked Gun. We spoke by Naked Gun last week, yeah. Okay, all right over my head. All right. People have been talking about how the Fed

is like an influencer these days, and that makes sense. So there was a story in the New York Times about how James Boller, the president of St. Louis Fed, spoke at off-the-record event for Citigroup, open to clients, and it was closed off to reporters. Usually, I guess, someone at the Fed talks, reporters should be there so everyone can have the information disseminated to them. I think that there is a problem with the Fed people probably understanding how much power

they wield right now. And I think it's probably only going to get worse where people on the Fed know that they can be a celebrity because after the fact, then they can go and earn huge fees from Citadel, and all these other huge hedge funds and go on speaking tours, I don't know if that was the case in the past, but I feel like now Fed people know that, like, if I say something,

I can potentially move markets and I can really, like, increase my star power. And I don't think it's a good thing. Definitely not a good thing. Like, there should be some sort of quiet period between meetings. Like, you can't talk in the four weeks up to or the four weeks after a Fed minutes release or meet,

something like that. There should be a quiet period. Agreed. Here's something that I don't think anybody saw coming. Jeffrey Kleintop tweeted, natural gas prices in Europe are nearly back to pre-war levels. Well, how about that? That is surprising. What's the new zero-hedge one again? The new zero-hedge substack that told everyone in Europe was going to be burning their houses to stay warm during the winter?

Duneberg. Duneberg. They were talking about, I mean, I'm not an energy expert, but they were talking about how, like, the energy situation in Europe is going to be like nothing we've ever seen. It's going to be like the 1600s or something. And now prices are back to where they were. I would like to learn a little bit more about the situation because I honestly, obviously don't know what's going on there. Well, when the line goes up, it's bad. When the line goes down, it's good.

That's all I know. Is that fair? Down 43% this month? There's got to be a reason for this, no? It can't just be like positioning or can it? I have no idea. Obviously, like in the short term, I would never try to guess these things. My whole thing is in the long term, I think people figure stuff out.

And it could be painful in the meantime. One of my biggest philosophies on life is people figure stuff out. All right. So, Ben, look at this Zestimate. This is the house in my neighbor that I keep talking about. that was listed for 725. So you see, like, pre-pandemic, this house is just under, it looks like 550, 575. And even that seems like sort of high.

I know, it's 550 pre-pendemic. I'm sorry. It was 550. Even that seems a little bit high. But fine, whatever. They listed the house for 725. And this is the thing that we keep talking about. The straight line up there at the end, it again looks like a fat finger on a chart.

All right. So listed for 725, a month later, they reduced the house, the price, by three and a half percent down to $6.99. A month later, they reduced it by 2% to $6.85. Three weeks later, they reduced it by less than 1% to $6.79. Sellers are just not... I feel like... I know this is literally one example, but I feel like it might be representative of the fact that sellers just aren't moving quick enough to meet buyers. I feel like this is the kind of thing where you have to do it in chunks. Like, if you're doing a $725,000 house, you cut your price by $50,000. And that gets people interested.

Because then they think all the sellers motivated. $7.25 to $6.99 to $6.85 to $6.79. Come on. You got to move. So when we bought our first house, we were buying in late 2007. So the real estate market was effectively dead. It was a new construction that had been sitting on the market for like nine months. Like a brand new house and like affordable, especially in today's world. And they dropped the price once by $20,000. No one bit. And they dropped it again by like $30,000.

And I think ended up being like four bids on the house. And we, not to brag, we won. Michael. We got it. But I think that's what needs to happen is if you're selling, I would not envy anyone in a selling position these days. Obviously, it's not an easy process, but they're playing with house money still. So I think that's what you do is if you're selling and you really want to get out, you do a big drop and try to get a lot of people in that see a big drop in price. So with rates of 7% adjustable rate mortgages are picking up, this is from Odette Akushi.

