Animal Spirits Podcast - Did the Market Just Top? (EP. 434)

Episode Date: October 15, 2025

On episode 434 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss why it's so difficult to call the top, why earnings matter so much, we were due for a correction, valuations aren't that crazy, good news for low income Americans, how the housing market is impacting the stock market, why Gold is rocketing higher, the cash on the sidelines fallacy, the crypto liquidation, the problem with being house rich and much more. This episode is sponsored by Calamos and Stash. Ready to rethink your portfolio? Explore CANQ today and visit https://calamos.com/CANQ to learn more. Go to https://get.stash.com/Spirits to see how you can receive $25 towards your first stock purchase and to view important disclosures. Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's episode is sponsored by Calamos, looking for NASDAQ exposure, monthly income, and built-in-risk management, all-in-one ETF. Check out the Calamos NASDAQ equity and income ETF, ticker C-A-N-Q, Ben. Yeah, they spell it out for it, which is good. Can-Q taps into decades of expertise and options and alternatives to pursue upside from the NASDAQ-100 stocks while actively managing downside risk with fixed income. It's a smart mix of growth potential, monthly income, and risk-adjusted returns. Since it's February 13th, 2024 inception through June 30th, 2025, CanQ has captured 96% of NASDAQ's upside with only 65% of the downside across all market cycles. Ready to rethink your portfolio, explore CanQ today and visit Kalmos.com slash cancue to learn more.

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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. You wrote a post last week. Some bubble questions.

Did I grab the right post? Is this the top? Okay. Maybe it is. When did you write this? Was this prior to Friday? I think I wrote this Friday. And you know, you have one bad day in the stock marketing.

You feel like, oh, I need to change my whole thesis. But I think it's still, we talked last week about the meltup. And I just, my whole thesis here is, I don't think anyone's, people are going to try to call the top. I don't think anyone's going to be able to do it. that's that's the where I stand on this and if they do they're just going to be lucky well yes somebody will call the top but right but everyone keeps trying to do it over and over again and I don't think you can if you've been saying it for 24 months then get out of here well counterpoint I generally agree but people were bearish in 0506

Michael Barry famously was very early and very right yeah but I think that's a little different. That was like calling the housing market to crash. And I think if you're saying, listen, AI bubble is going to crash someday. Like, everyone has been saying that. No one can take credit for that anymore. Everyone said it so no one said it. Well, how about this? We discussed this last week and we'll do it later in the show. Calling your shot, who cares? Right. Like, it's very easy to say this is the top without any repercussions. Right. Is anybody going to keep saying it over and over again? Right. But like making money, that's what we're talking about here. Is anybody going to successfully nail the top and actually...

Okay, that's the good point, yes. That's the, are you going to pull the John Paulson and actually profit from this? Right. So I don't think the market will allow that for too many people. Again, get to that later in the trial. But the chart that I pulled out, Ben, why did you choose the forward PE ratio? Because I guess you're saying, like, if valuation is your thesis, things are overvalued. So chart kid Matt did this for me.

I said, hey, I'm thinking about writing a post on picking the top. And he said, how about this? He said, look at how many times it looked like valuations. peaked during the dot-com bubble because they rolled over and they came back up and they rolled and part of this is just the market rolling over right but the point is how many people thought that that was the top every time valuations rolled over yeah and then they kept moving higher yeah okay so here's here's what i took away from this i'm looking at you have a table in here showing the bare market since 1990 and at the peak in 2000 at the march peak the forward PE was

only 22 times got me thinking well Yeah, the forward P.E was a bit elevated, but it was wrong because the E fell out through the basement. So I had chart kid, make me a chart, which showed what is the forward 12 month EPS versus the actual EPS? And you could see the bare markets happen when the earnings are way higher, when the projected earnings are way higher than it actually happens. You saw this, obviously, in the dot-com bubble, you saw this in the GFC, you saw this in 2020, as quick as it was. And that's all that matters here.

So I don't care how high the forward PE gets. Now, at some point, it matters when it matters, and the higher you get, the less margin you have, the worse, the downside is. But it doesn't matter until earnings actually disappoint. Right. So that's it. because it shows that most of the time estimated earnings and actual earnings are right in line to one another. And you're right, it's when people get ahead of each other. And as we talked about

last week, the earnings are going to roll over almost concurrently with the stock market. So to your point, you have to almost wait for the earnings to roll over before you start in marriage. The stock market will roll, we'll go first. Remember our chart last week showing that they basically happened within days of each other? Really? Yes. I'll put the chart in for you. Cartman made this for me. Keep talking. I'll find it.

No, no, no. But the point is, but you get earnings, you only get earnings four times a year. Right? There's four seasons. So I'm saying that, whatever, that by the time their earnings rear their ugly head, the stock market will have rolled over. Not always. But anyway, the point is the point is this?

Where a lot of talk about, is this a top, is the top. And again, maybe it is, maybe it isn't. But earnings, that's it. That's all that matters. If I, give me one indicator for the future, it is where do earnings come in relative to where do people think earnings are going to be. Look at the chart I just put in there. Remember this from last week? You must not have been paying attention.

It shows that earnings in price essentially top at the same time. They were within. Wait, hold on. This is, this is, there's two examples here. This is 2007 and 2019. Yeah, these are examples, but it should, but every time in history, it's like this where the earnings and we did an aggregate as well, but these are just examples to show. it's within like 12 and 20 days for the last two big crashes

that earnings in the stock market roll over. I need to, I need to, I need to zoom in. Because the point is that the stock market is not going to front run this. Well, how about this? I agree with you. It's going to wait until it sees earnings goes down like you're saying.

I'm not saying that it's going to front run it by 180 days. I'm just saying, let's say that the market rolls over in February and we start to get earnings in April. That's all I'm talking about. You're going to have like a 50-day window. close enough, close enough.

I'm saying history shows the stock market is not very good at predicting tops in earnings. Okay. That's what the data shows. I know, I'm just, my point is, I wonder how this EPS is calculated because you're using a daily series

for the price. This EPS is not a daily series, Ben. That's what I'm saying. The EPS is smoothed out, right? There's a time this match. That's all I'm saying. But close enough. I guess you're saying.

I had this in the dock for our conversation with Scott Nations that we didn't get to, and it's not to suggest that, like, I was calling for Friday by any stretch of the imagination. But the chart was this. The market has been very calm. And so Friday's hiccup, which obviously were to get to in a second, you know, things come out of nowhere, happens all the time. Yeah. It's been, frankly, way too easy since April. We hadn't even had a 3% down cycle.

We had the 3% down day on Friday. We had had a 3% drawdown at all since April. So Matt made a chart. The number of days in a row where the S&P 500 has stayed within a 1% trading range. So just really boring stuff. It's been 33 straight days. The last time we had a stretch like that was 2020. Huh?

Well, yeah, probably after the crash. Yeah, but those are wild times. No, but if you remember, once the summer hit and started going, we didn't have, it was just a slow methodical move higher. It was like big chunks. Okay. Anyway, to your point about the 3% decline, so Warren Pyes, this is just delicious for the eyeballs. The market was stretched. Only the seventh 119 day stretch without a 3% pullback.

So he plots all of the previous ones and the strongest ever. So what was the market up? I can't say. It doesn't matter. 119 days without a 3% pullback. So people got complacent, whatever, whatever. Friday Trump tweeted something about 100% tariffs on China. The spoke has a chart showing.

Sometimes the stock market and investors are looking for an excuse to sell. Yeah. That's what Friday felt like to me. Yeah. Like, okay, this time. Let's sell a little bit. Yeah, maybe take some risk off the table. NASDAQ hits a 52-week high and then finishes the day down more than 2% from that high.

