Animal Spirits Podcast - Did Trump Blink? (EP. 405)

Episode Date: March 26, 2025

On episode 405 of Animal Spirits, Michael Batnick and Ben Carlson discuss: how to become indispensable at work, the stock market comeback, the wealth effect, international stock outperformance, who owns the US stock market, 100 baggers, the Jerome Powell rally, watch what consumers do not what they say, how the GFC messed up the housing market, the shrinking middle class, Severance and more. This episode is sponsored by Kraneshares and Fabric by Gerber Life. Explore the KraneShares China & Emerging Markets Internet ETF Suite at: https://kraneshares.com/kweb-suite/?adsource=compound Join the thousands of parents who trust Fabric to protect their family. Apply today in just minutes at: https://meetfabric.com/spirits. 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 Animal Spirits is brought to you by Crane Shares. Ben, yesterday we had a conversation with a portfolio manager who manages international stocks, emerging markets. And we were talking about just at the end of last year, a real crescendo of investors just absolutely throwing in the towel and say it's been 15 years. It's never going to happen. And we spoke with Brendan or Herne from Crane Shares about K-Web probably sometime last year.

And Brendan was, I don't if I misremembered this, but borderline despondent. it was it was about the lows as it could have been for yeah sentiment and and since then international stocks have done well kweb is up more than 20 percent this year Chinese stocks are doing well big time comeback yeah i guess it just goes to show you that the sometimes the sentiment stuff is correct right we just had to keep going a step lower a step lower a step lower you know it's darkest just before you die but now there's light now there's light now there's light on international stocks. And if you want to take advantage of the sentiment change and get exposure to the Chinese tech giants, K-Web is a way to do it. Yep, crane shares.com to learn more.

Today's Animal Spirits is brought to you by Fabric by Gerber Life. Fabric by Gerber Life. Easy term life insurance. You can get done right from your couch, online and on your schedule. It can be covered in under 10 minutes. No health exam required. I've been thinking a lot about insurance lately, actually. Oh, yeah? Yes. Just it's a family thing. Protect. It's a family thing. Protect It's the kind of thing that I think, I don't know, means more to you when you have life events and kids and middle age and I think just the ability to do it like this. For Fabric by Gerber Life, you do it on the app or you do it on their desktop. It's very simple. It's very easy.

I think this should be kind of a painless process because most people just don't want to think about this stuff. So I think the easier you make it for people, the better. So join thousands of parents who trust Fabric to help protect their family, plan just minutes at MeetFever. That's meatfabric.com slash spirits. That's meatfabric.com slash spirits polishes issued by Western Southern Life Assurance Company. Not available in certain states, prices are subject to underwriting and health questions. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All

opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Ben, it is really nice to be back in our natural habitats. Yes, we did live shows in the elements last week from our hotel at the stage. We were all over the place. I learned that bombing in front of you, you know, if you don't laugh at a joke, no big deal.

A whole room full of people or a group of people, what do you call those people, a gaggle of people? Just blank stairs? Not so great. Not so great. I tried to do some crowd work, didn't go over so well. Here's how I'm feeling my middle age. So I turned 40 yesterday, and I introed a group, I emceited a group of speakers, and one of them was, was our friend Doug Bonaparte. Then I said, Doug, watch this. I'm going to say a joke that nobody's

going to laugh at. There's just to be blank stares. So the topic, the panel was around generational wealth. So I got up there. I'm on the mic. And I said, generational wealth. What is it? Allie G was 20 years ago. Nobody, except for Doug's wife who went like this, put her face in her head. her face in her head who put her face in her hands and just shook her head not a single response so I called you out yesterday

for telling you a reference 20 years old we can't do that anymore doesn't play I know and no people young kids these days don't live and die by movie quotes like we did nah

and you made a good point because movies aren't as quotable as it used to be they really aren't and memes are the new movie quotes it's true right so here's all I'll say about my 40th birthday

I'd not have not done a ton of reflecting. It's a round number, a milestone birthday. But one thought that I had was- You don't want to do a tweet thread about 40 things you've learned by 40? Okay. Nah, I'll skip that. But now I do feel a little bit middle age in the sense that I've got 20 good years left, right? Ish, maybe? Not 20 good years. But like, I've got two blocks of 20 years, maybe. I've got 40 to 60. Assume that 60 will stop working, give or take. And then 60 to 80, I mean, nobody looks forward to 60 to 80, right?

No, once you get there, you say, oh, well, 60 is the new 50, or do you talk yourself into it? True. People living longer these days, you'll have robots helping you at that point. So, well, Barry's, uh, Barry's in his 60s, and he definitely feels great. Like, I don't think that he feels like he's done. He was frolicing in the pool with us last week in Miami, like a young buck. He would, he jumped on Chris's back. Yeah.

Speaking of Barry, Barry's got a new book out. He does. So, Barry wrote a book. We'll have them on the pot in a few weeks called How Not to Invest. And always a contrarian, Barry said, you know this trend of books getting shorter because people's attention spans are decreasing? You can go the other way. Barry wrote a 475 page book about how not to invest per the title.

I love the idea. A lot of incredible nuggets. I think the book is applicable for anyone, but especially for people that are. towards the beginning of their investing journey. Now, a book is never a substitute for doing, right? Like some lessons you just have to learn. But if you have these lessons in the back of your head, as you get started and progress through your investing journey, you will definitely be better off.

My whole thesis on investing is that there is not one way to invest. There's a lot of, there's a handful of different ways that you can be successful as an investor. We've talked to and met people who would invest completely differently and they've been unsuccessful. But there are only a few ways that you can be unsuccessful. I think if you realize what the unsuccessful ways are and try to avoid them, that's almost easier than figuring out like the perfect way to invest. And that's what Barry does. It's a very pretty book. Like the way that he set it up and laid it out, I told him it's, it just, it looks very nice. I love the look of it. Despite the length, extremely readable.

Yes. Right? And very relatable. And it's, Barry does a great job of weaving in real world stories and analogies to help you better understand investing, which is the best way to get people to remember this stuff. So pick up a copy. It's great. By the way, how many forwards or blurbs do you think Morgan has done by this point? Every new finance book is blurbed by Morgan Housel now. That's like his second job.

I think Morgan put it in his bio, retired from writing forwards. All right. Hey, listen. You sell eight million copies. I'm going to ask you about a few forwards. That's what it is. We get a ton, a ton, over the years, a ton of questions from young people about breaking into finance or how do I work for this firm or how do I get this position? All these types of questions, right? Like, how do I make my mark? How do I become indispensable? And it's one of those things where I always feel like career advice is the kind

of thing where you can't give your own career advice and say, tell people, just do what I did. Yeah. Because so many times it's circumstance and it's luck, but there are things that you can do. And I think one of the things you have to do is just don't tell me what you're going to do, show me what you're going to do. Right? And I think this has happened to us a few times over the years where we've had people come to us and just say, hey, I'm going to help you guys do this.