The arm's share of applications last week increased to 12.8% by loan amount. The highest since 2008. This is not really terribly surprising, but Logan Motoshamie tweeted this chart from Len Kiefer to put some context here. In 2005, two out of five mortgages had adjustable rates. In 2021, it was less than two out of 100. So now I know that's backward looking that it is picking up, but still, nothing, nothing, nothing like the dot-com bubble. And the unfortunate situation here is that- I'm sorry, the housing bubble. The Fed is pushing people into these types of products that they don't want to be in. People don't want to be an adjustable rate mortgages. They want it to be locked in so they can plan ahead. I mean, some people probably do. So there was a story in the Wall Street Journal

about how builders are more ready this time for this to happen, like things going wrong. They said one of the things they're doing is that builders to get people to buy because there's all this backlog of housing now that people are backing out of because they sign their contracts before any of this stuff happened. And the builders are paying upfront fees to mortgage lenders to reduce rates and giving incentives so people will get in, which kind of makes sense to me. The other thing they're doing is changing it to changing a lot of their new houses to rentals because people need to live somewhere. And if they don't want to buy because it's too expensive, they might rent. Here's something for you. Speaking of that, I forgot to listen to Doc. This is from Pulte Group.

Their CFO, they report earnings. Again, from the transcript, too, you should follow on Twitter if you're interested in this sort of stuff. This is the vice president's CFO of Pulte homes. For the past several years, we have systematically increased our use of land options with the dual objectives of enhancing returns and helping to mitigate market risks. With today's more challenging marking conditions. In the third quarter, we chose to walk from certain options tied to future land investment where returns no longer met required performance metrics. Interesting. And again, unfortunately, what that means is, I mean, builders are going to probably figure it out and they're going to be okay profit-wise. But unfortunately, it just means in the future

there's not going to be very many new homes built that will increase supply, which kind of stinks. Duncan says, revolving doors maintain room temperature and keep people from having doors slammed to their face. I get the temperature thing. You don't want to have the door open all the time, but how many times have someone gotten their ankle or their arm caught in a revolving door? That hurts way more than having a door slammed in your face. I'm sorry. All right. So a new Kalshi bet I put on this week. So I put this on like the day of the higher rate increase. So they have what will the peak 30 year fixed rate mortgage be by December 29th, 2022? So end of the year. And they had a bet for 57 cents for above seven and a half percent. And I put the yes in on.

I hammer the yes hard. Why didn't you tell me? I would have gotten in on you with this. I thought I did tell you. Sorry, maybe I told Duncan. And I got in on this and it's already up to 82 cents. People are thinking it's going to happen. Are you taking the money out?

I thought about it. Maybe it's a little hot. But I think, don't you think 7.5 or 8% is in the ballpark for being realistic by the end of the year? What is it now? Seven two? It's like 712, something like that. Speaking of Cal Shea, they have a tweet thread, which we'll link to. They said, we believe in the power on utility of forecasting, a threat on why we're giving away

$100,000 to find America's best forecaster. What is this? So the most accurate forecast of the congressional races. I think this is going to be the coolest thing that they do. So they said they're doing election markets in like three days and pending regulatory approval. It's the countdown. But I think watching the percentages and probabilities change for Congress and the Senate and then the presidential race when that happens, I think that's going to be really cool to see, just to see how the probabilities change over time. I got one more real estate thing. So you've heard of this new show on Netflix called The Watcher.

Yes, any good? Rob wants to watch it, but I've heard of mixed reviews. It's like a six and a half. We watched one episode and like we're intrigued enough where it's not a great show. I'm a big fan of, so it's Naomi Watts and Bobby Cannevalley. Did I say his name right? I think it's Canna Valley. Either way.

Okay. I like him. But the whole premise of the show, I'm not like giving way anything here is that it shows the perils of concentration in one investment position because the guy, the family, they sell all their stocks, they cash in all their retirement plans to buy a huge house that they can afford. So they put all of their money eggs in one basket and buy a house so they're very house poor and they bought too much house and everything goes downhill from there. So that's the problem. It's buying too much houses. Everything goes wrong from there. Is it a scary show?