So it's happened plenty times. I don't know. Looks like around 20 over the past 35 years. Was at the top? I don't know. It's happened a million times in the run-up to the dot-com bubble. It happened in the recovery. It did happen at the peak of the GFC.

But then over the last 10 years, which has been pretty much up to the right, a few, obviously, a few bare markets in between. Throw these words in my face. There's no way that was the top. Well, how about this? It's going to get crazier. I agree. It looks like there was, there was 10 of these, give or take, just eyeballing this in the last 10 years.

One of them happened at the top. I mean, even in the 90s, there was a few corrections along the way, but. So everything fell on Friday. We had 424 stocks in the S&P that were down. Most decliner since July. what happens next week, next month, next quarter. Who the hell knows? But a little slap on the wrist.

It was necessary. Even if a little 7, 10% flush here would be perfectly within the realm of, like, reasonable. We deserve it after what you have. I love that we even have to say that out loud. A 7% decline would be normal. Yeah, obviously. It just seems pretty easy there for a while.

Can we talk about the AI bubble now? Sure. Let's do it. It's been 13 minutes. There's nothing else to say about it, though, at this point. So let's move on when you talk about it. Let's talk about wealthy quality. There's still some new stuff.

Okay. All right. Where did you get this chart from about market cap weights? Because to me, this shows... This is great. I had never seen it like this. It goes all the back to the 30s? Auger in Infinity.

You can't remember who tweeted it. But they're showing. So the charts that you usually show to demonstrate market concentration are like the top five stocks, the top 10 stocks, whatever. this is showing the market cap weight of the top 10% of largest U.S. stocks. And credit to them, this is really great. Oh, okay. I read this wrong.

Okay, I see. Okay. Going back to, I guess, this must be the Dow, some sort of combination because it goes back to the beginning of time. And it's the highest ever. It looks like it's like almost 80%. Now, Movison wrote a piece a year or two ago where he said, actually, concentration generally is what you see in bull market.

Like, be careful what you wish for. Because look at, when concentration bottomed. It bottomed that it declined dramatically in one of the worst bear markets ever, the 66 to 82 bare market, got as low as 50% or below 50%. Now it's treacherous. So that, yeah, that period in the early 80s and early 90s was, that's the outlier, historically. Early 80s. Yeah, that was the bottom, 82.

Which begs the question. Let me just skip ahead a little bit. there's been, I got like maybe half a dozen emails last week. Michael, why do you keep saying the stock market, the bear market in 2022 lasted for two years? Like, what are you talking about, dude? Fair enough. I think when I say it, I mean like two years-ish. It was like almost two years.

But if I must defend my honor. Yeah, that's from peak to peak, right? I'm with you. Okay. But no, but a lot of people are like, what are you talking about, dude? So, the stock market peaked in, on the first day of 2021. No, 2022. Oh, sorry, 2022, yes.

Okay. It was the first day of 2022. And then it bottomed in October of 23. Now, the question is this. And I know this is semantics. No, it bottom October 22. We're a bunch of couple old middle age guys here. It bottled in October 22.

Okay. All right. Fair enough. My bad. I have the chart right here. What am I doing? Apologies. Top January 2020, bottom October 2020. Question is, when does the bear market end? And now, listen, I'm sort of teasing here. I'm open-minded. Different opinions, all good.

And I think that this is more of an art than a science because is the bottom of the bear market, and we've had this debate a million times, so forgive us for rehashing this. But is the bottom of the bear market at the beginning of the bull market? I would argue no. Because in March of 2009, nobody was like, hey, look, it's a bull market. And even fast forward to like 2010 when you were already doubled off the lowest still, nobody was like, oh, it's a bull market. Now, I'm sure J.C. was like, oh, it's a bull market, bro. But does a bull market start when the bear market ends?

Does the bull market start when you're 20% off the lows, right? Because like, oh, I guess if you're just using the inverse, does the bull market start when you're in a, when you're back within 20% of the previous highs? Does that reset the bull market? It depends. Does it reset? It depends. Okay.

So it depends. You're right. So does it reset? Like, let's say you have a 50% bear market. Is the reset when you've recaptured half of the losses? Or does the bull market officially begin when you've retaken the new highs? Okay. So here's the thing.

So that was my posture in 2013. The bull market officially started in 2013. For instance. But there's a lot of room for debate here. Yes, sir. Like, the bull market didn't start until the 1980s, but the stock market It bottomed in 1974. Exactly.

You had this choppy period after. And nobody says 1974 was the start of the bull market. But the market bottomed in 2009 of March and then shot off like a cannon from there. That's the start of the bull market. So it's different. That one for real was the start of the bull market. It's a 16-year bull market. Okay.

My definition. Other people disagree with me. My definition. This is a 16-year bull market. Just like it was like a 20-year bull market in the 80s. The reason why I'm even... Getting close to saying it was a two-year bear market is because if you let's, first of all, the, which market are we talking about?

Let's just use the S&P and we can use the equal weight. So the S&P 500 made a new all-time high two years after the first peak, right? It was like January to January. Okay? It was January 22 to January 24. That was the round trip. So that's why I say two years. If you look at the equal weight, January 22,

by October 2022, when the equal weight bottomed, I'm sorry, I'm sorry, I'm using 2023. So everything bottomed on October 22. But by October 2023, which is 22 months after the peak, almost two years, the equal weight was still in an 18% drawdown. So that's 20 months, 22 months, close to two years. I feel like you're making a case to Judge Judy here in court. That would be a good show, actually. There should be a C&BC should have a judge show where, like, we hash these debates out. But two years later, the average stock, the equal weight, was in an 18% drawdown from two years prior.

Is that not a two-year bare market? I mean, it's close enough. Listen, I get it. There's plenty of room for different opinions in here. Josh can give me royalties in this. We'll have Judge Josh on CNBC. He can wear the robe. He'll have his gavel.

And then people come and argue about this stuff. Because if somebody says, listen, the bear market ends when you make a new all-time high period, well, that's just their thing. There's gray area. It's, yes, but I'm glad you laid out your case there. Okay. Chart from charter. I feel like there's a lot of stuff in America that we get wrong that we're really bad at, and people are very good. You mentioned last week all the negativity.

I'm trying to be positive here. There's a lot of things that you can point out that we're bad at. The education system's not great. We do this wrong. We're not good at this. We're really good at producing the world's best companies. So this is, they have the world's 100 largest public companies. We have 60 of them, okay, in North America.

There's two in the Middle East, 17 in Europe, and 21 in Asia Pacific. The rest of the world has not figured out how to make gigantic corporations like we have, right? We're really good at that. For all our faults, we're very, very good at this. Very, very good. And I don't think that's going to change anytime soon. All right. One thing in an AI.

Sorry, too. This is the updated chart on... You did this, not. me. From Goldman on... I tried to keep this an AI-free podcast because

you complained last week. Hyperscalor CAPX for AWS Microsoft Google meta and who's that new symbol?

Is that a Oracle? I think people are running out of ways to show this chart differently. Look at this. We've shown

a variation of this chart once a week for two years now. Yeah. Right? I'm starting to come around to your side.