Right? So why don't you tell Matt's Exhibit A story on how this all got started? So I started creating prospective client decks in 20. 2013 on PowerPoint, right? That's what you do. You create a chart in Excel, you copy and paste over the PowerPoint, you drop in your logo. And over the years, it snowballed into like Frankenstein's monster of a deck. How many different iterations have we done? Dozens and, I mean, it's a lot. The reason why the client, prospective client deck is so important is because when you are being shown a visual, it is borderline.

impossible to simultaneously listen to the words that people are saying and also look and take in the visual, the data, right? So in that scenario, your eyes completely dominate your ears. What the person is saying is almost background noise. You're just looking at the visual. And it's either it's confusing, it's pretty, it's sloppy, like it makes you feel a certain way. And when you're showing this to somebody, and it looks like, like, we, we, our deck was okay, but it wasn't great. I think we, we thrive, like, in spite of it, not because of it.

We've always wanted to make it better over the years, but we just. Yeah, and it's hard. It's hard because sometimes the, you know, the data is coming from different places, the sources, the charts itself. So we went through our routine audit with regulators. And at this point, we have probably over 100 slides. Now, we use Canvas, so it's not like the, the advisor showing the client 100 slides that would take six hours. So they get to pick like their favorites. But so I got the deck back approved and I'm looking through it. I'm just scrolling. I'm like, nope, that's it. Can't do this anymore. It's time to get serious and find some sort of graphic designer. Like we have all the data. And if we don't have it, we could find it. What we needed was a professional deck. And

literally, later that week, I get an email from Chartkin Matt who said, hey, found you guys in college, fell in love with finance because of the Tom Lee episode, got a job working for Tom Lee, learned how to be valuable. And he included a PDF with 15 charts, all Ritolt's wealth formatted. And I'm like, you got to be kidding me. So long story short, we hire Chartkid, as listeners and viewers of the show know. We hire Chartkid to rebrand our deck. Take all of this disparate data and clean it up and make it just

stunningly beautiful. We've been creating charts for years, but they've never had the same look or feel or flow. It's just, they haven't looked

as nice as we'd want them to be. So, yeah, so chart kid Matt made our deck, made it hum. He just started showing up at the office, remember? And he's like,

I'm going to work at the office now. And he like, he just sort of, it was going to be kind of a, a part-time thing at first, right? It wasn't going to be full-time. And then we started leaning on him.

And he kind of said, listen, anything you need, I am here. And he started sending off chart ideas. And then we would bounce off ideas. And he'd send it back. And he'd get it done immediately. And he, right away. Became indispensable to us. That we thought, we said, now we can't live without this guy.

Because he's made our lives easier and he's made our lives better. And the stuff that we do in need and we'd never realize we needed him until we had him. Not only is Matt talented, but in the office, just he lights up the room. He has such a great personality. When boxes come in, he unboxes. He does everything that he's not asked to do. He's just a great person. We had the idea to turn this work into a separate business in which advisors can white label

chart kids charts. So the company is called Exhibit A. The URL is Exhibit A4Advice.com. We've got over 100 charts. They're updated daily. The economic charts are updated, of course, monthly as the data comes out. And all you have to do is upload your headshot, drag over your logo. It gets color formatted.

You can do different color schemes that you can do. Yeah. Compliance disclosure. So it's a compliance hack as well. And you've got client communications for days. So not to brag, but over the years, I've gotten hundreds and hundreds of, questions from advisors because they have to get it through their compliance hey ben can i use this chart you produce for your blog can i copy and paste us or can i use it and source you

and now you can literally take the charts that we've created over the years and make it your own yeah and use it it's it's such a simple program to do it too that that matt and his team is created um so we launched it last week at future proof and uh the signups and more importantly the feedback that we've got over the last seven days has exceeded expectations so um We are super excited about it. And follow chart kit, he is, he's fired up. Okay. Let us talk about the stock market, shall we?

Would you say Trump blinked? I think the stock market won this round. Yeah. Fair? Yeah. We're going to be flexible on tariffs. We're going to walk back some stuff. The market pushed him.

And, yeah, he had no other choice. What was he supposed to do? Well, he, he, what do mean he had no choice? The market was not going to let him. this keep happening like that there was not going to be no give and take yeah but he could have i mean he didn't have to give anyway he did he blinked um and so no hey listen you can't argue with the stock market it's like having an argument with their wife you're going to lose uh all right i'm i'm going through mike secardi's feed he had a lot of good charts yesterday uh all right

xly up 3.8 percent best day since november 2020 now of course a lot of that is tesla which is what 10 percent xly is consumer discretionary that's tesla and amazon for the most part. It's like 50%. Um, IWM, that's Rolls at 2000. Best day since the election. U.S. Stocks Best Day versus Internationals in more than four months. Interesting.

The retail ETF, XRT, best day since Thanksgiving. Homebuilders plus 3.2% best session in four months. The VIX plunged to 17.5. So it is premature to say that the correction is over. because who knows, can revisit the lows. But it was a nice bounce. It was definitely a nice bounce. And this is part of, this is not a victory lap,

but this is part of what I was trying to say about the problem with selling out of emotion. It is the easiest thing to do. And if you sold last week or two weeks ago and you're now feeling regret for off selling, what do you do now? And God forbid, not God forbid. But if you're like, all right,

I'm going to get back in, bad decision. I'm not going to do that again. And then we roll over from here. Do you get back out? Yes, exactly. You can't make it all like outcome-based, obviously. But if you make that decision, you have to have what's next? Like, what are our Wall Street Journal readers from last week? What do they do? The people who got out and set them out, the volatility is too much, the uncertainty's too much. Right.

Now what? And we're talking about a week here, whatever. But I looked, it's, so year-to-date, this is through Monday. The S&P's down 2%. Over the past year, it's up 10%. So I know for some people, it feels like the sky is falling, but the stock market is not in a terrible place. This is nothing still. That was the problem is that like just contextual, it was a baby sell-off. Now, I know that there was individual names that really got bombed out. But for the index itself, now again, the Russell was down close to 20%.

NASDAQ was down more than 10. But the S&P was down 10 and the VIX was what, at 25, 26? So if you're, if you're feeling like, uh-oh, like nervous sweating, like, and I know it's, it's all political, so it's not the stock market yourself. But anyway, rambling here, but, uh, but wait, wasn't this a good, another like feather in the cap for diversification? Because everyone said, what happens when the mag seven rolls over? And the mag seven rolled over hard.

It was on 20, 25 percent. And the market was only down 10. So guess what? The rest of the market picked up a slack. True. So the wealth effect is going to be put to the test. Although I guess maybe if the market snaps back, maybe not. Yeah, so this is Mike Byrd from the economist.

He said American households have never been more exposed to the risk of a stock market selloff. At the end of last year, they held $38 trillion enlisted equities. Stock wealth now runs to 170% of disposable income more than double the long-term average. And he's just saying, listen, there's more people invested in the stock market. It's a bigger percentage of everything for everyone. I go back and forth on the wealth effect. Because are people really selling their stocks to spend? money. Is that what's been going on for this whole?

No, no, no, nobody's saying that. Or you're saying it's just all psychological. Yeah, because, but on the other hand, you have people who say, like, listen, I don't feel any wealthier just because my house doubled in value. I don't spend more money because my house doubled. So I go back and forth on what the actual impact of this is. Me too. But even though nobody would say that, I think it's like subconscious. And it is, it is vibes all the way down because the only way that the wealth effect exists is in a good economy, right? And you're more likely to be spending in a good economy when you're employed

and you're not worried about getting fired and you're getting raises. So it's sort of circular. I don't know if it's necessarily the market and your house that's driving your spending, or is the economy and your spending driving the stock market? Because then you get back to the fact that we said, remember, the top 20% of households or 10% are doing almost all the spending. And they're the ones who are in the stocks, too. So is it only impacting that group, though? Because, you know, the top. 10% owns 90% of the stocks. Right.