So you talk about horror versus like the shining. It's like a creepy kind of show. Okay. There was an article in the information about venture capital and endowments, exposures. And the TLDR is like there aren't enough big funds for these massive pools of money to get into. What do you mean? So, for example, they're talking about Stanford, how they want to get more VC in the portfolio. Oh, venture capital as a in collective is just not big enough for these endowments and foundations. Stanford struggles to increase its VC allocations reflect the steep competition among large institutions for a slice of top funds. This can be out of reach for even those with decades old ties to Silicon Valley. This competition has innovated despite a drop in

startup valuations on a shuttered initial public offering market. The hardest part is, if you weren't in on one of their ground floor funds, especially like a Sequoia or Kleiner Perkins or one of those, like, forget about it. You're never, my endowment fund was like a billion dollars when I was there. There was no chance we were getting into any of these. And the thing is, what they do to you is if you were in one of the funds and you don't re-up for the next fund, see you're gone. You're not going to be getting in any more funds in the future.

So it's very, very difficult. And venture capital, especially like compared to private equity, it's like a drop in the budget. So they said that in 2021. private equity, which includes VC obviously, was 33% of Stanford's asset allocation, up from 25% in 2015. These numbers, I know this is backwards looking, but this is how they got there. Airbnb got into their portfolio, Stanford's portfolio via Sequoia in 2009. Stanford generated $700 million in gains through its Airbnb investment. It made $200 million off DoorDash.

Geez. Hopefully they sold. How bad is DoorDash now? I haven't looked at that stock in a while. Let's get into some quarter stuff. suggest if you want an earnings season recap. Hey, your phone keeps dingin. I don't know what to do. What do you want me to do? We've had this problem before. I cannot turn it off. I don't know what you do. It's in my computer.

It's horrible. I'm sorry. Sorry to the audience. You could sign up for their earnings season recap, which we'll link to this in the show notes. We've got a busy week. We've got Microsoft and Google and Spotify tonight, Visa, EPS, I think it was today, Tripoli's after hours. We've got Facebook tomorrow, Apple and Amazon and Intel on Thursday, Shopify, Cat.

I mean, this is the week. This is the week when it all happens. All right, it's early, but Journal did a post. The shares of S&P companies that have underperform Wall Street earnings expectations have slipped 4.7% on average in the two days before and the two days after their report compares with a five-year average of 2.2%. So a little bit worse. But look how bad. So the chart shows earnings beats and earnings misses and how companies perform. Remember how bad the first quarter of 2022 was? So the average. The average on a miss was negative 5%. That's for the S&P. Companies like Open Door and all the other high flyers were down like 20, 30%. on misses. Doesn't it seem like they should have lowered expectations of such a level that it's a sixth-inch hurdle they're jumping over this time around? Especially for those companies that missed bad, if you weren't just making everything sound so negative and pessimistic, then you probably weren't doing your job to tell the story and make it easier to beat this time.

Another thing that quarter does, and we'll look to this on the file on Twitter, they pull out like the best clips from earnings call. So for example, we spoke about Amex earlier. The CEO said, look, the spending speaks for itself. I mean, just look at some of these numbers. numbers. Goods and services up 16%. Our U.S. consumers up 22% millennial spending is up 39%. Now, obviously, a lot of this is inflation. Travel and entertainment spending is up 57%. Quote, we're not seeing any changes in consumer spending behavior at all. This is a really interesting quote. A lot of people are trying to equate what's going on with the stock market and going on in spending. There is no correlation in our history of that. Look at this next chart. It shows the network volumes. And you see a dip in the great financial recession. You see a bigger dip in COVID. but the direction of network volume, I don't know if that's exactly what spending is, but let's just say that it is. That's one direction.

That's up into the right. The surprising thing here, I'm looking at Y charts here. I'll put this one in the show notes. This is only through Q1, so it's on a little bit of a lag, but total U.S. credit card debt is still lower than it was pre-pandemic.

