Animal Spirits Podcast - Everyone Knows Everything (EP.184)

Episode Date: December 30, 2020

On this week's show we discuss the luck of the draw in the economy this year, our new fantasy trading game, pockets of froth in the markets, Tesla speculators, ARK inflows, why Roths are overrated and much more.   Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain position, and the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. We've done 240 episodes of the show, Ben. We started in November 2017. We've got, it looks like, 955 ratings on Apple Podcasts, which is, it's not great. We've done 240 episodes. If my math is right, that's like somewhere between four and five ratings per episode. And given the size of our audience, it's not great. asking for. What I'm really saying is, listeners, please do us a favor. I know it's a pain in the

ass. I get it. But just do us a favor. If you enjoy the show, hop on to Apple, give us a review, give us some stars, maybe even write a review. It really does go a long way. Yeah. And if you're really good on, we'll read the funniest ones that we see on the show. There's some good ones in there, actually. Some unintentional comedy there. Here's another plug that we're going to give. Two Fridays ago, we did a podcast, How to Start Your Financial Life. And we got a lot of great feedback on that. So thank you to everybody who listened to that one. In the show, we mentioned casually that you and I each have an account on liftoff. We have personal accounts and probably two or three months ago. I open one for my boys. You've got one for your three kids. If you're interested in

checking that out, that's our automated asset management program. That's powered by betterment. The link is liftoffinvest.com. You get a real financial planner. You could speak to one of our employees. So again, that's liftoffinvest.com for people that are interested. Yeah, that's something that we're going to focus on a lot in the year ahead as something of, we think that's a great middle ground for people who aren't in the full wealth management space to have a full-time wealth manager, but who still want to have some financial planning ability and investing. And we think that's a good middle ground, right? So Matt's my financial planner there. And actually, I had a question from last week.

Called them up. Answered my question. It was good. Yeah. All right. One more thing. never done fantasy football before i'm not a nerd sorry like you no no no you are a nerd because you don't do fantasy football amongst other things you're wearing a salmon shirt no offense at least you got the color right anyway it's not because i hate or anything i just never got into it and i used to play real football so i thought it was kind of i was always anti at the beginning by the way i think we mentioned this one time on the podcast i tried to like give you a softball your modesty you just blew it off you played in the silver dome oh yeah in high school. Yeah. Football was like religion in northern Michigan, so it was pretty big up there.

Wait, hold on. You're about to blow past it again. I played the state championship game twice. Twice? Yeah, junior and senior year. I was, uh, not to brag. I was all state. Twice. Running back. Okay. This is more news to me. I never knew that you were all state. I knew that you played. The Silver Dome was where the Lions used to play. That was like a 90,000 person arena. Yeah, it was huge. Yeah, I got to play there twice. Did you run well in the games? I had a touchdown in my junior year. Yeah. I almost returned a punt for a touchdown in my senior year. I won my senior year, lost my junior year. Anyway, so I never played fantasy football.

I just, I never got into it. And I don't want to be the one who gets into it too late and is the patsy at the table. So that's kind of why I've resisted. There's a new trading simulation game. It's kind of like fantasy trading. And it's called wealth-based. And we're going to give it a try. So you run these games for a month.

It's more about the community aspect. I think isn't that part of the fun of fantasy football is that it's the trades back and forth and the emailing between people and the giving each other crap. Isn't that half the fun? I mean, that's more than half the fun. You don't do it for the money. Certainly in the case of real fantasy football, you don't do it for their money. And the same thing with this.

So if you go to wealth-based.com, you could see the featured game. It's called Can You Beat the Compound? And there's a few reasons why we're doing this. A, to Ben's point, it's going to be fun, I hope. I don't know if Target Day funds are on the platform. There actually is a message board on here. And I've already gotten four or five people who've made Target Day jokes to me. So thank you for that.

There you go. So if you have younger people in your life that are interested in learning about the stock market, and people always say a paper portfolio doesn't simulate the real feature. to which I would agree, completely agree. But I think if nothing else, it gets you acclimated to the feeling of buying and selling, to the feeling of watching your stocks, even though it's not the real thing. I think it's probably better off for people to do this before they just jump into Robin Hood, get a proof of options before they have no idea what they're doing. Yeah, it's a way to test out and show you how hard trading can really be.