But I do think that those big spenders are more likely to pull back. Because think about how many stock-based loans there are at there. Yeah, that's true. And in a right, for a lot of people, it is psychological. Even if some people say, no, steady-handed, whatever, there's got to be something there. Okay, last, I think it was last week or two weeks ago, we talked about just the markets are constantly getting faster. I think we talked about that future proof.

I went over the UBS Global Investment Yearbook, which is an annual update. I think it used to be Credit Suisse, then UBS bought them, so now it's the UBS. It's like a trade in the NBA or something, right? We're trading the yearbook from Credit Suisse to UBS. So they look at the biggest crashes of the past 100 years. They look at the Great Depression, the dot-com bus, the mid-1970s, and then the GFC. And then they look at real drawdowns using inflation, and then they look at how long it took them to come back. And obviously the Great Depression was the longest one, but each success of one gets a little shorter.

And the 1970s is shorter, the dot-com is shorter, than the Great Financial Crisis is even shorter. And this all makes sense in the information age stuff, but it also makes sense in the fact that the government is just more heavy-handed when there's a crisis. And they bring it back from America. Because if you read about the Great Depression, the government and the Fed made it worse. I read Herbert Hoover's biography. And he was like denying that there was even a depression. He wouldn't like, he didn't say anything, the public.

Nothing to see here. Everything's fine. He wouldn't even acknowledge it. Yeah. The government and the Fed do not come out. And they learn from those mistakes and got better. And I think that's one of the reasons that you see these crashes, these V-shaped recoveries not last as long. You know what else had a V-shaped recovery? We'll get to later. Severance? Severance. Big-time V-shaped recovery. I sold way too quick there. I timed to market. I mistimed it. I panic bought back in. It happens. All right. Then I assume I should pick it back up.

Oh, okay. You haven't. Okay. The, the, the, Okay, say before recommendations. Okay, so speaking of chart kid, Matt, he did this one for me. I wanted to look at Europe versus the U.S. going back to 2006, which is when VGK started. That's the Vanguard European ETF. And I wanted to look at the spread between the two of them, because as of last week, Europe was outperforming the U.S. by 18% this year. Wow. Maybe it's narrowed a little bit.

And that is the highest we've seen since 2006. There hasn't been a double-digit outperformance by Europe. over the U.S. in that time since 2006. The previous user annual, of course, 2025 isn't over. Yes, 2025 isn't over. Just through this time frame so far, yes, 2025 is not over yet. But the outperformance we're seeing is something we haven't seen in a very long time. All right.

So let's talk about this for a second. What is the takeaway? Because people that are only U.S. based and have been for the last decade could say, so what? Yes. I was supposed to be diversified in international stocks because for seven weeks, international is outperformed? So there's this great Peter Bernstein quote. And I think he is one of the people who maybe got lost in like the investing legends.

I think his stuff is fantastic. He's on the Mount Rushmore of finance writers. I know he's an investor too. And so he had this quote, and I'm paraphrasing here, it was like one of the benefits of diversification is not just risk management. He said, diversification is also an aggressive strategy because you don't know where your next winner is going to come from. So you could look back and say, yeah, ha, ha, Europe is, look at what happened last year. Look what happened three, five, ten years. Europe is still getting smoked. But it's the future

that matters. And if Europe comes back and foreign stocks do well in the future, that's when diversification matters. Such a good point. That's such a good point, Penn. Investors make decisions, obviously, because we don't have future performance. But they make investments. But they make They make decisions looking backwards. Yeah. They make decisions like, well, what would have been the best investment for the last five years? And I'm going to do that. Yes.

And honestly, sometimes that does work still. Yeah. Well, it has. It worked for the last 15 years with the U.S. If you would have done that with tech stocks in 2015 and 2020, you know, you would have kept doing well. You know, eventually that doesn't work. I've said this before, but first level thinking really won for the last 15 years.

Big time. I remember somebody said to me, the next Apple is Apple. in 2015, and I was like, you dumb bastard. Right, they were right. And they were right. So I blame Howard Marks for me not owning enough cues. All right, back to Mike Sicardi. He shows equity ownership by a household, and this is U.S. versus UK and Euro area.

And this is stocks as a percentage of household financial assets. So that's cash, stocks, bonds, collectibles, housing, all that stuff. In the U.S. it's 34%. and it's been rising fairly steadily. It was down to 15% in the great financial crisis. But in the euro area in the UK, it's only 10%. And it has basically been there since 1990. That's amazing to me how low it is there.

And I told you I've done some speeches overseas before, and they've talked me about this, and they say, listen, everyone in the past, our wealth was tied up in real estate and bonds. And that's it. We never had to own stocks. And then rates went to negative in Europe. people had to like catch up and they're figuring out what stocks are and the foreign ownership

percentage is rising but there's still a lot of room for households to get out of the action here what a wild chart wow right doesn't that make you kind of bullish for the future that these people are going to have to realize eventually like we need don't stocks international yeah foreign investors it's going to happen don't you think i don't know why why does it have to it's cultural it's like it's a whole different thing I think we get there eventually. I'm going to translate my next book into British. I'm going to use Wanker, and instead of calling index funds,

are going to call them trackers. And it's going to help the UK environment for investing. All right, Ben, you love this chart from Goldman Sachs, ownership of the U.S. equity market. Yeah, speaking of. So this one comes from Goldman Sachs, and they show ownership. And I think this is another form of diversification that is underappreciated. In the 1945, households owned 95% of...

stocks. And I think they mostly bought and held and owned them for dividends, like GM and AT&T and such. And now households still own the stocks in different forms, but now it's it's through ETFs and mutual funds. Oh, whoa, whoa, this is a, I know you have to break it down somewhere, but the lines are weird here because don't households own the mutual funds and the ETFs? Yeah, that's what I was saying. But it's just, it's a different. So in the past, they literally just own these shares. And now, yeah, you know, so it's, it's, it's the households still own them technically. But they're through these different vehicles. And I think they're smarter or they're more tax efficient. And that's the point is that like, I think having these diversified

forms of investing is actually a good thing that it's spread out and the holdings are in better vehicles. Interestingly, the percentage of the market held by foreign investors has gone up a lot. It's now 18%. It's gotten a lot bigger. You can see it really widening, right? Yeah. That is interesting. I wonder if that's counted in the previous chart. So in the previous chart, we're looking at listed equities of household financial assets. Are our stocks in that chart? Probably. Yeah, I would think so.

But if you look at people, there's the people who worry about index funds and ETFs, index funds and ETF share of the U.S. stock market is about the same as foreign investors. So it's not, you know, in the fund industry, it's 50% or so, but in the over overall stock market, it's one-fifth, so it's not as big as you think. Or, sorry, 15%. Active mutual funds are still bigger than ETFs. Anyway, yeah, great chart. Robin Wiggisworth, the bond market is still not worried about a recession.

So can we say that if that little freak out was the correction and, yay, it's over? Who knows? Did the bond market get it right? Because it didn't freak out? So you look at the high-yield spread, it ticked up a little bit, but it's still way lower than it was in 2022, 2022, 23, 2024. Even he shows the junkiest stuff. So, triple C and lower is ticking up a little bit, but still very, very low spread.