I can't believe you put this in here. Shame on you, sir. I know, my bad. So another one from Goldman, and we've done this in the past, but sorry, valuations today compared to the tech bubble, the Japan bubble, the nifty 50. And if we're just looking at the 24-month forward P-E, 27 times today versus 52 for the tech

bubble versus 67 for the Japan bubble versus 35 for the nifty-50, here's the thing as you mentioned earlier 24 months. I mean, we don't know what's happened 24 months. It's number one. Although it just shows you that the expectations were way higher. We're way higher in those previous periods. But the big obvious thing that is so different today than the prior episodes is the size of these companies. These companies, the giants today dwarf the size of the previous bubbles. Do you catch Howard Marks in C&BC yesterday? Nope. He came on and he said, listen, I don't see signs of a mania. Obviously, there's overvaluation.

And he's like, these companies are just bigger and better than companies in the past. That's it. That was his whole thing. It's like, they're just better companies. Yeah, that's what I mean. I agree. I'm looking at the NIF 250 here. I just have to say, who do you think came up with the name Xerox?

Do you think that someone said, hey, I bet you can't come up with a company that has two Xs in it? And someone's like, oh, yeah? Like, who would come up with that name today? That was a winner in Scrabble. Although, were there two axes in the Scrabble board game? I don't know. But speaking of board games, Kobe is obsessed with Monopoly. Okay.

Did you get the kids version or the real version? No, the real version. And we've played it for four straight days. And he's going to be the Monopoly man for Halloween. And I see no signs of it slowing down. This is my new threat. Because I got my kids, because I think real Monopoly is, it's so tedious and long. So we had the kids version, which is way faster and way easier.

All right. I love Monopoly. So I have no problem. It's not that long. How many times have you started a game of Monopoly and not finish it? I feel like that's 75% of Monopoly games is like, ah, screw it. You're going to win. Let's not finish.

I've never finished a Monopoly game. Not me. Big Monopoly guy. The game's usually, well, it's just for the two of us, it's 30 minutes or less. Okay. If you want to bring Logan in, get the kids version. The kids version is actually kind of fun. We play that all the time, too.

Okay. All right, here's another good one. The top 500 median stock free cash flow yield. This is from Morgan Stanley Research, talking about, like, debate about whether we're in a 1990-style bubble, and the free cash flow yield would suggest, would suggest not, at least compared to 2000, where the free cash flow yield got as low as 1.2%. Now it's 3.4%. But that's the difference back then. Those companies, they didn't produce enough profits and earnings. This is the chart. This is the chart. The S&P 500

forward PA normalized by profit margin. And this is the key part. In 2000, this thing would was double where it is today. And it's actually about at the average of the last 20 years. So the forward PE normalized by the outsized margins. And when you look at that to Howard's point, to Howard Marks' point about like, these are great businesses. It looks reasonable. All right.

At this point, Judge Josh bangs his gavel and says, all right, it's not a bubble. Right? You made your case. I feel like you just went through and made your case. This is not a bubble. It doesn't mean that stocks can't fall 50%. That they always can, right? Like, but this idea that there's going to be an 80% washout.

and these stocks won't recover, I view that it's highly unlikely. Actually, okay, so this guy, I just, so this guy, Robert Kaisaki, I can't quit him. He sold 33 million personal finance books, 33 million, Barry told me this this morning. He says, reminder, I predicted the biggest crash in world history was coming in my book, Rich Dad's Prophecy. That crash will happen this year. Baby boomer retirements are going to be wiped out. Many boomers will be homeless or living in their kids' basement. and he goes through all this other stuff

about silver and saving... By the reminder, this guy's been saying this for the last 10 years? Oh, yeah. I just... Are we sure this is not... Are we sure this is a real person? Yeah, we... So there's been videos of him, like, berating people in the audience.

Remember that? I just... How is he one of the best-selling personal finance authors of all time? It makes no sense. I don't get it. It does... Something's can be explained. I came, because you said we were being too negative last week.

I came with the positive. So here's the two negatives people always say. To be clear, I'm not pointing fingers at you or I. I know. I'm just saying society. And there is a lot of negatives. But here's the thing. There's ways that you can make good news look bad.

So one of the things is, well, the stock market is going up and that just means the rich are getting richer, right? But, oh, contrary, that's true, but more, this is from the Wall Street Journal, more working class Americans than ever are investing in a stock market. For the first time, a majority of low earners have been. investment account, and more than half of those new investors have entered the markets in the past five years. So Americans with incomes between $30,000 and $80,000, 54% of them now have taxable investment accounts. Half of those investors have entered the market in the last five years. And this is from

a survey from Black Rock. So yes, the rich are getting richer, but the stock market is, the tide is lifting a lot more boats now. There's way more people invested in the stock market. Among newer investors, 45% has put 5,000 or more into their accounts. 40% of the new and investors, since January 2020, planned to hold their investments for at least a decade for long-term goals, including retirement. This is great news. Yeah. The stock market is going up, and yes, rich people are getting richer, but that's always going to be the case. Now there are way more people invested in the stock market, and people always say, yeah, the top 10% own most of it, but it's close to two-thirds of all American households own stocks now. So this boom in the 2020s

has been phenomenal. I think Robin Hood has 26 million customers. And I think they said something like half of those, it's their first ever brokerage account. JP Morgan said something similar in their earnings this morning. Okay, so listen to that this is from JPM, so that we also journal had another piece. Now, people have been saying, like, listen, this, this stinks, the fact that young people are being boxed out of the housing market. I agree. A lot of them are really angry and probably have a right to be.

But they say, where of all a young homebuyers gone? Check the stock market. A J.P. Morgan Chase report found that 37% of 25-year-olds used investment accounts in 2024 up from 6% of the age group in 2015. A sixfold increase in the number of people investing in the stock market for the past decade suggests a shift in the way people think about building wealth. So they're saying, listen, most of the Gen Z people who are boxed out of the stock market or the housing market are using those down payments to invest in the stock market. As we have been saying, so the numbers now bear this out, there's way more young people

invested in the stock market and there's way more low-income people invests in the stock market. Both fantastic leaps forward in household wealth, right? This is very good news. You mentioned earlier how good we are producing these giant corporations. One of the side effects of those giant corporations is wealth inequality. And it is a real issue. And it is a political issue. And it is a societal issue.

Obviously, the way that these rich people can impact the conversation, the elections. It sucks. And I think we all agree it sucks. But there is the other side of it, which is the rise and tide lifts all boats, not every boat. But somebody had a good email on this topic. They said, I don't think wealth inequality matters. I don't think wealth inequality matters.

Okay. Do they really mean that? I would think it doesn't matter. All right, whatever. They said, or maybe I'm misquoting that. I don't think wealth inequality matters. Okay. But the absolute level of wealth for the bottom X percent does.

If Elon Musk sold all of his stock, withdrew all of it in cash, and set it on fire, inequality would go down. But it wouldn't make anyone's life better. Conversely, if Elon's wealth goes up by $10 billion tomorrow, it makes no one else's life any worse because we are not in a zero-sum game economy. Wealth inequality will never be better than it is today. Oh, I wrote this. Wait, did he write this?

I'm sorry, this is a horrible read email. One of the worst. Put this in the Louvre. wealth inequality will never be better than it is today because the compound interest sure a bare market will make it better but who gets hurt worse in a real bad recession Elon or the bottom 10% that sounds like I'm not made um fair points in there are you arguing with yourself and chat I don't know I don't even know did I make this up did I write this did I write this myself here's the great thing about the corporations you can now invest in the entire all the corporations for pennies on

the dollar in an ETF or a mutual fund or whatever and own these corporations and take part in their profits of their growth. That's the beauty of stock market. It's a miracle. And it's funny. People don't make a lot of money have the ability to invest in multi-trillion dollar corporations

in all their growth and earnings. It's amazing. We could literally own Nvidia. And for all the hooplao for private market over alternatives, which we're going to get to later. I'm in the penalty box. How many times if I said

which we're going to get to later in the show? I think there's my third time. But why would you want an alternative to Apple or Amazon or Nvidia? That's a good question. What percentage of investors can pronounce Nvidia correctly? I think most do. Sometimes you still get the Navidia, but I'd say most are...