Exactly. Because we think it would be funny if one of us ended up in last place. I think that'd be hilarious. And it's quite possible. Well, right now we've already got 1,500 people signed up. There's no way. I mean, obviously, whoever wins, you know, that's going to be more luck than anything. I just hope I don't come in the bottom half. That's my hope. All right.

I think it would be funny if one of us did. So, again, go to wealth base.com, and right on the front page, you'll see the picture of Josh Michael and I can play against this and that. It should be kind of fun. And actually, the winner gets a $300 Amazon gift card. From Wealth Base. There's also a winner for second and third place. Yeah.

All right. I want to read you two stories of people from a Wall Street Journal article entitled COVID-upended Americans' finance is just not the way you expected. When the pandemic shut down the economy this spring, Walmart all but closed the department store where Christina Rogers works as an optician. Children's schools closed too. She thought she might have to dip into savings as they hunkered down in St. George, Utah. Instead, her financial situation improved. Though her earnings dropped when she cut back hours to look after her children, company bonuses in a federal stimulus check, put extra money in her pocket. She bought stocks right before the market roared back this spring and

refinance her mortgage that interest rates plummeted. Now, here's the other side of it. They talk about this guy who owns a men's clothing store. Mr. Richard's got a paycheck protection program loan and a state grant, but he had to close his storefront. He will continue through direct sales. His family of five has dug into savings and his retirement account. They got a forbearance on their mortgage and are stretching their groceries. And the takeaway here is that so far Americans have an average managed quite well. They've paid down credit card debt and save more. Household net worth jumped and their credit cards went up. But they say these encouraging statistics are masking and increasing unequal economy. Millions are out of work facing permanent

job losses. More people are going hungry. Hundreds of thousands of small business owners. have clothes shop, there's so much luck involved in all of this. So this one person got basically a bailout and her finances are improved and she's doing better in her life. This other guy, because he owns a small business, is basically more or less screwed. And the small business that he owns, to your point in terms of being lucky, a men's clothing store looks like? I guess my point here is just that there's so much more luck involved here than most people would think, especially this year. This year's like a demarcation line in terms of luck and skill. And so I guess my point is if you're doing really well, you should be grateful for being in a good place because there

obviously a lot of people who aren't and are having a much harder time, whether it's a health situation or their finances or whatever it is. I don't know how a lot of these people come back from this. If they haven't been bailed out by the government, because it's not like all of a sudden this stuff for most of these places comes back right away. It still could take a while. I don't know. I don't think anybody knows. We're going to talk about this. So Dave Portnoy at Barstool Sports has raised like $7 million now for small businesses. On the one hand, that's great. He's done this and he's prizing these small business. And if you watch some of the calls, he's doing these FaceTime calls. Yeah, they're heartwarming. They're amazing. They're very heartwarming.

So I don't want to be that guy that, like, looks at a good thing and says it's a bad situation, but the fact that he has to do that and the government hasn't stepped up and helped these people, that's the other side of this. It feels like it's not right. That he has to be the one stepping up to do this, right? Well, hang on. I thought you were going somewhere else. You're getting to truth or territory here. Somebody tweeted, Dave Portnoy of Barstall Sports, and this got ratioed into the Stone Age, has raised over $6 million for small businesses. He's already done more than Congress? No. Nice try, but no. What did Congress do in March? Was it $2 trillion in relief? Yeah. And what is it right now? We're running at almost $4 trillion. Where I thought you were

going to go out with that was, and all kudos to Barr is important. I think what they're doing is amazing. This takes nothing away from what they're doing. Hear me clearly. I am not dunking. I am all for what they're doing. It's nothing but good. Okay, comma, but. Is he not an amazing marketer. Oh, yeah, of course. Right. The goodwill, and again, deserved, not take anything away, but like the pivot to the trading, to the this, it feels like he just makes one right move after the next. He knows how to catch a wave, for sure. There was a chart in the Wall Street Journal that showed stimulus in 2019, the government response versus what we did in the GFC, and it just dwarfs it. It's incredible to watch. You've been on this for a while now,

but like, how is this not the playbook going forward? I guess maybe going forward if there's is a real recession that's whatever, if it's too much credit buildup or whatever it causes it, I guess they could point to the COVID being a one-off and it's an extraordinary times. It's basically political. I mean, so they're doing the Senate runoff in Georgia. Now, if you have one candidate who says, I want to give you and your family $2,000 checks, the other candidate says, nah, I don't think so. Who do you think you're going to vote for? The CARES Act is probably going to go down as one of the most popular bills in history. Every time this is going to happen in the future where people are going to start, okay, you're going to give $2,000.