It was, so the triple C is, which again, as Ben said, is like the junkiest of the junk, the lowest credit quality. Even through this like spike, it's still below where it was for basically all of 23 and most of 24. Exactly. There's not a lot of worry in the bond market. So I keep trying to figure out, is the bond market going to be the tell, or is it going to be the rearview mirror where, like, it plays catch up very quickly when the risks are actually here for recession when that happens? I defer to the bond market getting it right.

It's not going to always, it doesn't always, but. Okay. That's possible. No leading indicator is perfect, but I trust this more than stocks. That's fair. I agree that. These were some things that I were saying, like in the last two weeks, that made me a lot. little bit more optimistic than I think a lot of people. Number one, credit spreads. Number two,

just where rates were. If we really were going to a recession, I don't think, how low did the 10 you get? I think the 10 you would have had a three handle. Yeah, it's still above four. Number one, the VIX. And I know that there's all sorts of things about the structure of the You just did buzz from home alone there. What I say? You know where he goes, A, two, and D. All right, and finally, purple, I thought that the coins would have like really been crashing. And yes, they were down whatever, 30%. But I thought, you know, crypto did stabilize before everything else, didn't it? I thought Bitcoin would have gone to like, you know, below 70 if there was really going to be a global melt then.

Yeah. Yeah, you're right. So. And that counterpoint, one of the, one areas in the market that that is legitimately giving cause for concern are the consumer discretionary stocks on to performing the staples in a meaningful way of the last two weeks. weeks. That has since stabilized a little bit, but that was definitely a feathering the cap of the bears. And talk to us next week or two weeks. Maybe we're rolling back over. Exactly. All right. Good Bloomberg. Private credit firms are pushing boundaries to win large deals. And we've been wondering, what are the actual risks to private credit? I think this is one of them. So they say private

funds are grinding down margins and cranking up leverage to win business over their liquid peers. So they're saying because credit spreads are so tight, which we've said, and there's so much money, the deals are so much harder to get, that they're having to use more leverage. and go further down to credit quality to get the same yields. And this makes sense to me as like the people have been wondering about, well, is private credit going to blow up? And I think the thing is just you're taking on risk of your loans and you're using more leverage. That's the risk of returns being lower.

Yep. Right? That makes sense to me as like a risk of your manager taking on too much risk. Instead of saying, well, the yields should be 9% these days instead of 12 because things have changed. No, I still want 12. I'm going to push the limits to do it. Yeah. I don't know if there's going to be like a, you know, a blow up, a day of reckoning as some people are rooting for in the private markets.

But I think, I think you're spot on it. It's going to be lower returns, probably. All right. From Bespoke, they looked at 100 bags of the past 25 years, which is pretty impressive because that's going back to the height of the dot-com bubble, right? Which is not a great. The returns from the dot-com bubble are not great. I think it's like 7.5% per year. It's not awesome because we had that last decade.

And so they've said 19 stocks in the Russell 1,000 have been 100 baggers in that time. Monster is the biggest one. That's a thousand bagger. Invidia is second. There's some surprising ones on here. Decker's outdoors, which makes Ugs and, how do you say that? Hoka shoes. Oh, they do?

Yeah, and Tiva. I didn't realize they all. Oh, I didn't know that. I still haven't gone down the middle-aged dad route with those shoes yet. Hocus? No, still not got there. But like Old Dominion freight and tractor supply, I mean, apples down there. O'Reilly Automotive.

AutoZone. There's some surprising stocks on here. Fair Isaac develops credit scoring and analytic software. Right? There's some surprising names on here that you wouldn't expect. I haven't heard a lot of these companies. NBR, a home builder. It's the, yeah, it's kind of the, there's not as many tech stocks on here as you would think. It's pretty much just Nvidia and Apple. Huh. Okay. Ben, we launched an ETF? A million people sent us this. This is from Eric Belcher. Chunis, Vista shares filed an animal spirits ETF and a two-time animal spirits ETFs, which will hold the five fastest growing two-time single-stock ETFs. Oh, wait, what is it?

Yes, these things are, so again, getting back to the people who worry that index funds are going to cause problems with market structure. I think this, this, so this is the five fastest growing two-time single-stock ETFs. So this is two-times Tesla, two times Nvidia, those kind of stocks. When you say fastest growing, but, uh, What does that mean in terms of like assets or price or what exactly? I'm guessing it's a momentum strategy, but yeah, I didn't, I didn't go. All right.

So this is like a, this is like a vol of what, 175,000? Yeah, so this is like momentum on top of momentum on top of momentum on top of leverage. And they have a two times one. So, yeah, I don't think we're going to attach our brand to this one. But these kind of things, like when you start doing the Russian doll of these ETFs, like this kind of thing like, to me seems like it's a flash crash waiting to happen. Yeah. Right?

I don't know how, I don't have enough smarts to know, like, if these kind of products could blow up. But this kind of thing, to me, this is, this is way scarier than all the money in index funds. You know, pretty impressive that, as far as my memory goes, the last flash crash in the market, that was like market-wide.

That was 2010. 2015-ish, there was one maybe. Remember we had the ETF dislocation? Well, in 2020 with bonds. Yeah, but you're right. I'm surprised we don't have more of them to tell you the truth. Pretty impressive. If the algorithms pull back, I still remember that.

I remember that day in 2010 when we had a flash crash, just sitting at my screen all day. Like, what is happening? It was 6% down day or something, I think. All right. Bank of America, biggest foreign selling of U.S. stocks since March 23rd. That's interesting. foreign investors dumping our stocks. Oh, foreign investors dumping U.S. stocks.

Interesting. Now, now, it's a dollar level, not a percentage. So when you correct for the dollar level, and you see that they now own 16. Is that trillion? Wow. 16. Wait, how is it that high?

How big is our stock market? Remember, it's 18% of the stock market. Goldman says it is $93 trillion. Wow. That makes sense because it's 18%. Also, the selling of U.S. stocks and foreign investors make sense. We just fact-checked ourselves there, right? There we go.

All right. From Zero Hedge via Goldman, or Goldman via Zero Hedge, I guess. CTAs, commodity trading advisors are short, $34 billion of U.S. equities versus long $52 billion of European equities. That spread is the largest we have ever seen by a decent margin. Maybe that led to some of the reversal that we saw yesterday, Mike Sikardi, tweet. that it was the biggest reversal in four months or the biggest outperformance of U.S. over international in four months.

I got to be honest. Whenever I see the CTA positioning, though, I feel like it's just telling me what just happened in the market. Yeah, but it was an extreme. So interesting to note. All right. Brian Moynihan was on, the CEO of Bank of America was on San B.C.

And he said, we're in this classic moment where the consumer is saying, I'm getting more pessimistic. But if you actually look at what they're doing day to day, they continue to spend, which means the economy ought to be holding up better than people think. This is why we are very, the sentiment stuff, we're not believing it quite yet, because you got to watch what they do and not what they say. That's what he's saying.

We have more, yeah, Powell addressed that. Which we have, we have that later in the dock. Yeah, we have Powell stuff later in the dock. All right, somebody asked if Trump would care that foreign investors dump stocks, which is a timely question considering that we got this question like maybe a week, a week and a half ago. And I was like, I don't know. I don't know. Maybe he would like it.