Yes. When you catch one of those, it's like Chipotle, and people can't say Chipotle. Chipotle. I went to Chipotle today. That grinds my gears. Did I say that I went to a Chipotle recently? And I think my bowl is 1265.

Are they back? You did say that. You said you're back. Deflation. Stock looks okay. I feel like the stock might be bottoming, this piece of garbage. Where are we next, Ben? We've been jumping around. You got this one. You said fiscal stimulus with a hell of a drug.

Now, we're not going to fix wealth inequality, but the baby fund stuff is great news. That's great stuff. And it really is. You got to be in the investor class. Right? That's it. And I think nobody likes the case-shaped economy. Like obviously, we wish for more people participating the upside of the economy. And the way to do it, it's through assets because the people that are investors have so much money because of the bold market. Yeah. And that money's going to keep growing because those people don't aren't forced sellers. Most of those people who have the assets are not forced sellers. So anyway, this is why Robert Kiyosaki is not going to be right about baby boomers being homeless. The ones who own all the stocks are, they're not just because of bare

market hits. Does not mean they're going to be forced to sell their assets. By the way, We didn't even read the rest of the tweet, which is whatever. We'll put on the show notes if really care. But, like, it was, it was crazy. That's what I mean. Buy silver and Ethereum because everything's going to crash. What do you think is going to happen to Ethan in a global depression? Whatever.

What's this flows one? Because this Treasury bill ETFs have the biggest flows this year. There was a lot of throat clear. My point was there was so much money in the system that the UIDATE category, ETF loads, the top four? It's not everything we're talking about. It's treasure bill ETFs. Okay, crypto isn't there.

It's precious metals. It's the value factor and it's thematic funds. I would have never guessed T-bills are the top category. By a lot. In a million years, I never would have guessed that. By a lot. All right. It is funny, the value stuff.

So we have a talk to your book coming out next week with victory shares. And they have these value momentum ETFs. And we talked about how momentum has been outperforming by a wide margin over the value factor, but there's way, way more money and value. And look at it, I can't look till value is the fourth biggest. People cannot quit value investing. Money just keeps going in there regardless.

How much? $36 billion, where is momentum? 12. So, yeah, checks out. All right, this is weird. I'm not sure what to make of this exactly from Deutsche Bank, via the daily chart book, which is just a go-to

every day, all day. The key story for September was not rising positioning, but booming fund inflows, not just into equities, $122 billion, but also bonds, $98 billion. Indeed, the combined inflow

in September was the largest monthly inflow since early 2021. So the bond thing is, I still think baby boomers repositioning and rebalancing. Yeah, that's explainable. It's just so much money. Everyone has money.

All right, let's let's get crazy. Also from Todd, he has the ETF asset class launches as a percentage of the total on a rolling six month period. I don't know if it's an underappreciated story in the stock market, but if you're not like online and really into it, you might be missing the plot here, the leverage. and the D-Gen economy, as Linson calls, it just continues to plow ahead. So over the last six months,

one out of every four new ETFs involves using leverage. People really want this stuff, huh? See, this is why people need a slap on the wrist. Like, this kind of stuff getting out of control is like this is why we need a little more than a Friday flush eventually. And it sounds like crypto.

I'll do it with you and say, We're going to talk about that soon. But I think that this is, it's such a small piece of the market. Even though the numbers are gigantic in terms of the market caps of a lot of these companies and the call options are, like on a relative basis, does it matter? No, I guess not. But it's an interesting trend that there's just way more leverage in this system. And there's a lot of people who, like Corey Hofstein has been pounding the table this for a while.

Like there's ways to use leverage very intelligently. Right? And obviously a lot of people, most people aren't. probably. They are being degenerates with this, but people are obviously more comfortable with it, and they want this stuff. Otherwise, there wouldn't be all these new ETFs. All right, I want to talk about one of the beautiful things about markets. Like, you can still, I've talked about this with Bitcoin before. Almost everything the Bitcoin and crypto people have told us have predicted about the world

and what will happen has been wrong. But they all stayed long and they still made money. And I think a similar thing is happening with gold. Okay. Everything the gold bug said would happen. The dollar is going to crash and the Fed is going to ruin everything and the financial system is going under. Everything they said was wrong for most of them. And they're still being wrong about why gold is going up right now, which is good to in a minute, but they stayed long and they made money. Right? Gold's up 50% this year. So I showed this chart last week on that's the compound. Do you see this one? It's golden S&P by decade. And in every other decade, one has been up really big and the other one's been down or like the relative spread has been why the 2020s are

the first decade in modern economic history that gold and stocks are both booming at the same time never happened before hmm it's kind of surprising right yeah it's good that's good stuff um but then all these people i i tweeted this and some guy said um measured in gold not dollar terms isn't the s&P down 16 or something this 2020 and i then i see then i see a chart from Bloomberg denominated in gold, equities have been falling since 2000. A chart from gold marked chart, ounces of gold to buy a new house. Median new, single

family home, priced in gold is now at all-time lows. This is the dumbest thing I've ever. This is so dumb. You cannot price speculative assets and speculative assets. What if we price gold in S&P 500 points? Guess what? Gold is not up 50% in S&P 500. This is the

dumbest thing I've ever heard. Price gold? People stop this. This is dumb. Price gold in Oclo. What are we doing here? Exactly. Gold's crashing when you price it in Oclo. I just like, listen, take the win.

If you own gold, you're long. You've made a ton of money. But the reason gold is going up is not because of fiat dollars or something. Someone tweeted the other day that like gold makes up like 3% of the world's like currencies or whatever. People just take it too far. Like central banks are buying a lot of gold. That's the thing. Central banks are buying gold.

That's why it's going up. And there is. It. There is uncertainty, political uncertainty, economic uncertainty, dollar uncertainty that is leading gold higher, but you don't have to then price the S&P in gold, right? Like, you're most, like, a lot of the thesis has, is, it's not all wrong. A lot of it is played out, but then you go crazy when you're pricing, why not price cattle in gold?

I mean, what do we get? Yes, just take the win. Take the win. You don't have to make it crazier. If you want to sell your S&P 500 index fund and take that money to the bank, you're going to get dollars. Like your bank will take dollars. You can't pay your mortgage with dollars. You can't pay your mortgage with gold.

You're pricing dollars because that's the unit of- You don't go to your local brewery and say, here's a gold coin, sir. Fill my beer mug. Wait, what do you mean? My gold coin used to buy me three beers and now my gold coin only buys me one beer. What's going on here? And the bartender is going to go, I don't care. Get out of here.

Weirdo. It's bizarre. It's bizarre. This is also bizarre. We've spoken a lot about like measuring sentiment and having conflicting reports, which is why I think like a lot of the work that JC and his crew do about like building a composite sentiment reading is the best way to do it. I don't know what's in here exactly, but Goldman Sachs global investment research has a U.S. equity sentiment indicator. Now, again, I don't know exactly how they're measuring it, but like.

based on this, it looks like nothing to see here. I mean, if anything, people are like not excited at all. If it's based on surveys, then let's throw it out the window because then it doesn't matter anymore. I've said sentiment is broken. The vibes are broken forever.