So people are ramping up their spending and all this stuff. We still haven't even got back, nowhere close to the trend of what it was before the pandemic, if things would have kept rising a little bit, because you expect debt to rise a little over time. People have spent so much time

paying down their debt the last three years, that even with all the spending we've seen in last six months, it's still lower than pre-pandemic levels. Wild. That's surprising. Another chart from Amex showing travel unattainment by industry. Look at this. Restaurants. Holy gazole.

Restaurant spending is up 37% versus 2019. Airlines is down 7%. That's kind of interesting. But restaurants, people are eating. You complain about Chipotle. Have you noticed that restaurant prices are way, way higher than they were a few years ago? Do you notice this at all? I guess I don't pay close attention when I go to the restaurants.

Okay. It seems noted to be hired me. 15 to 20% higher for a bill probably. Actually, that's not true. That's not true. A few weeks ago, I think my name mentions this show, Robin spent $30 on a salad with chicken. Did I mention that? I was up in arms.

But the restaurants are packed everywhere you go. We went to a steakhouse for dinner, Robin and I on Friday night. So it's hard to tell if, I don't know that I would notice a change from like, I'm making this up. If it's normally 210 to 225 or 230, I notice it at the lower end. Okay, but not the higher end? Yeah. Does that make sense? Yeah. I guess I noticed it. If eggs go from $1.50 to $3 to me, that doesn't move the needle.

I noticed the more middle stuff. If food goes from $15 a plate to $18, I noticed that. All right. Let's talk about Netflix's earning. So Ben mentioned last week, I bought Netflix like, I don't know, three weeks ago. And I was an M bullish on this advertising thing. I thought it was going to work. And I was bullish on the short term because the stock was setting up nicely. It was outperforming all the other fan companies. But that being said, we're in a bare market. And so I'm managing risk accordingly. And I got stopped out on a downgrade, actually.

I think that's what moved the stock lower. I got stopped out and it's up, I don't know, 30% is where I sold, something like that. That's trading. It happens. It's not fun. So Netflix is up almost 80% from its lows. And that was in May. When I put this on, I was willing to risk 10% to make 40.

That was my defined risk. And did it sting? Yeah, it did. But I washed it off. moving on. So let's get into the earnings. It was great entertainment for me. Me too. I get it. It was good entertainment. Love is blind. As far as I'm concerned, that is the best dating reality show. Do you know about this? I gave up on reality show. I used to be a huge reality TV watcher. I more or less gave up. Rex and Zilland I watched in a while. And when I was in college,

we would get back from class and there was like four in a row. Remember like the fifth wheel, like a blind date? What was the other ones? Okay. So clearly you've seen your fair share of reality dating. So don't act like you don't know. You know. Joe Millionaire. I watched them all back in the day. Okay. High school college, I watched. Does Courtney watch Love is Blind? I'm sure she does. It's very good.

The premise of the show is there's like six men and six women and they date through, they're in pods and they can't see each other. And they propose in the pods, then they see each other, then they go into the real world. And it's a disaster. It's fantastic. They think they're in love and, of course, it never works. It's fantastic. It's an absolute show.

Their lower price ad-supported plan, which I think is $6.99 is launching in 12 countries. in November. This is a wild stat. In the U.S., Netflix accounts for 7.6% of TV time. That's 2.6 times Amazon, and what. 4 times Disney and Hulu and Hulu Live? I guess that's not that wild, actually. Netflix definitely has the brand. Like, if we're comparing crypto to Netflix, Netflix is the Bitcoin. Does that make sense? It's Lindy. Yes. They said that our competitors are investing heavily to drive subscribers and engagement, but building a large successful streaming business is hard. We estimate they are all losing money with combined 2022 operating losses well over 10 billion versus Netflix's $5 to $6 billion annual operating