I'm going to promise $4,000 over family. It's only political will or maybe runaway inflation. But even then, I don't see how this isn't just immensely popular. I'm sure they've done service of this to voters. What voters would be against these, maybe the people in the top 1% who aren't getting any of it? Yeah. So again, getting back to these numbers things. So obviously, several trillion dollars is a lot bigger than the $6 million at Barstle did.

Somebody emailed us. I heard a senator recently say something to a reporter paraphrasing here. A trillion is what? A thousand millions? Wrong. That's a billion. A trillion is a thousand billion. insane. Nobody can make sense in numbers as large. I deal for the show. Break down these numbers in terms

of time. We feel time unlike we feel money. So I actually tweeted this, I don't know, I guess maybe back in March. I wrote, wow, they're talking about a $6 trillion stimulus package. Oh, man, speaking of, I actually, I forgot to read Lively Summers was against the $2,000 check. Did you read that piece? You have some thoughts? He's kind of a charlatan. How they portrayed him in the Facebook movie sounds like it's pretty accurate. What was this thing? So it's going to overheat the economy? Yes. Let's just move on. He's a not a fan. So I wrote, wow, they're talking about a $6 trillion of stimulus package. A trillion is such a big number that it loses all meaning. Here's some context.

One trillion seconds is 31,709 years. Two, three, four trillion dollars in stimulus. Are we pulling forward returns from the year 36,497? I don't know. I mean, Counterpoint, like this. is the one thing that could potentially increase economic growth. Because the demographics is destiny thing, I think, is most pertinent to the economy. We've gone from like a 4% world to a 2% world. You know what could actually increase that from 2 to 4? Government spending. Bitcoin? Yeah. Did you know that the dollar is down 50% in the last three months? That's the only reason Bitcoin is up. Surprise you didn't know that. Some of the Bitcoin charlatining going on is

wild. I slack this to you over the weekend. Reportively, the Winkle of I own 1% of all outstanding coins. So if that's true, then back in the envelope math shows that their net worth increased by $2 billion over the last 30 days. How have we not figured out who Satoshi is yet, though? Because don't that person or people technically own it all? How has that not come out yet? How has there not been a reporter who's figured it out? I mean, you think that's a Silicon Valley thing, like inside the circles they know? I don't know. Whatever. What if it was a really huge let down who that person was. People go, oh, really, that person? Oh, like, yeah, do you take the mask off and it's that person? Like machine from 8mm, you're very disappointed. Yeah, what if it's

just Naval? All right, there's been talk between Bitcoin and the SPACs and the electric vehicles and you name it. There's been, it feels like a lot of froth in the markets, right? This kind of blew me away. The S&P 500 in the last six weeks, it's up 2%. NASDAQ 100 probably down in that time? No, no, no, no, no. NASDAX's up more. Okay, but still, the stock market is not really breaking away. It's pockets of fraud. There is undoubtedly pockets of exuberance. Which is kind of what we've been saying for six months now. That's what makes this so hard. It's the same thing, right? Yeah, it's a weird thing to watch. So there was a chart from Bank of America global research showing the passive share in equities in AUM. So again, this is an AUM. This is not the entire pie. But we're approaching 50%. And I don't know if you're

see what I see, Ben. I see a flattening. So this is just for funds, though, obviously. Yeah, it's not all stocks. Correct. Do you see that? I mean, obviously what stands out as the mega growth, but it hasn't, it's been flat for what? Two and a half years it looks like. It's flat for index funds you're saying. It continues to fall for active funds. Yeah. So the other side of this is that the inflows into equity passive funds has stalled out. It's flatlined. The money keeps coming out of active funds. So if it's not going into index funds, a lot of that active money that it's retreating is probably just people trading themselves again? Is that something that could continue to hurt active management where people say, why am I going to pay someone else to do it when