I have no idea. But there was an article by Barry Eichen Green in the FT, and he is an author, professor of economics. Let me just read this block. He said there are questions moreover. So the article was, I'm sorry, the article was, can the dollar remain king of currencies? Okay. He says, there are questions moreover about whether foreign holders of U.S. debt securities

will continue to be treated fairly. Scott Besson, Trump's Treasury Secretary, has reportedly mulled the possibility of converting five-and-10-year U.S. Treasury bonds held by foreign investors into 100-year securities bearing low interest rates, whether those investors like it or not. Yeah, I don't think they would like that. Later in the article, all right, labeling. They would sell those immediately. Yeah, labeling the measure a user fee instead of a withholding tax would avoidating

international tax treaties, but it would be, but it would fall out the expectation that domestic and foreign investors are to be treated comparably. All right, here's a kudigra. Quote, this effort to limit foreign purchases of U.S. treasuries as a way of depreciating the dollar, something that Trump and his advisors evidently see as desirable, could quickly get out of hand. So this is another catalyst for international stocks.

Yeah, I don't know that he would view foreigners dumping stocks as a bad thing. He would say, good, they belong with Americans. I mean, I don't know. I have no idea. True. My whole question about the dollar, and I get people worried about these trade agreements and the us not helping our allies, I just don't know what steps in and takes over for the dollar that quickly. The whole thing like this could get out of hand quickly, what's the alternative? That's my only question.

Cardana. There isn't, yeah, there is none. So you mentioned Jerome Powell. He seemed to me pretty, I don't know, he didn't seem to be worried at all about the economy. he was kind of saying you people are worried not me is that fair um so let's get to what he said the the market the market rallied pretty violently after he spoke which has not been the case for a lot of his speeches um that is paul put the bottom in the spoke has a great chart showing s mp 500 intraday um composite for fed days by fed chair powell yall and bernankee greenspan

and Powell's been bad. Not that, not that, the market has been bad during Powell's talk. It's not his fault. He was the fed share during inflation. They literally wanted the, they really wanted the stock market to fall during 2022. They were trying to get it out. Right, right. So Neil Dutta said that Powell did everything he needed to on Wednesday.

The fact that stocks rallied on the FMC decision day absolves Powell of taking any responsibility for the selloff and makes it more challenging for Trump to find the scapegoat. This is not 2018. and Powell tanking the market with this, quote, long way from neutral talk, ball is back in Trump's court. So there were some interesting quotes in the presser. Somebody asked him about the consumer sentiment, particularly the inflation expectations in the University of Michigan survey. So Powell said, Michigan, Bent's home state, the one you're referring to, the longer term thing, you know, we look at it. We don't dismiss data that we don't like.

We force ourselves to look at it, but it is an outlier compared to market-based, compared to other survey-based assessments of longer-run inflation expectations. So we have to keep that in mind. Jerome Powell, anti-survey, just like animal spirits. Now that the transcript, great resource. They pull quotes from CEOs, CFOs, Powell's of the world. this is from Darden Restaurant CEO. He said, as we come out of the third quarter into the fourth quarter and we gave you our expectation for Q4, people, even if they say they're feeling less optimistic, we haven't seen a huge correlation between that and dining out. So changes in consumer sentiment haven't necessarily translated to material changes in consumer spending.

So I think as long as incomes are going up and outpacing inflation, I think they're likely to keep spending. So CEOs and the Fed chair and everyone are basically going, hey, consumer, you're full of shit. I don't believe you. Is that not the theme we're picking up here? And these are the kind of, but these are the kind of quotes that if we did go into a prolonged slowdown, people look back and say, ah, see, they missed it. Right. But their point is, we're not seeing it in the data yet. Right.

And now there's so many economies in our economy. So certainly some areas are slowing down. There's no denying that. One more quote from Powell. He said, for right now, the hard data are pretty solid. we are obviously aware of the soft sentiment data and the high uncertainty, and we're watching that carefully, and we think it's a good time for us to wait for further clarity before we consider adjusting our policy stance.

You know, I've been pretty hard on him. I was pretty hard on him in 2022 for going so hard and cheering against the stock market and saying we want to put people out of business or put people out of jobs. I thought they kind of mishandled that. I think they got lucky that they got a soft landing. But I think it, he's done. an amazing job overall in his term. Amazing. Don't you think for all the stuff that he's had to deal with? No. You don't think so at all? I think mixed. I think some goods and bad. Okay. I'm putting it out

there now. I think he's the last good Fed chair we're going to have for a long time. Why? I think this is going to be a politicized position in the future. And remember, Trump was the one who put him in the position. Powell's a Republican. I think this is going to be a politicized position going forward that is going to do, whatever the president says. That's what people are going to look at this too. I think the independence thing is probably gone and he's going to be the last good one we have. All right. I hope you're wrong. Trump socialed. The Fed would be much better off cutting rates as U.S. tariffs start to transition their way into the economy. Do the right thing. April 2nd is Liberation Day in America. That's what I mean. If he if he doesn't lower rates,

Trump's going to get rid of him. I firmly believe this. There's a very high probability of that happening. If he doesn't do what Trump wants to do, he's going to say, all right, get out of there and I'll get someone else who will. Maybe. All right, I noticed this at the gas station the other day. Gas is under $3, at least where I am. It was $2.93, and I said, hmm, pretty nice. It feels to me like gas prices haven't gone anywhere for a while. It's been right around there for a long time for me. Well, look, okay, look at this, the national average from Y charts. It's, looks like a breakdown may be coming. I know you can't detect analysis on gasoline prices. That was a joke. But we're trending in the right direction, for

sure. Yeah, the spike didn't last for that long from the inflation and war stuff. And egg prices are crashing. What is this, what was, what is the story with crashing egg prices? Was that, was this, like, bird flu stuff? I haven't followed the story. Yes. But I don't, I don't know how it, how it fixed itself so quickly. I talked to two friends this weekend who own chickens, who literally own their own chickens and get their own eggs. And? I think the egg thing is just one of the more rational things we humans hold on to. I think people put way too much emphasis on egg prices.

That's always been my stance and I'm sticking with it. Wait, your friends... Like, I literally know people who own chickens to have their own eggs. Like, can you imagine taking care of a chicken? Because I don't think that's the only reason, but that's part of it. No, they must get some personal satisfaction out of that. I'm sure. Would you get personal satisfaction from owning a chicken?

I wouldn't. you you know we hatched ducks back in the day what do you mean my mom was a huge animal lover but we always had like these weird pets because we were all allergic so we had like we had an iguana we had a tortoise and one summer we hatched chicks that was a disaster we brought them upstate to the cabin and they all got eaten by raccoons it was horrifying It's a classic. But no, I would not. How much does one spend on eggs throughout the year?

That's my whole point. Even with expensive eggs. If a percentage of your budget, it's so small, but we put so much emphasis on it. And why? Because it's a volatile series. If prices weren't so volatile, people wouldn't pay attention as much. Yeah. I don't know.