profit. They are the kings. They still have it. They added streaming subs after being down, I think two quarters in a row. Here's this chart from the signs of hitting that we'll put in the YouTube and the show notes, et cetera, et cetera. Oh, Lucas Shaw, here's a wild stat. I recant my other wild stat. This is truly wild. He said, people spend more time watching YouTube on a TV than Amazon, Disney, and HBO Max combined. And that's just on a TV. See, I'm not a YouTube watcher on TV because my kids, well, my kids watch a little bit. I'm told that it's really a younger person thing. It's also hard to search. When you have to search with a remote and type in every single letter, it's such a pain. I don't know why how the remotes haven't gotten to the point

where they can just give you a little keyboard to type on. I know you can do a lot of it over your phone too, but it's a pain. I think a lot of young people get a lot of their viewing experience from YouTube. I think they grew up on YouTube. Would YouTube be worth more than Netflix if it was a standalone company? What's Netflix market cap? It's not that big anymore. Is it 100? 130 billion. It's got to be close, right? What was Netflix at the peak? Was it 400? I think it's 300. 300. It was 300. Here's another one. In the 190 countries in which we operate, our $30 billion plus of annual revenue is roughly 5% of the combined estimated $300 billion TV streaming industry, $180 billion in brand-end advertising, and $130 billion consumers spend

annually on gaming. So Netflix is saying they're 5% of that market. They have much more, much deeper to penetrate. Maybe. I don't think they could count 130 on gaming as their, I know they're getting into gaming, but that seems, I feel you should back that out. Back that out. Yeah. I also feel like there's bound to be consolidation in this industry, and the competition for them is much higher than it was in the past. Who consolidates, though? Or do these streamers just go away? Well, it's going to be Hulu and Disney. and eventually Paramount has to consolidate with someone, probably, Peacock. I don't, don't, those have to at some point?

Have you heard of the Sandman? They mentioned the Sandman as one of the new shows. Nope. This is classic Netflix description. When the Sandman, a.k.a. dream, the cosmic being who controls all dreams is captured and held prisoner for more than a century. He must journey across different worlds and timelines to fix the chaos his absence has caused. Does that sound terrible or what?

Yeah, I'm out. That sounds like something you might watch. It sounds like a horror, doesn't it? It does sound like sort of for me, but nah, it sounds nonsensical. But it would probably be huge. If it was on HBO, I'd watch. But I don't trust Netflix with that. All right, Snapchat.

The stock is down 90%. Holy cow. I did not realize that. The stock is down 90%. Can we finally put to bed the fact that Snap is a macro indicator? Yes, for sure. We done that already? Still has a $14 billion market cap.

That's kind of interesting. It was $130 at the peak. I'm here to admit, I've never used. snap. I've never downloaded the app. I have no idea how it works. Okay. I'm an old. We're going to answer this in a sec. Snap. So what happened was the price of sales ratio at the peak was 41. It's now under three. That is some serious compression going on there. Their average revenue per user is not growing.

In fact, it's shrinking, which is a bad thing. Their costs are insane. Company's down 65% since IPO. Okay. I think buying a basket of IPOs in the last five years in holding them has got to be one of the worst investing strategies there is. Yeah. They're still losing gobs of money. It was their slowest revenue growth ever. I think it was 6% year over year.

It's really all bad. And they pulled guidance, which is never a good thing. They say, given uncertainties related to the operating environment, we are not providing our expectations for revenue or adjusted EBIT off for the fourth quarter. They should just sell the Facebook. So the stock fell 30% that day. But they did announce that their board of directors authorized. a stock repurchase program of up to $500 million, which, I don't know, if not now, when?