I can just do this myself on Robin Hood or wherever I can get free trades? I don't know that the people on Robin Hood slash the DIYers were active fund selectors. Maybe they were. I'm not sure that that's the same cohort. But I guess the big $30 trillion question is, what are these flows doing to the prices of the underlying securities? And there's a new paper, which I have not had a chance to skim to the conclusion yet. But it's from a person named Ralph Supple, who tweeted, we show theoretically and empirically that flows into index funds raise the prices of large stocks of the index disproportionately more than the prices of small stocks. Flows predict a high future return of the small minus large index portfolio. And quote, without reading this,

I guess at face value, that doesn't sound too controversial. However, even though the index side of things are close to 50% of the AUM, they still represent a fraction of the trading. So my thought is that the active buyers and sellers are the ones setting prices. It's not the flows into index funds that are moving prices. Now, that's not what he says. This person says that we've proven it and whom I to discredit that I haven't even read it yet. I am curious to dive into this. It doesn't make sense to me. If you're buying an index fund, you're buying in proportion to the stocks in that market. I don't see how it could possibly push up. I think there's got to be a correlation causation issue here. Even though they use the word empirically, I'm sure

this paper uses the word robust quite often. So it's got to be, I don't know, this doesn't pass a smell test for me. Maybe I'm wrong. So I got a text from a friend of mine, not a financial person. Have you ever heard of Arc? It's hit the big time, huh? So he opened up a managed account with an advisor that I guess put him in like the SMA version of it.

So he's holding the securities individually. We've been speaking about Arc for a while. Bautunus has been all over this. Valchunis actually this morning tweeted, and here's your mind-blowing arcs out of the day. The volume on Christmas Eve, which was half a day in the stock market this year, was $541 million. On Christmas Eve, 2019, it traded $4 million, so just a little 135 times increase, L.O.L. I wrote about this last week where I did a little history of the hottest funds of the day. I went back to use some of your book, Big Mistakes in the 60s.

I looked at the 80s, night, all these. And it was so funny to hear the pushback. And I used ARC as an example of the money flowing in today. I said, I don't know what she's going to do in terms of performing. I talked about this last week, but the people flowing in today, they're going to underperform our own performance. I'm pretty certain of that at some point, because she's going to have a misstep or that style is going to go out of the limelight for a while, and it's just not going to work.

That's just how these things work. And a lot of people, it was two sides. One of them was saying, of course you're right. This thing is going to end in tears. And the other side said, no, no, no, you don't realize. She's going to be able to shift to whatever the market does. And she's so good at this. She can.

Come on. Yes. That's nonsense. here's my big thing. Here's what I was going at, which I think I'm about to disagree with myself. Before I even say it, I already disagree with what I'm about to say. What I was going to say is it's very easy to look for contrarian indicators, and especially in today's day and age when people have access to information, I'm getting it, I feel like every day. I'm getting a phone call from a friend, a relative, whatever. Ask me if I've heard of this stock or this fund manager. Your plumber story was from three months ago, right? No, five. Five months ago? Okay, yeah, exactly. His portfolio is up almost 40%. since then. Miles Udland was onto this concept, and I'm paraphrasing here, but the opposite of nobody knows nothing, which is a quote that everybody who has ever written in a blog post has used at least once, quote that we're both fond of. That comes from William Goldman, the screenwriter, Princess Bride, by the way, one of the best movies ever. The opposite of that is everybody

knows everything. The stories of the Shushine Boy back in the day, I think Joe Kennedy told that story, said something like, when your Shoe Shine Boy is giving stock tips, you know it's probably time to get out. Undoubtedly, that was the case back in the day. when news traveled slower. But today, when news travels so fast, everybody knows everything. And the shoe shine boy, your plumber, your Uber driver, your whatever, they might know about things sooner than you do. Now, in the case of Arc, given that it's 135 times increase, here's where I disagree with myself. It's okay to use these contrarian indicators at this point because it's gotten so massive. It's not early days. But I guess be careful using people as a contrarian indicator.