That's my case. All right. Eric Soda at Spilled Coffee has a good one about the cash on the sidelines fallacy. Do you see any of this? So this is one from Charles Schwab and it shows... We've made this short.

in the past. Have we? Okay. But this is the whole thing about all the money. I think the zero percent interest rates in the 2010s kind of broke people's brains on money markets because no money was going in there at all for the whole 2010s because rates were zero. But he shows it as a total net assets as a percentage of the S&P. And then there's not so much cash on the sidelines because stocks are growing up so cash should be moving with it. And then U.S. money market funds as a percentage of S&P as well. His whole thing is saying, yes, there's $7.8 trillion in money market funds. But if you look at it with where the stock market is, that actually makes sense because the percentage is actually going down because stocks are going up.

So if you hold cash constant, it's not like that money's all of a sudden going to come rushing in. And I think we mentioned a couple weeks ago, like if a richer society, there should be more cash on hand. It makes sense. Yeah. So it makes more sense than people are saying. And you were credit to you, you were earlier now and saying that this money is not

coming out of money market funds. That's staying put. I think you're right. Is this next chart for Dan Greenhouse, the same thing? yes that's yeah that was in his piece as well yeah all right here's a good one for you households have a dollar in cash for every dollar of debt the most de-leverage since the early 1990s this is from bank of america households are still in good shape and have the ability to borrow even more money if and when the next downturn hits i continue to believe that that whatever whatever

downturn is unless the AI bubble totally inflates to like epic proportions and then it just pops But even the dot-com bubble popped in the 2001 recession was very mild, extremely mild. It helped that we had a housing bubble to prop people back up. But that's probably what will happen this time again. We'll probably get a housing boom the next time the economy slows. Anyway, I think whatever happens, as long as it's not some crazy exogenous shock, households will be able to weather it by borrowing more money. You know what's coming around the cornerbone? We got earnings season, which is my favorite season, because,

as I keep pounding the table on, I care a lot more about what companies have to say than what journalists have to say, a lot more. Companies have no reason to... That's your new tagline. Listen to the companies, not the investors, right? I'm not to say they're not going to lie to you because, you know, there's some companies that do some shenanigans, of course, but on balance, companies are not incentivized to not tell you the truth.

Now, again, sometimes they cover stuff up, is what it is. but they're not going to paint a rosy scenario in the aggregate when the facts don't warrant that. But this is why, as someone who's a long-term person, a lot of people email me and ask for my thoughts on the, if we shouldn't have them report quarterly anymore because I'm a more long-term person. But I actually totally disagree with that idea.

I think we need to have them report quarterly because I think opening it out longer opens up the possibility of shenanigans. Me too. That's, I think that's my problem with that idea. Anyway. What's this chart from, oh, the Delta stuff? I didn't put this in here. Okay.

I listened to the Delta call this morning. And a few things in there stood out. Delta is now 60% of the industry's profits. Kind of wild. They're killing it. I mean, they're by far the best airline. It's not even close, right? Not even close.

I only fly Delta if I can. The last time that I do too. And I have one of the Platinum Delta credit cards, and it's the only one I fly usually. And I was on a flight with my kids. Where were we? I can't remember the last time we flew as a family. And the flight attendant came up to me. And I felt kind of like George Clooney up in the air.

And they said, hi, Mr. Carlson. Just want to thank you for being a Delta Platinum, blah, blah, blah, blah. And being so loyal to us as a, my kids are like, what was that about? Are you like a celebrity? So they thank me for being a loyal member. Austin, not to brag, the flight attendant came up and shook my hand and said he's a big fan. So I forgot his name, but if you're listening, thank you, sir. That made me feel pretty good.

Do you sneak you a free drink? I've been drinking on flights. Okay. Credit to me, because who doesn't love drinking on flights? Getting a drink on it. I feel like what percentage of people in first class get a drink when you get an 80%? I almost always do, but I haven't been doing it. because, you know, busy.

Responsibility. Responsibility. Growing up. What's the start? Wait, hold on one sec. There was, they also said that corporate travel is all the way back, higher than 2019 levels. See, that's the one I never would have thought.

When people were predicting how the pandemic is going to change the world forever, I would have said, yeah, with Zoom meetings and such, corporate travel is never going to get back to the same levels. Same. All right. So this chart shows that. I think that there's some people and some businesses that just. They like the face-to-face interaction, but they just, I think some people just love that lifestyle.

Being on the road, right? The guys in the polo shirts and the jeans and the boots, right? Those guys have to be on the road, drinking their Miller lights at the bar and, you know, talk about the Astros or something. So the premium cabin revenue is about to pass main cabin, which is pretty wild. And Glenn Hohenstein, who's the president, said, I've acquitted. to this. The car that you drive today, is it better than the first car you had? The answer is probably yes. And you don't see many people going back to cars that are worse. Once people get used of traveling in a certain product, whether it's Comfort Plus, Delta Premium Select, or whatever,

they tend to not go back. Their retention rates are in the mid-80s there. So, yeah. That's true. They didn't have Comfort Plus and stuff in the past. That's a relatively new thing. Luxuries become necessities. But I'm sure that they're also able to jack the prices up on those and people will still pay them. People who have more money, right? Yeah. I'm guessing that's best part of it. Yeah. It's like the IMAX experience. Somebody emailed us about going to Disney. And they said, Disney's charging $200 to meet Santa or something like that. Listen, people will pay it, whatever it is.

But I did say my wife, we're not doing the meet and greet with the characters this time. What a piece of shit sham that was. You get this crappy buffet. No, we're really not. We're really not. That's it. You get this crappy buffet for $130 ahead. That is one of the worst things about Disney.

The food is awful. I don't think they care, really. But the food is not good at Disney, right? No, not great. Also, my wife got after me a little because I said, I didn't want to go to Disney on a podcast a couple weeks ago. Apparently, she still listens to the show occasionally. Are you going?

I stand by my take. Yeah, we're going on Thanksgiving. Every week, she calls me, hey, you want to do this at Disney. I don't know. You take care of it. Wait, Thanksgiving at Disney? That's a great idea.

Yeah, we thought so. Let's talk gambling. This is a great tweet from Dali Bally 2. So on Friday, as the market was having a not so great afternoon, was Oclo positive on the day? I think it was. Yeah, it was. This guy tweeted, I was wrong. Acklo is the perfect stock.

No revenue, no product. Hence, no exposure to anything. If I'm being honest, I have no idea what Acklo does. They're trying to build a nuclear energy, something, something. I think that's what they're doing. All right. So this was making the rounds. The Goldman Sachs basket breakdown

Vier to date performance, and they also break it down by the April 8th to today. All right. Drone stocks are up 370%. Quantum computing stocks are up 315%. Memes are up 123%. Nonprofitable tech is up 111%. Most short are up 98%.

So retail is kicking the shit out professionals. And I got to say, like, using all degenerate themes for the most part. I'm not mad. I, you know, I'm not wagging my finger. Yeah, I think, I think most, most people understand that like, um, you don't think there's a lot of hedge funds in these trades now, too, just probably the smart ones, the smart ones are. All the momentum traders are in these, in these stocks. And you know what? People get wrecked, they get wrecked. This is, this is the market, right? Like, no crying into casino. And also, if I was a younger man, I'd be balls deep in these names. Come on now.

Okay, I wouldn't, but... I know you wouldn't. Good for people who are, yeah. All right, so last week, I believe last week I said, or maybe two weeks ago, I said, the market is cruel. Like, even if we know that a lot of these names, and I guess we can't know, but even if we strongly suspect minus 900, that the odds are against most of these companies sustaining their valuation,

it doesn't mean that the shorts are going to make money. It's just not that easy. So credit to this guy... I can't imagine wanting to short this stuff and, like, get in front of that train and in time it perfectly. No way. I mean, I can imagine it. If you really understand the businesses here

and you genuinely know that these are pieces of shit. Now, I don't know that. But if you are one of these people that have domain expertise... Yeah, but using a fundamental thesis in a mania is, come on. No, no, dude. The timing is all that matters there. And you...