Enough about eggs. The higher the chicks, the higher the clicks. Eh? Not bad. All right. Let's talk about real estate. This is from Madaglase's. this was pretty good. And we've talked a lot about why don't we build more housing? And I think about

and there's been all this discussion of Derek Thompson and Ezra Klein's book Abundance, and we're going to talk to Derek hopefully coming up about the book. I'm going to pitch in my own stock market abundance plan. I've been thinking about this for a while. Stay tuned. But it got me thinking, why did we build so many houses in the early 2000s? Like what was it? Was it deregulation or was it just the fact that people were going crazy for, housing because the banks weren't charging or the banks had lax credit standards. So you look at this, Madagalacius did this start where he showed mortgages outstanding as a percent of GDP. He did it by credit score. So above 740 and below 740. And you can see there were way more loans given

out in the 99 to 2000 to 5 period. It took off like a rocket ship. And now the below 740 has crashed. Above 740 is down a little, but it's basically like we've decided people with low credit scores don't get mortgages anymore, right? Not nearly as much as they did. It's the lowest it's been on this series going back to 1965. So, is this good or bad? Well, here's the, after the crisis, remember, there was the story of the strawberry picker who made $14,000, $14,000 a year, getting a $750,000 loan in California. That's from Michael Lewis book. And people thought, like, this almost crashed the economy because we gave out way too many loan. So then we go completely the other way and say, no, now we're not going to give loans to any of these, any people

who have bad credit scores. And now they can't buy a house. So what's the better environment? There's obviously it needs to be a middle ground, but this is the kind of things that we do. We go way to the extremes. Let's give everyone alone or let's give no one alone. Right. And they're both stupid, obviously. But one leads to the other. And I just think the great financial crisis totally screwed up the housing market for years and years to come, potentially decades. This is like the story of the economy is like things become two lacks, there's a bust, and then the bust determines policy probably to the detriment for the next 20 years. Yeah, we have too much regulation, and that leads to too much deregulation.

Right. And then we go back and forth, and there's never a good middle ground. I guess that's the point is we're never going to have that. This is interesting from Rick Placios, Jr., at John Burns. He looked at Lanar, which is a home builder, and he looked at their sales incentives on home deliveries as a percentage of revenue. And in the early 2020s, it was very, very low, because they didn't have to incentivize anyone to buy a home because rates were so low. Now it's shot up from, I don't know, one and a half percent to 13 percent. So they're having to offer lots of incentives, meaning we're buying down your mortgage rate or we're giving you some sort of deal or break or that makes sense because like they have to sell their homes, right? They can't just

sit on them. Like a homeowner can wait. Homebuilder cannot just sit there and wait. But my question is if we ever wanted to get to the point where we could, like we said, all right, some politician finally takes it up as an initiative, we're going to build more homes. Would the home builders be able to do it? Would they even want to take part in that without getting some sort of guarantee from the government?

This is, I'm out of my depth. I have no idea. I don't know. What I do know is that these stocks are getting smoked. KB. Home is in a 40% drawdown and Lanar is in a 35% drawdown. It makes sense. Rates staying this high for this long,

these stocks had to get hammered eventually, Actually, I was listening to on the quarter app this morning. This is how they open. This is KB Home. Consumers are continuing to cope with affordability concerns and uncertainties around macroeconomic and geopolitical events. As a result, consumer confidence has declined sequentially each month for the past several months, and home buyers are moving slowly and making their purchase decisions. While longer-term housing market conditions remain favorable, driven by demographics and an under supply of homes,

demand at the start of the spring selling season has been more muted than we have seen over the past few years. As a result of this softer selling environment, we are lowering our revenue guidance for fiscal 2025. 30 mortgage is still 6.8%. I can't believe it's lasted this long. I can't believe it. This is an example of, yeah, the consumers are under pressure. It's not all vibes. I mean, some places are, right? Like Dardy's like they're still going out. They're still spending money at the restaurants. But the home builder economy is clearly, really in a recession, and it has been. I know 2020 is a weird year where home builders were the only game in town

because there was no supply in the market. But there is an ice patch in the home builder market. There was this meme going around during the COVID crisis. It was April. And it was like something like 13 million people had lost their jobs or something. And it was a picture of Jim Kramer with that headline. And behind him, it was like stocks are rushing back to all the time highs. And everyone said, like, this is crazy.

people are millions of people losing their jobs because of the pandemic and the stock market is like this huge disconnect during the next recession that's going to be the housing market and it's going to be so weird to people there's going to be a ton of housing market activity when interest rates fall because of the next recession and there's going to be lines out the door for housing and people are going to go how is this happening during a recession yeah I think it's going to be a thing yeah I agree it's going to be bizarre that's good call all right we got some IPOs up, Ben, E. Toro filed yesterday. Stubhub, we haven't spoken about that in a while. You should short that one out of principle from day one. All right, so Axios reported. Stubhubbub reports a $2.8 million loss on $1.77 billion in revenue for 2024 compared to a $405 million profit on $1.4 billion-ish in revenue in 2023. So these companies, after a certain point, just couldn't wait any longer.

The big difference was sales and marketing, so I guess they could like, you know, that's a level that they could pull. Stubb, I've had more than 40 million tickets sold on its platform last year by more than a million sellers. I feel like I would have guessed way more. 40 million seems like a low number. It does when you consider how many people are at these games and how much you'd assume these tickets are changing hands. Right? I kind of agree. That does seem low to me.

Okay. The big one. Klarna. And there was a lot of memes last week. So Klarna is the giant buy now pay later. company, and this is all the memes. Klarna said in a press release that DoorDash customers will be able to pay and full at checkout, split payments to four equal interest-free installments or defer

to dates that align conveniently with payday schedule. So... Wait a minute. Before we get into the memes, whatever happened to these buy-now pay later things being a 0% interest rate phenomenon, was that the idea, like, once rates are 0% anymore, these companies are going out of business. Everyone was saying it at a time. There's no way these companies can survive higher rates.

And they obviously have. Yeah, we'll talk more about that in a second. First, the memes. All right, person of swag tweeted a picture of... Dave Ramsey. My God. Dave Ramsey. No, it is Dave Ramsey.

It took me a second. Okay. Middle age. Okay. So a picture of Dave Ramsey at his desk with the caption, what do you mean you have 11K in DoorDash debt? Not bad. Pretty good.

Somebody quote tweeted the announcement and with a picture of Jeremy Irons from margin call and said, we are selling pad tie in installments to willing buyers at the current fair market price. That's good. Very good. Lastly, there's one with Christian Ballas, Michael Burry. Quote, they're called Chimmy Changa default swaps. It's pretty good.

All around. Is this more of a publicity thing than anything? Who is this for? It's nothing. It's nothing with nothing. Like, who's really good to use this? All right. So affirm, I looked at the.

their recent call. A firm has 21 million active customers. And their gross merchandise volume grew 35% year over year. Pretty good. From 7.5 billion up to 10 billion. If you look at delinquency, right? To your point, Ben, about this being a zero rate phenomenon. Delinquencies are nowhere. It's under 3%. Really nothing to see here. Do you think people just got used to using these programs? How are they still growing? So they're huge internationally. Like, buy now, pay later is not a new thing. It's just new to us or new-ish. All right, so Mark Rubinstein, who writes a substack called net interest, which is phenomenal.