That's just no way to go through life. And the hardest thing about investing is always timing. be right about this and the timing's wrong and there's no distinction between you being wrong. But I included this in my first book of this email from a reader, the 1987 crash. And this guy wrote me in and said that they found out about the 1987 crash driving home from work on the radio. If that was happening today, we would be doing a minute by minute update of it on Twitter. Like I mean, we did when stocks were down 10%. You would know what's going on every single second of the day. Back then, you had to learn about it either that night or on the news or maybe the next day. So even that was, whatever, 30 years ago. Things are so much different now.

terms of information. And I agree that if you want a contrarian indicator, you can find one anywhere you look these days, no matter your stance. Okay, one more from the Wall Street Journal. And I think this might have to be a weekly highlight the Wall Street Journal, reckless investor of the week. This one, it's investors. But they might have topped their one from before. Where do they find these people? I honestly don't know. It's an ad in the paper where they say, hey, are you taking reckless risks of the retirement? Please let us know. But I mean, again, to these people, this guy turned like $23,000 in options on Tesla into $2 million. and he's buying houses for his family and he's buying everyone a Tesla.

He said he sold his own home and used some of the proceeds to buy Tesla options. I can't believe, like in hindsight, we were way too conservative, Ben. This other woman said she's a 53-year-old. It was life-changing her and her husband. They now have a seven-figure portfolio, two-thirds of which consists of Tesla. And she says she doesn't think she will see another year of gains like 2020, but she has no plans to sell her Tesla stock either and is open to the idea of borrowing more money. Here's her coquire, the coup de grace, using a Michael Battening phrase.

There we go. This is what wealthy people do, she says, borrowing against the money. I want to do one more because this is a great offset of it. So they talk about this guy, Joe Phoenix, who sounds like, I don't know. Sounds like a porn star. Well, is the Netflix show, Joe, uh... Oh, the Tiger King? Sounds like the Tiger King guy.

Hey, Ben, let me ask you a question. So before you get to Joe Phoenix, Zoom is in a 37% drawdown. Do you think it's wise to sell my oldest child and buy options? Is it really down that much? Yeah. I didn't hear those. So this guy, he bet heavily against volatility, and this is in 2018, he had a $1 million position in those volatility. I don't know what he was using, hopefully not XIV, but he was using

margin debt. And it said he basically lost the majority of his money, hundreds of thousands of dollars just gone. He said it was a devastating loss. Got it back into trading the middle of 2019, promised himself he wouldn't take that much risk again. The ending of here is he still trades leverage ETFs though. Just for the love of the game like me? I guess. So maybe the thing is you talked about, like, is Robin Hood good or bad, and I think some of this is these people cannot get out of these bad habits. This guy lost the majority of his portfolio trade, and he's leveraged VIXs, and he's still doing it. Is this a Robin Hood issue? I mean, this is just gambling. I don't know. I'm using

Robin Hood as a collective royal wheat here. Right, right. Anyway. Yeah, like I said, there's many sides here. There's a lot of things going on. People have always been gambling. People always found the way to blow themselves up. When commissions were $8 and $10, they were doing this. it's hard to offer. So Chris Saka tweeted this. He said, do everyone who got into trading stocks this year? I have a little hard truth. You're not actually that good at it. You just caught a wild bull market. Take some money off the table. These people aren't going to listen to that. I mean, I obviously agree with this. But at the same time, I really don't want to come off like they get off my lawn person. You know what I mean? Like, if there's a comeuppance and these stocks blow up, we don't win anything. No. So I'm not rooting for that. I guess what I'm rooting for is for common sense to intervene. And I know it won't. But I just hope that these people are careful. I don't want. them to blow up. Just don't make it any worse in like lose at all. Where we have problems is when, and I'm not accusing the Wall Street Journal of this, but when you see stories like this and it's like trying to convince more people to get in because this is the way. No, this is not the way. Right. You should look at again, this is the luck thing again. Good for these people for doing it

and holding on, but these are lottery ticket bets. Right. Okay. Personal finance. This is from market watch an article by Brett Aaron's. According to IRS data, at the end of 2017, there were more than twice as many traditional IRAs as Roths, and they held about nine times as much money, $8 trillion compared with $841 billion for Roths. So this is a big debate. I feel like we've got this questions all the time. Roth IRA, Roth 401k, or traditional? Do I take the tax break now, or do I take it later? And what they basically came away with, this is from the Boston College researchers, four-fifths of households in retirement will pay an effective tax rate of zero or near zero. Did you write this using a fraction instead of saying 80%? Four-fifths?