I get it. 100% right. Anyway, my point is, I want to shout out this one guy. Credit to this guy. At Common Sense Play. Tweeted. I'm closing my short on Ionic and Righetti. market makes no sense.

They will drop 90%, but taking the L on this trade. That's a pro move. Yeah, good on him for omitting it, right? Yeah. The market, the market just, it just won't let you make money this way. And maybe the longs will get liquidated,

but the shorts definitely will too. That's just the way it goes. All right, let's talk about crypto. I am a tourist here, but it sounds like on Friday, people were brought out in body bags from crypto. And it's weird because Bitcoin was down, I don't know,

5 to 10% Ethereum. It wasn't like a huge crash. Hold on. Hold on. The Ethereum and Solano were down at one point. I think each more than 20%. The alt coins fell.

Some of them fell like 90%. That's what it sounds like. It was the alt coins and stuff. But it says the biggest crypto liquidation ever from CoinDesk amid market chaos. And they talked about all this stuff. And people were trying to figure out. And they say it was 20 billion,

but it was probably way higher than that because of finance and all this stuff. And a lot of people were pointing to this old post from Brian Armstrong, from Coinbase on at the beginning of September. He said, we just bumped up the max leverage from 20 times to 50 times on international perpetual futures, a bunch of traders asked us for this update, let us know what else we can add.

I don't know if that was the reason, but it sounds like a lot of people were just extremely over levered and it didn't take much of a fall. Yeah, that was reason. It was leverage. So it was just an insane amount of leverage and people got taken out and bought. Again, it just, there was literally one down day in the stock market. And it evaporated crypto, but I guess, and a lot of people are saying a lot of these alt coins, like, literally went to zero.

Yeah. But this is the kind of thing, which is... Bitcoin had $110,000. I mean, it's still a healthy, healthy, healthy number. And yet, look at this chart from Walsh Journal. They show the total liquidations on crypto derivative exchanges.

It makes the FTA... I mean, you can't even see it. This was $19 billion. FTX was two? So there must have just been an insane, insane amount of leverage in the system. And this is a good thing. You know when... You talk about no crying in the casino. should feel sorry for these people, but it sounds like people were up millions and millions of dollars

and probably lost millions. Okay, you could simultaneously feel bad for people. Like, it sucks that this happens while all, like, just being a human being. Like, I'm sorry that happened to you, while also saying, what did you think was going to happen? Yeah, exactly. Right? Like, if you make millions of dollars going 50 times leverage, you can go to zero on the same thing. I think that's just.

Could you imagine being. I'm not laughing because it's not funny being one of those people that got wiped out from the Trump tweet and then 24 hours later Trump says don't worry

it's all good with China we're gonna make it you know it's gonna be fine I mean yeah taco Sunday I don't know it's the whole thing Warren Buffett said before

you don't want to get rich twice if you got rich once and you made five or 10 million bucks in crypto I don't know cash some of it out hopefully there are people

that saw this younger people because it's always younger people. You know, eventually you do this long enough and you get burned. Hopefully young people saw this and said, okay, maybe I should ran in a little bit. But it's insane to me that people were able to put 20, 30, 40, 50 times leverage on and make that much money. And at that point, it's just a game. It's not even real life.

Well, you know what? Somebody tweeted, long-term capital management was using, I think, 25 times leverage. And they got wiped out doing fixed income arbitrage. Right. They're talking with talking basis points. You're using 50x leverage on crypto? I mean, come on. Use your head.

All right. Let's talk private markets for a second. BlackRock reported this morning. I think they brought in $8 billion in private credit. It was the largest private asset, private investment gatherer that they reported. Lots of demand. So they had a report a week ago. Today's private credit opportunity.

And I think I'm on the record, at least I'll go on the record. I don't think private credit is a bit. bubble. I don't think that first brand's blowup is indicative of everything. I'm sure that there are, you know, that it's not the only one, but I don't think it's like a systemic. All private credit is a fraud. It's going to blow up the system. I just, I just don't, don't buy that. As the space gets bigger, there's going to be more blowups. Like, there has to be because it's, it's casting a wider net and there's more businesses and there's more loans. And of course, so the, these, the stories about private credit are going to be amplified because people have been warning

about it. Yep. No doubt. And there's a lot of journalists that are dying for this. dying for this to be a juicy, salacious story. And the first brands one is, and I'm going to talk about it tonight with Josh. But this chart made me laugh. Private credit assets offer a unique correlation to the public markets. And they show the correlation of the prequine private credit versus the Bloomberg ag. And they show it at negative 0.02. Come on.

How is this negatively? If you don't report the NAV, correlation is zero. How is this negatively correlated to bonds? What are you talking about? Well, it's essentially a zero correlation, meaning, like, there's, yeah, that's a... Oh, by the way, I think I was, I said this last week on the show. I tried bottom fishing in the Ares private credit, BDC, and I got stopped out for 5% loss because I'm not that brave, but I think I should be bad. I think I'm going to get back in.

I don't believe that this is going to be like the unwinded of the century. Okay. Good luck with that. My whole thing is just, I think people need to just... temper their expectations with private credit. The returns have to go down. But even if they, if they go down, let's say returns go down 20%, and they go from 11 or 12 to 8 or 9.

Is that still, is that the worst thing in the world? No, that's, I think that's probably my base case. If I had to guess what's going to happen. Yeah, return is going to be compressed because more money coming in, and that's the story of capitalism. All right, this is a great chart. So we've mentioned this data point, 90% of companies in the U.S. that generate $100 million are privately held, right?

I've never seen it put this way. Kind of a faceblower here. I would have thought that like the 90 or the 80-20 rule applies that even though most of the companies are private, you still have more revenues with public companies because Nvidia and Walmart, you know? No, not true. $40 trillion in annual revenue for private companies in the U.S.

Damn, that's a lot of money. And $35 trillion for public companies. So that includes like all small businesses. So like my tailor at the mall right next to my office, Sue alterations, small business. Hold on. I'm sorry. I'm sorry. I'm sorry. That includes that? This is the U.S., the EU, and the UK.

Okay. It's still surprising. Right? I feel like that private number has to be very hard to get, though. How do you come up with those numbers? I'm sure there's a way to back into it. Anyway. Yeah, you're right.

That's surprising. All right. Bloomberg has a great piece. and what I think is called House Rich. America is minting lots of cash-strapped millionaires. So they say millionaires are on the rise, but much of their wealth is in hard-to-reach assets. This is funny. In the Gilded Age, there were 4,047 millionaires in the U.S.

And each one is listed by name in a special edition of the New York Tribune. Can you imagine that? Like they listed just all the millionaires because that's how in the paper. Today, the millionaire households more than 24 million, one in five U.S. households. And a third of those modern millionaires been minted since 2017.

but they're saying it's mostly in-houses, right? For the barely millionaires, people with a million to two million, 66% of their wealth has tied up in their primary home retirement accounts, meaning it's illiquid. They can't access it. Households with $5 million or more had 24% in easy-to-access, bank or mortgage accounts, compared to 17% for those closer to a millionaire mark. So basically it's saying a lot of people have a million dollars,

but they're probably house-rich, retirement account rich, and they can't really... It's not liquid... net worth, to which I mean play the world's smallest violin for these people, obviously. You're still a millionaire, but obviously that makes sense since housing is up so much. There's probably a lot of house-rich millionaires. And housing really is one of the hardest assets to unlock. The wealth, right? You have to borrow against it for a HELOC or cash-out refinance if you want to take some of it out or sell, and then you have to live somewhere, so you have to either downsize or buy a place that's just as expensive, potentially. It is the hardest one.

to actually unlock the wealth. Anyway, being house rich. First world problems, but that's the thing. Yeah. House rich millionaires. Right. They said Gen X added the most millionaire household. This is funny.