Why doesn't Twitter just buy them? If not now when? Elon should just buy them. He's got enough money. Twitter is a $20 stock, at best, without Elon. This is the biggest overpay in history almost. It's got to be up there. Okay, so Snap the Business might be in a difficult spot, which clearly it is, TikTok, and

advertising, spending, and all that sort of stuff. But it's massive. They said, today we reach more than 75% of 13 to 34. year olds in over 20 countries representing over 50% of global advertising spend. I don't if that's fun with numbers, but they've got like 300 something 30 million users. That's where people play. That sounds way too high to me. That's 75%. But what if it's just like Twitter where it's a company that people get a lot of use out of, but it's a crappy stock. That's the same thing with Twitter for the last 10 years. Twitter's a great platform to use if you know how to use

it. It's a terrible stock. So I was looking at analyst coverage of Snap. They've, got six buys, four outperforms, only two cells, 28 holds. That's because the sell-side analysts don't want to get to the bad side of the company management. You can't put a sell on. 28 holds. Who are the two brave people that said sell the stock? Hold really means sell, buy really means hold, and outperform really means buy. And sell means I'm a perma bear. I don't know. That's right. All right, let's skip this one because we're running short. There was an article in the FT that, according to JPMorgan, personal portfolios in

the U.S. filed by 44% between January and October 18th. Do you buy this? Forty-four percent? If we're talking stock portfolios, holding individual stocks, yes, I believe that. That sounds right to me. Retail traders, I don't know how they figured this out, but that sounds right. 44. So the NASDAX down 35. Yeah, it could be right. Could be right. Where'd you find this by the dip boat? Somebody tweeted this. Do you think this is real or fake? There's a boat with a name by the dip. You know, all boats have a name.

And there's a for sale sign on it. Okay. I'm of the thinking that 90% of the stuff that goes viral on the internet is fake. Most of it. But I don't know. If it's fake, it's a good fake. It's a good fake. Okay.

Finally, some good news for inflation. Contribution limits for 401Ks will rise $2,000 in 2023 from $20,500 to $22,500. People who are 50-year-old or now have a combined $30,000. a year that they can put in. So if you're behind your retirement savings, you do $30,000 because of that catch-up provision. IRA goes from $6,000 to $6,500. Here's something for you. What percentage of workers max up their 401k? Oh, I saw. 10%. It's like 14%. I've seen different estimates. That probably sounds about right to me. The thing is, the IRA being so low and, I don't know, 50% of workers having the ability to put in a 401k in the first place,

I don't know why they don't just make, if you don't have a 401K, you can treat up to the 401k limit in your IRA. Yeah, it seems sense ago. Doesn't that make sense? Let's create change. If there are legislators listening, here Ben's idea. It makes sense. This was interesting to me. Yeah, if you don't have access to a 401k, why do you get penalized and not have the ability to put more tax different savings again?

Okay, Americans who are working from home have reclaimed 60 million hours that they used to spend commuting queue and office each day. What do they do with that time? They sleep more. So the takeaway from this American time use service. It's funny. Like, if you had more time in the day, what would you do? I would write a book. I would start a side hustle. I would start a business. Nope, most people just sleep more. Can I say something? I've been sleeping way later than I ever have in my entire life. Way later. I probably sleep a little late. Yeah, it makes sense.

I'm probably in bed until seven most days, which is an unthinkable turnaround from what my life was pre-pandemic. Yeah, so plus the thing is our kids are a little older now. You had to wake up earlier when they were babies. That's true. So the kids sleep in a little longer. But yeah, you're right. Not having to get up and catch an early train or whatever. I think there is something to the being happier because you don't commute as much. I totally buy into that. That happiness premium, whatever it is, it's a real thing. My happiness has reached a permanently high plateau. Okay.

Can't go wrong with that saying. Somebody tweeted, when a stock is down 92%, but then proceeds to drop another 44% over five weeks, bare market math is dangerous. They're talking about Redfin. Look at the stock. $10 billion at the peak to $400 million today. Zillow, down 85%. Open Door Down 93, Redfin down 95.

I kind of want to take a stab at Zilla. Wouldn't it be ironic, though, if these stocks got crushed during a huge housing boom, that if they came back and did better during a housing bust, should that be an Alanis Morissette lyric? Zillow was at these levels in 2016. I agree. Out of these three, Zillow would be the one to me that would make little sense, but this is the kind of thing, like you talk about buying a basket of blue chips.