Fractions hit different. That's true. That's a huge. So 80% of people in retirement pay an effective tax rate of zero percent or nearly zero. Take the tax break. When I tell people that's especially young people, even if the money would technically be better, you get a better tax break when you're 65 or 70, it's going to mean more to you when you're younger because you're not as well off financially. So taking a tax break now, I think is almost always a better bet than taking it in the future, unless you have a ton of money and are really looking at these single item tax deductions and going through with a tax advisor. I think it's fair to say, know very little about taxes that most people are going to be in a lower, sometimes substantially lower tax bracket of retirement than they are in their working years. I'm not a lawyer.

I'm not an accountant, but that's just common sense. So this is a pretty good myth-busting because the Roth has always seen like a wonderful deal. You have the money, you don't pay any taxes on it. But, yeah, I think especially for young people, the tax break now is going to do much better for you than a tax break later. The top 1% by income in retirement, the average tax rate is 22.7%. So there you go. Visualist Capital had this chart of the value of domestic equities held by the Bank of Japan. So they've been buying equities now for a decade, it sounds like. A little longer. They started buying them in 2010. They now hold $434 billion worth of stocks, the Central Bank of Japan.

Is this a win for dollar cost averaging? If this happened, if the Fed said they were going to start buying stocks, Powell said for the next decade, the Fed is buying stocks. Don't you think the markets here would go crazy? So in Japan, I looked at the numbers. The MSCI Japan ETF over the last, since then, since 2010 is up 80% versus a 260% game for the S&P. They've had lower interest rates and their central bank has been buying equities and they still haven't been able to have like a rip-roaring market. So now show Japan works for multiple reasons. It works for people that use 89 as the peak to show that buying hold doesn't work. Okay, fair enough.

Not really, but okay. So when you say, well, U.S. stocks are doing so well because of Fed intervention and low interest rates, they say, okay, well, now show Japan. But to your point, you spoke with us a few weeks earlier, it's a cultural thing. We are gamblers. We believe in a better tomorrow. We are a nation of stock buyers. I think if the Fed did this, the markets would go crazy. I think there would be a huge, huge, huge update if they announced this.

And people would go take the ball and run with it, where it didn't happen there. I agree. Oh, question for you. Robin told me to get a bottle of wine for Kobe's teachers. So we got a few bottles of wine. She said and spent $15 a bottle. So, okay. So I spent $15 on a bottle.

So I get home, at Robin goes, you cheap skate, these bottles were $10. So I said, no, they weren't. They were $15. She goes, well, I looked them up and they were $10. You have to go back to the store and go get new bottles of wine. So, okay, I went back to the store, I got new bottles. When you get a bottle of wine, I don't know how often it is, do you check the price as a gift? Yeah.

No, I kind of make a judgment based on the label. So if the label looks nice, I assume it's a nice bottle of wine. Oh, interesting. I'm making this up, but the wine tasting thing, I think if you say you can tell the difference between a $200 bottle and a $20 bottle, you're lying. So if somebody gets me a bottle of scotch that I've never heard of, yeah, I'll check the label. But for a bottle of wine? I wouldn't price check no. Unless it was a $2-buck type of thing, then you'd know.

But other than that, no, I wouldn't know. And honestly, I never buy a bottle of wine that's more than $20. I don't think I've ever spent more than $20 a bottle of wine myself. I don't think it's worth it. Okay. Good question. All right, I think there may be some fibbing going on here. So on a Twitter rant recently, because Apple announced they're going to start maybe making cars,

Elon Musk says, during the darkest days of the Model 3 program, I reached out to Tim Cook to discuss the possibility of Apple acquiring Tesla for one-tenth of our current value. He refused to take the meeting. This may have happened, but he's probably lying a little bit here, right? I don't know if we can really trust it. I don't think he's telling the whole truth here. But if that's possible. Where there's Musk, there's fire. Wouldn't that have made sense, though, because they have the iPad screen or whatever in the Tesla? I mean, you wouldn't get all the zealots like you have with Tesla now, so it wouldn't have been the same market growth or whatever that they've had. But I actually think that marriage would have made sense.