They look at all these increases in millionaires. Gen X added a ton. Millennials added almost like three million millionaires. This is since 2017. So a huge leap forward, right? But then they show being a millionaire isn't the same as it used to be. And they show the cost of a four-bedroom home in the New York suburbs, driving two Mercedes, E350 sedans, which I don't know what that is, which those are, a four-year Harvard education

for two children and a two-bedroom upstate New York cottage and a 19-foot C-ray boat. They show the difference in the cost. I'm sorry, this is not being a millionaire. This is being like a deca millionaire or... Yeah, what? So you own a house and you own two Mercedes and you send your children to Harvard and you own a two-bedroom cottage in upstate New York and a boat. Dude, this is the thing.

This is the news that they're giving us because we're outraged, right? We're outraged. This makes people mad because it's nonsense. It's pure bullshit. Right. This is the top, I don't know, 5%, 3%, 2%. Yeah, this is not a thing that just being a millionaire did not use to, never got you there. Who Mercedes, a vacation house, a C-ray, Harvard?

Right. Sorry, that's not being a millionaire, right? That's being in the top, that's like top 1%. Yes, exactly. All right. There was a long article on the jury. Even rich people are a millionaire. Because they look at that and they go,

I'm rich. Why am I not doing this stuff? Because that's very few people do that. There was a long article in the journal about how not great Hollywood is doing. They said at the end of 2024, 100,000 people were employed in the motion picture industry in L.A. Two years earlier was 142,000. 30% fewer movies and TV shows with budgets of at least $40 million began shooting in the U.S. in 2024 than in 2020. than in 2022.

This is surprising me because there's so many more streaming networks now. I would have thought it would have risen for sure. And yet, Hollywood still seems so not great

at giving the audience what they want. Like, for example, Tron opened over the weekend and it bombed. I'm not surprised. It costs $180 million to make. It did $33 million at the box office

over the weekend. My son, wants to see that really bad. He watched both the first two trons. He did. Okay, fine. So George is an outlier, but I should be a consultant. This is so easy for an outsider.

Now, easy when, easy in the cheap seats. No one, no one wanted that one. Michael, are you going to see Tron? Nope, and nobody else is either. Good, done. That should have been a straight to Disney plus streaming movie. Who, the, Tron is not a, this is not IP that anybody gives a shit about. Give people more weapons and sinners.

Like, get the memo. It's over. You will be going on the Tron ride at Disney, though. Mark my words. Supposed they have a good Tron ride. But the problem is, the problem is, when these things bomb, Scott Mendelsohn was writing about this, they blame up the audience doesn't want to see movies. No, we do want to see, we want to see good movies.

We want to see this shit. Right. Again, that should be a straight to Disney Plus movie. Like, they should have more of those as opposed to trying to being in a theater with that. absolute junk I got a lot of emails last week about spending less time on your phone

and I a lot of it was like delete the app come on guys I don't have the app I think I'm that big with dodo what I do is I go on

through the internet see that's even worse than the app but I did somebody did send me something that's an addict's move right there

to go on through the internet but I only go hiding the drugs in your ceiling or something I bought something called a brick. I haven't used it yet. But I think what this thing is, is I think it, like, restricts websites.

So you have to, like, physically hold your phone to the device to unlock it. So I'm going to literally cut my phone off. From Twitter. You know what I family did? And again, I was thinking about this week because I have to reflect on the show last week. I really am only on it during my downtime.

But the problem is my downtime is when I should be with my kids. So I'm on the couch at, like, 7 o'clock or 7.30. scrolling Twitter when they're like, you know, on their iPad or whatever, it's horrible. It's like the worst thing ever. You know what I did that helped me a lot in Twitter? And obviously, to your point, willpower alone is not enough. In these instances, you need to have some guidelines.

I don't have willpower. Like, one of the things I still use it for is I'm catching up on sports, college football or NFL because I'm out about doing stuff all Saturday and Sunday with my kids. And I'm watching highlights. But then you have the auto video feed. And it goes from like a sports highlight to like two dudes fighting in an alley. And it's like, I don't need to see this. So you can turn off the auto video.

video play. So it just, it loops your video. So it doesn't show you these other insane videos that you don't want to see and you get caught on a loop. That's helped me stay off of Twitter more. Like, I'm just watching it for sports highlights and nothing else. Oh, you do have willpower. I don't need to be off Twitter completely. I just need to be off it from like the hours of six to 10. Because during the day out, whatever. All right, anyway. Yeah, you're too busy to do it during the day. All right. Here's a good one, talking about like the news and what we see and what causes all of the anxiety. Max Rosa showed

Oh, this is a good chart. It was great. All right. What Americans die from and the causes of death the media, the U.S. media specifically reports on. So, for example,

heart disease and cancer are the number one and number two killers. They're over, they're almost 60% of deaths, almost 60%. And yet, they are

6% of coverage at the times the Post in Fox News, give or take. 60% of deaths and only 6% of coverage. On the other hand, the biggest, by far, because it's salacious, is homicide, 42, 46, and 52% on the networks. It is kind of crazy.

The causes of death homicide you can barely even see on the chart. I don't even, where does it? Is that 1%? I can't read it. It's so small. Terrorism, 18, 12, and 11. And that I mean, to be fair, the news networks, it would be kind of if they're like, Jerry Smith died of a heart attack today at age 73. He was 250 pounds and...

100%. Drug overdose. But you're right. This is a very good put it in context kind of thing. Even in like local news, and even like Good Morning America that Robin watches, it's always just like, oh my God. It's like weather, yes, I can't. Death hit by car.

It is, it's too much. I pretty much just, avoiding cable news has been probably better for my mental health and even Twitter. I stay away from it at all costs. I want to give a shout out to our colleague, Tadas Ascanta, celebrated his 20th anniversary at Abnormal Returns, which is absolutely amazing. Amazing. The best curator in all of finance.

I still, like, every Sunday he does the top 10 posts of the week. He has personal finance posts. He has an advisor newsletter. Every day he's putting out the best links from everything. Like, if you, people ask me, like, how do you have a filter in place to read the best stuff and stay up on this stuff? said, whatever you do, just read abnormal returns every day because he doesn't miss anything.

Congrats, Todd. That is impressive. Wow. 20 years of doing anything is amazing. But think about how many people that we, when we started blogging back in like the early to mid-2000 pens, there was all these other people who had blogs. Think about how many of them have fallen on by the wayside and just stopped doing their blogs.

And like the fact, like survival is a big, big piece of it. Just keep doing it. All right, recommendations. I will start. You got me going on. audible books, and now I'm hooked. And it's got me to the point where I don't listen to podcasts as much. Like, I'm like, why do I need this stupid pop culture or sports podcast?

So I listened to Breakneck by Dan Wang. He's been on a podcast. Yes. Wait, I put this in here. Oh, you did? No, I put this in here. Did you listen to it too? Dude, it's so fucking good.