If you bought a basket of these, I'd be careful. Down 90%. A basket of down 90%. Stocks down 90%? Yes. Oh, yeah, yeah. I agree. I would love to see the stats on this if some, like, bespoke or Ned Davis could do this for us, but what percentage of stocks that have been down 90% have reclaimed their highs? It's got to be a small number. None, none. I mean, Amazon, but like... I mean, that's a handful of tech stocks, but it's got to be a very low number.

Ram tweeted a milk carton of Walter Bloomberg, the guy who I'm saying is a real person, Ben had some questions. He's fake. There's no way he's real. It's got to be an algorithm. him. There's no way it's real. He stopped tweeting. I wonder if do you think Bloomberg finally cut him off at the knees somehow? What if his last name is Bloomberg? His last name is Bloomberg. This is a fake person. His last name is Bloomberg and he just happens to tweet out Bloomberg headlines every three seconds. I think Bloomberg finally got to this guy and stuffed him in a trash can somewhere. So it stopped sharing our headlines, dude. That's not Bloomberg headlines is headlines that happen to show up in the Bloomberg terminal.

They're Bloomberg headlines. He steals them from Bloomberg. That's why his name is Walter Bloomberg. I don't know about that. You really think he's a real person? All right. Walter, if you're real. How many people that age are named Walter anymore? He's like 40. Come on.

Yeah, Walter's a name for the 30s. You're right. All right. One thing before we get to recommendations, Tadasis-Skanta at No-N-Waterns posted in the last couple weeks that he just celebrated his 17th anniversary for his blog, which is just you talk about a wild staff. This is kind of mind-blowing to me. It's almost half my life.

So the fact that he's done this day in and day out, We get people all the time saying, hey, I want to learn more. I want to read and follow more. What do I do? And I always send people to abnormal returns because every single day without fail, Tadas is posting links of the best stuff on the web. Every single day. He is the Cal Ripkin of financial blogging.

There will never be another. And he's done it for 17 years. He has his filters of putting stuff together. He shares links. He shares different kinds of personal finance days. Let me ask you this. Is Tadas Viscontta a real person? I think we might have met him once or twice.

But the thing is, I remember. remember when I first started blogging, that's when you know you made it. When you made it on to abnormal returns as a financial blogger. Oh yeah. Oh, yeah. It was a big deal. The first time you get linked to on abnormal returns, that's when you know that you made it as a blogger. That's like your sign to keep going. That was like a huge boost for me at the beginning. All right. Should we just recommendations? Did you finish House of the Dragon? Was it House of the Dragon? House of the Dragon? I don't know. I loved it. I honestly was not expecting. I had very low expectations for this show. I thought it got better as a season went on. And it was the kind of thing where this is a

beat and raise. And it got done and I immediately wanted to know what's going to happen next in the second season. I was shocked at how much I liked it. How many spinoffs or prequels have ever worked? Very, very rarely in TV. But very few. People like that one. Oh, better call Saul. I still have got to finish part of the last season, but I'm still very bare. That to me is like a redfin. It's down 95%. Something that's interesting about House of the Dragon, I don't really care a whole lot about any of the characters even. No, support of this, but what happened at the end, that wasn't like an emotional gut punch, but it's just good. It's just family drama, violence. It's fun. It's very thrilling, too, about what's going to happen next. Yeah, I like it. Well done. On the edge of your seat. I watched

Parasite again for the third or fourth time on one of my flights. Third or fourth. Yeah, I've watched a few times. I think that's one of the better movies of the last five years. The first time you see it when they open the door to the basement and you're thinking, what the hell is going to happen next? That part is awesome. I watched Bullet Train with Brad Pitt this weekend. Yeah, and you get? It was too long. It should have been like a 90-100-minute movie, but it was so entertaining. If you're a Brad Pitt person, it's ridiculously over the top. But it's a movie where the whole thing takes place on a train, and it's a train full of

assassins that are all trying to get this briefcase. Oh, that sounds like, what was the movie with Jeremy Piven? Oh, Smokin Aces. It's that kind of movie. Like, very over the top, but it's an ensemble cast. There's like three really good cameos that are kind of unexpected. And Brad Pitt, it's like Ryan? No, Meg Ryan.