I pulled out two nuggets that he said. All right. Currently, 99% of consumer loans are paid on time, okay? Although it's the 1% you have to be careful of. Klarna mitigates risk in a number of ways. Average loan duration is 40 days. Wow. 40 days compared with 2.9 years for a 10%.

typical U.S. personal bank loan, which means the company can turn over its portfolio very quickly. Last year, it originated $56 billion worth of loans, of which only $8.5 billion remained on its balance sheet at year end. That's pretty incredible. So they're effectively like a payday lender almost in terms of duration. It's quick. Listen to this. Like, oh, Florida's going to crash the account, not Clarka, buy now, pay later. People are going to take it. The average balance per active Clarnet consumer in 2024 was $87. Okay?

Eighty-seven bucks compared to an average balance per credit card of approximately $6,730 in the U.S. So do you think in the next recession, we keep trying to guess how these new companies are going to do in a recession? Does this stuff fall off a cliff or does it actually increase? Do people use it more in a recession to help them get by?

Yeah, I would think it's... And then the default rate just goes up. Yeah, I would think that's the path. $87. That's hilarious. Yeah. Yeah, you're right. It's tiny.

Come on. But kudos to these companies for continuing to grow. Again, as everyone mocked them saying, this is a zero percentage rate phenomenon. Never going to work. Now, again, I'm a bit over my depth because I don't know exactly how it works. In a recession, credit card companies are like, good, we'll own you money, 29%. Right. Right.

Like, that's the price. A lot of you will pay it. Some of you won't. I don't know exactly how it works in terms of like credit availability with the buy not pay later's, do they just, like, not extend it, right? Is there a way for them to, like, have the data on you as your credit profile and pull back? I'm pretty sure that's how it works, but I'm not 100% positive. Yeah, they might not have to worry about it as much because the balances are so low, right?

And it's just more of a quantity and that quality. I don't know. All right, from the FT, I think young people never stood a chance. And I'll get into the reasons why. So they look at... When you say young, what are we talking about? I think Gen Z-ish. And I think really, I feel for anyone who lived through COVID in high school or college,

I think they got majorly screwed. I can't imagine having those 24, 36 months disrupted at that age, considering, like, the amount of just carefree, when I lived, when I was that age, I was so carefree. I didn't care about anything. There was nothing in my life that mattered. I had no responsibilities. Even with school, I didn't, whatever, it's school.

I had, and so I, going through that. Wait, hold on. I just want to, one thing. I don't think I put this in the dock, but I saw a tweet last week that I completely agreed with, and this is very personal. It's not going to be for everyone. But for me, it was, it rang very true. My childhood, call it, I don't know, before 20, was way more stressful than my

adulthood. And that's because my adulthood has gone well. My childhood was a bit rocky. But I feel like, obviously, there's different levels of stress and responsibility. But being a kid was, I thought it was hard. Okay. I don't know. For me, it was, I just thought it was kind of, I just never worried about anything. I was, I think that's just my personality too. I'm kind of a, I don't know. Like, it was once I had to, like the end of school and then I just figured out finding a job, that's when stress hit me. Like, oh my gosh, maybe I should have been paying more attention in doing stuff. But they show, and I think this is a social media thing too. Confidence in the judicial system is crashing. Trying to find good affordable housing in the city is crashing. Confident. the national government, satisfaction with your life, expectations of your life in five to ten years, experience of stress. So all these other things are crashing and stress is going up.

But wait, if you looked at other age groups, I bet it would be the exact same, more or less. No, that's, but I, but can't this is unique, you think this is unique to young people? I think a lot, I think a lot of it is. And I think, I think, I think you could boil it down to three things. COVID, social media, cost of housing. That's where I think, like, on the one hand, yes, every single generation that's come up has had their problems. But I think that if you just throw that stuff at young people, I think they do have a legitimate gripe of getting out of school after living through COVID. Young people took it on the chin to help old people.

Social media, growing up in that age, you never had a chance to live a normal life or not be completely stressed out and anxious about the world at all times. And then the cost of housing, if I was 25 today and looking at trying to find my own first house, I'd be so mad at the world. Yeah. Yeah, yeah, you're right. I think every generation has something, but I do think young people that these days

have a legitimate gripe. How's that? Even though, if you look at, from the economist, Gen Z is making way more money than any of the other generations before them. And I still think they have a legitimate right. Agreed. Good chart here.

This is from Chris Freeman. He says, the middle class is shrinking because many people are getting too rich to remain middle class. And I got a theory to tell you. test out in you. So it's showing that since the 1970s, people in the highest income, and that's earning $100,000 or more in $22. So this is adjusted for inflation, has gone from 13% in 1967 to almost 38% now. The middle class has gone from 55% to 39%, whereas the low income class has

fallen from 32 to 23. So a lot of people in the middle class have moved up to the upper class. all right do you think people as a whole society would be happier if instead of moving from middle class to upper class we had more people move from lower class to middle class if the middle class would have gotten bigger instead of the upper class yeah no doubt but i think this is also getting back to josh's point a few weeks ago about like everyone is rich now this is also why people who are rich aren't nearly as happy as you would think they should be because there are more people who make more money these days yes um well to that point Daniel Crosby tweeted or maybe put this on LinkedIn I love this so true he said the Joneses aren't that happy we think they are they're curated Instagram life

their new Tesla their enviable vacations at all screen success but here's the truth chasing what they have won't make you happy or it'll make you miserable and then he goes on to a site of study that materialism feeds

on possessiveness non-generosity and envy you work harder buy more but happiness never arrives you just move the goalposts. You can read more about this in his book, The Soul of Wealth. Now, listen, I understand when I say that, people are like, give me a fucking break. Like, boo-hoo.

And I don't think anybody's, I'm not saying that you should have empathy with the Jodzes. I'm just saying people are chasing something that, like, they think will be fulfilling. And it's a message that is really unpopular. Nobody wants to hear this. And I don't want to, like, preach this. I'm just saying it is, it is true. No, so I was, I'm rereading this right now for some reason. The Steve Martin book, Born Standing Up, and he talks about,

how in the late 70s, he was at the top of the world. He was the biggest stand-up comic in the country, part of the world, selling out arenas, and he was miserable. And he talks about it. He's like, listen, I was miserable, and I know I shouldn't have been, but I still was. And he was, like, depressed. He's, like, everything I ever wanted I got, and it still didn't make me happy. And I had to, like, so he walked away and had to find something else to make him happy. That's it. That's, that's why, I think why so many famous people are celebrities like end up offing themselves because they finally get what they think they want it all along and they still feel empty.

It's like, well, if this won't make me happy, what, then literally there's no answer. Yeah. And yeah, life is hard. It's true. Ben, movies are getting their butt cheeks kicked. Let's see. So I subscribe to a substack by Scott Mendelsohn and he said, sans 20 and 21. and Sands Inflation, it's the lowest total for this weekend since 2001, when the Sigourney Weaver, Gene Hackman slash Jennifer Love, Jason, Jennifer Love, Hewitt, Jason Lee, con artist rom-com, Heartbreakers drop. I don't remember that movie. Gene Hackman was in that? Wow.

Anyway, Outdoor Nights debuted the Barry Levinson, Bobby D. movie. Never heard of that. Alton Nights debuted in 2,651 theaters to a whopping $3.2 million. Holy shit. Snow White bombed. Yeah. Not a great spot for movies these days. Prestige TV is the diversification here. Yeah.