Okay, it's very good. Wait. I finished in like a week. How old are we? We're listening to the same audio book and we don't even know it. I, um, I listened to it in a week. I finished it. I just thought his whole thing about when he first said the lawyers versus engineers thing,

I felt like, oh, that's clever. It's cute. But he really like point by point kind of broke it down. Like, okay. So, dude, that was, wait, hold on, just for the audience. Because you're right, that hits so hard. Explain what he meant by that. So the whole idea is that the United States is run by lawyers, right?

Almost all the politicians, like two thirds of them went to Yale Law School or Harvard Law School. And all of our politicians are lawyers. And they put rules in place to make things, like protect people and make sure things don't happen. Yeah, you can't do anything. And yeah, you can't get anything done. China is run by engineers. They build stuff. And I thought the greatest thing about this book is that I thought he did a wonderful job

of looking at the cost and benefit of the pros and cons of each system. And he looked at the great things China can do and how they can build stuff and these bridges and like the infrastructure and everything is clean, all these parks. And it's amazing. But they have like, they seem to lack common sense. I think that was what he was getting at. And a bit of humanity. Yes.

And I thought that I don't think enough, maybe in the 80s and 90s they talked about more, I don't think enough has been made about how bat-shit crazy the one-child policy was. Like, are you kidding me? And the fact that I didn't realize, they literally have a department called the propaganda department. I thought he was joking by that. It's literally the name of a department. So, anyway,

so did you come away reading that book or listening to it feeling better or worse about, like, us versus China in the years ahead? Because I don't, I still... I mean, I'm not done with the book, but I feel like I'm in it enough that I can conclude that it's going to be tough to beat them. Those, those people are.

They seem to, they can build stuff. Like, if we went to war with them, their production, they would, they would probably crush us, unfortunately. But I feel like they have a very, they have a lot of blind spots. We do too, obviously. Yeah. But I feel like they have a lack of common sense about. We can learn a lot from each other. Yes.

I think that was the point that like there's, but we're mere images of each other kind of. Like the fact that like we need us and they need, they, we need us and they need us and they need, I can't say it. We both need each other. And because they like to build so much in manufacturing is such a big part of it, like the fact that we're consumers like, we're kind of a yin and a yang with each other.

Yeah. It's a very, very good book. It's the best, and I'm admittedly a macro tourist on China, but man, it was a good book. Yeah, it's really, really good. That was the best book I've listened to in a long time or read, whatever.

Yeah, no. Can you say you're reading the book have you listened to an audible? They're tough, they're a tough competitor. I don't know. What else you, I'm listening to a book. I know it sounds weird. say, but listen, I think you've come to

come to terms with where we are in life. That's so funny to read the same book. I got a show for, yeah, it's very good. I listen to the whole thing in the week. I got to show the lowdown on Hulu with Ethan Hawk. It's a good, not a great show, but they basically just said, Ethan Hawk, we're going to let you cook. And he's like way out there.

He's doing all sorts of Ethan Hawk thing. He plays an investigative journalist who gets caught up in this crazy scheme and, mystery, and it's not like a prestige kind of show. It's a little silly at times, but if you're an Ethan Hawk fan, that's all the matters. It's just Ethan Hawk cooking.

I get Ethan Hawke and Jude Law confused. The names, not left faces. I'm not sure why. They both kind of came up with the same. You've seen Gattaca with both of them in there, right? I've never seen Gattaca. I know you like that movie. Oh, really? You have to watch it. That's a fantastic movie. Okay. I really, I enjoyed the shit out of Black Rabbit. I finally wrapped it up. I really enjoyed it.

Yeah. but it's just a lot of bad stuff happens, right? Yeah, I think I thrive on misery for my entertainment purposes. And we're one episode away from finishing task, and that show has gotten better as it's gone along. The last two episodes of Task have been fantastic. Okay, I'm a little bit behind there.

We're going to catch up. Speaking of misery, somebody said, how come I've never done a favorite horror movie list? I'll do it next week for the Halloween season. But I'm going to... I thought you did this before. Have I? I can't remember.

I'm going to, but I'm going to exclude, like... Halloween and scream. I'm going to do stuff that's a little bit more off the beaten path. Well, that is what you do, yeah. Yeah. How about this?

I have a theory, though. I think horror movies are the new superhero movies. I think Hollywood is getting lazy and all they do is do these horror movies at a low budget. I think that's the new, like, eh, let's just another horror movie.

But you're late, though, because that trend has been in place for the last five years, and I think it's finally peaking because A-24, not A-24. Oh, my God. Who's the dude?

Oh, was it Jason Blum? Who was on Bell and he's podcast a couple months ago? Oh, Megan, too. Bombed. Okay. I just want more comedies. I don't know why we don't have comedies anymore. It's really depressing that we don't have more comedy movies.

It's like no one wants to laugh. I don't get why there's not more comedies. They don't make money. That's it. I can't imagine that people won't want to go see good comedies again. There's a new one coming out with Seth Rogan and Keanu and Izzyz and Sari. And it looks hilarious. It looks dumb, but very funny.

I can't wait. I just want more dumb funny movies again. That's what I grew up on in the 80s and 90s and 2000s. What happened? Hollywood was letting me down. All right, so we mentioned breakneck, which was a very easy listen. Because on my speed, it was like four to five hours. It's a 280 page.

Wait, what speed do you go? Do you go? Well, it depends. If I'm in the shower, I slow it down to one times because it's hard to hear. But if I'm on the move, I am 1.7. I'm at a two now Okay I'm comfortable with a two

And I just Every time I take I take my dog for a walk every day You know And put them in on that And listen to it And I can't believe how quickly You're able to get through a book I listen to the whole thing in a week

All right On the flip side though This book took me two weeks I listened to I've always wanted to read this book A Team of Rivals By Doris Kurns Goodwin One of the best historian authors ever

My dad is like the biggest Lincoln fan ever he's read all the books, and that's his favorite one. You know, it's funny, as I'm cleaning out unpacking my office, I, this was in a box. I bought the time, the time, an illustrated history of his life in times. Abraham Lincoln, obviously, I never thumped this. It's a huge magazine. But I will.

But anyway, I read the, I listened to the book. The kind of person who just doesn't exist anymore, right? No. It was too long. I mean, it was, it was tough. It was, it took me, I mean, that took me like 20. 20 hours I think. It took me two weeks to listen to. I'm glad I listened to it because I never in a million years would have read it. But on the flight home, I mentioned last week that it's been a while

since I saw a movie on an airplane. I said, you know what? I want to watch Lincoln. See what Daniel Dayloos is all about. All this Daniel Dayloos, Hullabaloo. And it's not streaming. You have to like pay for it, which I would have done whatever. But it was on Delta. So I watched Lincoln Perfect Airplane movie Because it's a slow drama And you're not I remember not

It's kind of a tough watch It wasn't that great I didn't think Exactly You're not gonna watch it on your couch Because it's boring But in the airplane Especially after reading team of rivals

And having all these characters Being brought to life Uh Holy shit Daniel Day Lewis I mean Hot take he's good He won best actor that year And yeah

A great performance Not a great movie You're not gonna watch us at home but I really enjoyed it, given the context of the book. Did I learn anything? Yeah. Am I going to forget it all in about a week? Probably.

Biographers, just cut 50% of the junk you put in your books, right? A lot of it is unnecessary. A lot of fat, as usual. All right, a lot of fat on the show, you might say. We went an hour of 15, read some bad emails. I didn't talk about AI at all. You were the only one who brought it up today. It was pretty light.

Pretty light. What else is going on, Ben? Anything else? That's about it. Thanks to the production team. As always, I don't shop.com. Do you have any new hats yet in yet or not?

Oh, I don't know. Okay. Animal Spirits at the compound news.com. We'll see you next time.