But it's ridiculous. people see over the top, but I was totally entertained. A couple books. I read on one of my flights, Shut up and Keep Talking by Bob Pisani from CNBC. And the reason I like this book so much is because the whole thing is stories. He's just sharing stories of his life and his time at CNBC. His whole thing about how to pick an audience when you're trying to talk to someone

and who you're talking to ahead of time was great. You and I had a beer with Bob in California a few weeks ago. And I was like one of the highlights of he's a great guy. Which, by the way, I never grew up using the word men. Every time I hear it, it sounds like a bad thing. It's one of those words, I know it is, but it sounds like a bad thing. Oh, that person is such a match. It sounds like you're calling them anyway.

And finally, I finished, I never read anymore because kids and other stuff. And so whenever I fly, I try to read more than watch movies. And I finished a whole John Corey book, the newest one from Nelson DeMille. I think it's this eighth one in the series. The book itself, the plot was- Was this Detective? Detective, like CIA. The book itself was not great, like plot-wise, especially compared to the other ones. He's just one of the wittiest characters I've ever met.

Like his one liners are awesome. And he had a great one back in the day about like the TWA called Free Fall, that TWA 800 plane that crashed and he kind of weaves that in there, like a true story. But anyway, that's all I got. It's 10.16 a.m. The 10 year is coming down big time. So that's good. Does that mean the 4% rule is now dead again?

Stocks like it. Stocks like it. High beta likes it more. Should I buy Zilla? They've got earnings in a few days. I want you to do it just to get stopped. out right before it goes up again after earnings. Or maybe this is worse

where I say, you know what, fool me once, shame on not going to get fooled again, and I don't buy Zill, and then it goes up 25%. All right, what did I watch? Oh, yeah, nothing good on the airplane. I rewatched. Well, remember my other idea for flying, why is Netflix not on planes? Great idea. Come on. Make sense. Come on American.

The original Iron Man, who is that from? Great movie. Okay, so my only take on superhero movies is that the original origin story ones are the best. Then after that, I don't really care at as much anymore. The Captain America first one wasn't the best, but generally speaking, I think that's right. What else? Oh, so it's obviously

Halloween season. I've been watching a lot of horror. I'm not a big zombie movie guy. 28 days later. None of that stuff really is not my cup of tea. I kind of like 20 days later. That was a good movie, but just the genre is generally not my cup of tea. But I think of my own, it's a big picture.

I heard a few people recommend this. A movie called Rec. It's a Spanish film where it's shot with a camcorder and jumpy a woman is following firefighters and they go into an apartment and it's filled with zombies

probably the best zombie movie I've ever seen that's a bold claim definitely well fine one of the better ones let's just put it that way definitely one of the better ones and then this was recommended repeatedly

and I think we might have even spoken about it oh yeah we did I read the synopsis high tension good movie however apparently it was too gory for a United States release. And so a lot of the kill scenes were either sped up or they took some of the gore away. So I saw the watered down version of it. But good movie. Good movie. Like when

you used to watch a movie on USA back in the day? Yes, exactly. You'd be Kaye, mother trucker. Cheese and rice. That was another one that got dubbed over. All right. Oh, well, you didn't speak about this. We were in Boston for a Fidelity Digital Assets event. And there was a tweet this week, fidelity to increase its crypto unit by 25% with 100 new hires to a total of 500 people. They're doubling down on the space. They're not giving up by any means. I came away in press from that event. All right. So that episode is coming out on Monday. You'll be able to hear our live podcast. We did. Acre trader will be the next week. So the audience will hear it. So we repeated some jokes. Listen, if it hits, it hits.

That's right. We call ourselves out. But those are coming in weeks ahead. Send us an email at Animal Spiritspot at gmail.com.