Right? It's a great call. All right. I know we're getting long, but we spoke about Craig in this episode. So I just want to give him a shout. Craig Pierce is the dude behind Harriman House, or one of the dudes, behind Harriman House, and they have been... Who published Barry's book?

They have been massively successful thanks to people like Daniel Crosby and, of course, Morgan Housel and Brian Portnoy and Barry and Meb and so many others. And the reason why they won is what I'm about to read you from Craig. Craig said, I am back at my desk in England after 11 days in the U.S. meeting with existing new and prospective authors. On this trip, I visited Washington, D.C., New York, and Miami. I began at D.C. with lunch. He was at future proof.

Yeah. And Barry's a book party. We had dinner with him. I began in D.C. with lunch. Then over the next week and a half, I had 29 more meetings over breakfast, coffee, lunches, and dinners. The reason Harriman sends me on these trips is that we place a high value in our relationships with our authors.

Video call serves a useful purpose, but nothing replicates meeting in person and building relationships. Maybe this is more important than ever with the expansion of AI. One way to be sure you're speaking to a human is to be there in person with them. And Craig is such a great guy, and he just nailed it. And there's, it's not, it's not random that Harriman House is having all the success that they are. Publishing my next book, which I finished the draft of last week. I'm handing it into Craig this week. It should be published next May. But I'm really, it's been a great experience working them so far. I can't wait to go through the whole editing process too. Yeah. All right, Ben. I had a great, I got a quick just midlife crisis thing from people.

I was picking up my daughter, and this is we talked about before, but it was just perfect because I picked up my daughter from soccer and there's two dads talking. And one of the dads goes, hey man, how's it going? And he goes, can't complain. How about you? And the guy goes, living the dream, man. Ooh. I almost had to like get in there with another one of them just to keep it going. But it was... What would you have said? Another day in paradise. All right. Wait, that was it? And then did they just walk away from each other?

I thought they were going to self-combust. All right. Great idea from a podcast listener. Can you guys add a rating system to your movie and show recommendations on the pod? Typically, you and Mike say it's really good or really bad, but a ranking system will help us get a gauge of what you really think. A-A-plus, A-minus, or 1-10. But here's a problem with the rating system.

So I have a- You don't want to get judged. No, no. So I like the one to ten scale because that's what they do in IMDB. I'm not a three or four star guy. It's one to ten. I love this idea. Okay, but the problem is my ratings might not match up with your rating.

So, for example, we both agree that let's say the Godfather part two is like the best movie ever or up there. You know, let's use Goodfellas. How would you rate Goodfellas? Yeah, 10. 10. Okay. See, I wouldn't. I have a different rating system than you.

Okay. So I understand, like, all right, so... Well, this guy says it can also act as a contrarian indicator from Michael's recommendation. No, no, no, no, no, because I have a personal rating system. I don't believe in Tons. I'm a harsh, I'm a harsh critic. So, like, you're the teacher who doesn't give out of A's then. If there's a movie that I really like, for example, Alpha Dog, love that movie.

How would I rate Alpha Dog? 7-1. So it might be confusing to the listener. It's like, wait, what do you mean? You love that movie. How is it a 7-1? I love that movie. I know it's not like an 8-4.

It's really like a 7-1, but I love that. that movie. Here's the thing for me. If I see a movie or a TV show as a seven or above an IMDB, I'm going to give it a try. Yeah. Six to six and a half I'm okay with, especially if it's a comedy. If it's in the five, I'm probably out. All right. So I'll try, I'll try giving your numbers, but just no, I'm a, I'm a tough cookie. All right, so here's my, so severance had a fall off. And I said, here's my tweet from the other day. Because I said severance is in a drawdown from season one to season two, because they had a couple slow episodes. And I sold too early. And I said severance season two was the 2020 COVID stock market. From new all time highs

to a quick 34% crash. It was that bad? When all hope... No, it wasn't that bad. I'm being hyperbolic here. But when all hope is lost, there was a massive rally to end the year with an 18% gain back to an all-time highs.

The last two episodes were amazing. The finale was unbelievable. And I'm seeing some prestige TV pushback saying, like, these shows are just so beautiful and, like, they're not as good as... There's not as much substance. I don't care, man. I'm watching The Pit and Severnson White Lotus

in last week and all had fantastic episodes. The Pitt episode with the shooter. I'm sorry, if I just heard you. Did you reference what Derek said about the gilded age of movies, of TVs? I've seen a lot of people tweeting, like, Severance really isn't that good. It's like what a person with 100 IQ would think a 130 IQ show should be. No way. There's some pushback.

No way. These are great shows. Amazing. And it's one of those things where after watching The Pit and Severance and White Lotus, it's hard for me to get into other TV shows now because they're so good. So I'm trying to new TV shows out. So I started adolescence on Netflix, which, Here's the greatest part of this show.

Four episodes? It's four episodes. Great. Did you watch it at all? Not yet. Okay, here's the hard part, though. It's about a 13-year-old who's charged with killing one of his classmates. And seeing him and the parents go through this, and it's very realistic and very good.

But as a parent, it's actually kind of hard to watch. Okay. But it's very good and very well done. So that's the next one. Did you start Dope Thief? I did. But that's the kind of show where I'm having a hard time. It's really cool premise.

I'm having a hard time getting into it because the other shows are so good. Really? But it's such, like it moves. Here's the thing, though. You need a pallet cleanser. So you have to go from a good TV show to do a movie and then back the TV. I got you. So I needed a movie to have a pallet cleanser.

All right. I love dope thief. It's good. It's cool, cool premise. The lead actor is fucking awesome. He was in a, I only know him from Godzilla versus Con. He plays the podcaster. But I think he's, I think he's been a star in other shows.

He's a guy from Atlanta. Okay, that's right. That's right. All right. Daredevil Born again. Quite good. Okay. I actually watched a little bit of the first season of it. I just, those shows just don't do it for me.

Yeah, I know. You're not a superhero guy. But Daredevil and the Punisher with John Bernthal, really, really, really good. Okay. Really good. What's it on? Disney? It's on Disney. Is it on Netflix or Disney?

Disney. It's really good. I watched the first season of the office. Okay. And? I watched it on the airplane. Only six episodes. All right.

The Olympics episode is fantastic. Was that the first season? Yes, one or two. But the basketball episode is an all-timer. Was it not? The basketball is funny. I think that's one of my favorite episodes of all time. It's a throwback.

It's old, man. I think he does like the was-hap thing. Well, Steve Krell doesn't have Hollywood hair yet even. What year was that? 0-4, 05, probably. His hair was thinning back then. When he's missing shots and he just goes, what is wrong with me today?

It just kills me. Some of the racial insensitivity training. Yes. Stanley's going to start, obviously. It's pretty good. I feel like that's a really good airplane show for me. I can see that. If you doze off, it's like no big deal.

The 20-minute episodes, like, they fly by. You're right. You don't need to pay attention to the plot all that much. Okay. All right, Ben. Good to be back. Yep. I'm very happy.

I'm not leaving the Tri-State area until May, which I feel very good about it. Next week, I'm going on spring break. So next week, I'll be in the office. Two weeks from now, I'll be filming live from Marco Island. Oh, lovely. Beautiful. A annual trip.

Beautiful. All right. Exhibit A for Advice. Exhibit A for Advice.com. Animal Spirits at the compound news.com. Thank you very much for listening. See you next time. Thank you.