And if Apple bought them, maybe they would be worth one-tenth-th-size still. Matthew Ball, Did, does anyone even know that CBS All Access, Big Budget, Stephen King adaptation of the stand came out a week ago? If it had on Netflix, HBO, Disney Plus, everyone would. Great point. I honestly didn't know that there was such a thing as CBS All Access. Is that their streaming platform? I've never heard of it. Exactly.

Okay. That's one of the best things Disney Plus and Netflix have going for them is just... Marketing. But it's word of mouth, too. People talk about it on social media because it's on those platforms. Did you read this article that I sent you from Amazon about what Amazon is doing some of their, let's just say, lessen ethical practices? Yeah, I skimmed it. Here's a quote that I want to pull out.

This is from a company, I think diapers.com. What Amazon did was against the law. They were selling diapers for below cost. But what were we going to do? Sue Amazon for antitrust. It would take years and tens of millions of dollars and we'd be bankrupted by them. So this whole article was about how when Amazon sees third-party sellers on their private sellers on their platform. They basically just copy whatever they're selling, which, okay, whatever. But I went to

the FTC's website. Listen to this. Doing some channel checks, huh? I am. Can prices ever be too low? The short answer is yes, but not very often. Generally, low prices benefit consumers. Consumers are harmed only if below-cost pricing allows a dominant competitor to knock its rivals out of the market and then raise prices to above market levels for a sustainable time. A firm's independent decision to reduce prices to a level below its own costs does not necessarily necessarily injure competition. It doesn't. And in fact, may simply reflect particularly vigorous competition. Okay. I mean, so there it is. Selling stuff below cost is not illegal, not even close. Maybe this is just us, but I don't necessarily buy stuff on Amazon because it's the best price. I'm

sure if I looked really hard, I could find better prices elsewhere. It's convenience. It's convenience. That's the whole thing for it. And maybe they got people, some people, because they help the prices were lower. But I've seen mock-ups of price differences and saying Amazon is definitely not the best place for prices, and I don't care. If it allows me to not have to go out of the house and leave to go get something and I know it's going to be there the next day, the convenience thing is way more important to me than the price. But I can understand why these other companies would be so mad. So now it's an all out of salt against Shopify. Shopify had aggregate sales of $5.1 billion over Black Friday weekend. It's a lot of money. Amazon's third-party sellers for comparison did $4.8 billion.

So they're going after Shopify. I mean, the whole Shopify thing, doesn't that show that people say these are monopolies and no one can ever get any inroads there. That's a huge company now. They're a legitimate competitor, I guess, in some ways to Amazon. I almost feel like, I don't know if this is necessarily if we've seen a paradigm shift or this is just the availability buys. I'm just picking a few winners. But this was a good thesis for owning a stock in the last five years. They have no moat. Anybody could do what they do. Think about like Netflix, for example, all of the competition that they were going to see. HBO is going to get into streaming. Amazon's going to get into streaming. By the obviously both happened, has not slowed Netflix down in one iota.

Zoom, for example, why can't Skype catch up? What do they have that's so special? What else? I guess Shopify is another one. Why can't Amazon just crush them? Wayfair and overstock, why can't Amazon just crush them? Yeah, Best Buy. Yeah, Best Buy.

That question has actually been bullish, and again, I'm probably not showing the whole picture, but... I mean, you could say the same thing with Uber and Lyft, because how hard is it for competitors come in? That argument, it sounds easy, but good luck. That's also, like, really insulting. to the company and assuming that what they've built, that they have no culture, that they have no competitive advantage, no knowledge advantage, no execution advantage. So the Michael Porter-bearst entry thing has been disproven by the last five years,

that we're saying? Everything's been disproven by the last five years. That's pretty true. Yeah. All right. Let's move on to listen to questions. I'm going to read one, Ben, to you. I was wondering if you had just gotten married to your wife and she wasn't knowledgeable

about investing, what would be the best topics or sticking points that you would both would make to your significant others to try and show them why saving and investing early? early and often is so cool and beneficial. Probably a meme. Yeah, beneficial for sure. Cool is not necessarily. I've never been called cool for saving early. We talked about this in a recent weeks where we did a How to Start Your Financial Life podcast. So if you want to listen to that, we'll put a link in it, especially if someone who just doesn't understand it has never gone through the whole compound interest thing in it. The late ball never went off. I guess the way that I try to frame this now, my thinking is it's not necessarily like, oh, cool, we can retire when we're in our 60s because

who in their 20s or 30s wants to hear that? That does nothing. that does not move the needle for anyone, I think it's more about giving yourself options in life and showing that saving early and often can give you not only a margin of safety to do what you want in the future, but maybe do what you want now and take some risks, I don't know, move to a new city, try a new job, start a business, whatever it is. If you're saving and getting your finances in order from young age, that just gives you so many more options in life. How about this? The compound interest stuff, the line graphs, that's not going to hit home. But here's an idea. If you say to your significant other that we're going to be saving $100 a month,

whatever it is, whatever you can afford, and we could spend everything else, maybe that's a good way to do it. Yeah, right, because spending is the other side of the equation that not too many people think about. Again, it potentially opens you up to spend more in the future. But that's not an easy subject to breach, I think, for a lot of people, especially if someone is not just wired that way, because some people just aren't. Some people aren't wired to be good with their finances. somebody wrote this to us. It's not a question, but just more of a FYI. Just a quick little bit to add to your discussion about Nick's article regarding the tax benefits of using a tax-deferred account versus after-tax account over the long term.

One thing you failed to incorporate into that analysis was your kid's post-secondary education. When you fill out the fafts of requirement accounts that are not including your total assets, but after-accounts are. So when your kid goes to apply for financial aid, if all your money is in an after-tax account, the school's not going to give you any financial aid on a reduced amount. But if that's money in a tax-deferred account, IRA of 401, it's exempt. And before the show, you were just telling me that if tuition costs rise by 5% a year, we're going to save $20,000 a month to afford college, is that it? No, no, no, a year, a year. I know. I'm kidding. I'm going to do a post. Somebody asked us, if I want to pay for my child's

entire college education, what am I going to need to save? Right. And again, we've tried to look at this. People try to come up with a retirement number. It's always probably like a million bucks for someone. College tuition one is even harder because is it a public school or private school they're going to. Are they having scholarships? Are you getting any financial aid? There's so many other variables here. And a lot of them, you're just never going to know. In-state, out-of-state. What's your return? Maybe it comes down to setting some boundaries with your children and being like, hey, listen, some people can only afford to pay community college for two years and then a public school. Or I can only do a public in-state school. Or some people are going to say, I'm going to pay for

for whatever you want. So maybe it's about setting boundaries. And then that's a good discussion with your children to say, hey, you can go to public school here and I'm going to pay for it. And you come out with zero student loans. Or you can go to this private school that's three times it's expensive. But you're going to pick up the difference either by having a job. So I think maybe that's a way to frame it where you figure out what you can realistically do, and then it's a way to talk about finances of your children, too. Yep. All right, recommendations. What do you got? I watched a million movies over the past week. Whatever. There's nothing else to do. We didn't do anything with family, really. I'm upstate. I guess the location of where I am doesn't really,

is not material. But yes, I also watched a lot of movies this week. The only TV I've been really watching lately is Your Honor with Brian Cranston on Showtime. Thoughts? Three episodes in. I like it. It's very good and suspenseful. Part of it is I cringe sometimes at watching when things go bad, when there's just like one bad thing after another that happens to a character? Yeah, it's tough. I know that's part of this story and it's good, but it's like, something else bad happens. And I watched The Born Identity because it was on rewatchables.

I think that is the James Bond for my era. What do you think about that? The Born Identity series is James Bond for us. I'm not exactly sure what happened here, but I saw that movie in the theater. When did it come out? Early 2000s. Okay, and I loved it. I haven't seen it since, and I never saw any of the sequels.

I used to read all the Robert Ludlam books back in the day. Of course. Yeah, and it's good. Actually, the books are different than the movies in a lot of ways. But I'm a huge Matt Damon fan, and I loved all those movies, even like the Jeremy Renner one I thought was good. But the first one is by far the best. We watched Soul on Christmas when it came out.

That movie was so freaking good. So good. And the thing is, it's not really even a kid's movie. It's not, yeah. Probably wouldn't have watched it if it wasn't for my kids. And by the way, kids got up early on Christmas Day, super early. My daughter was up like 445, tried to get her to go back to bed. But a bunch of jazz music in it, really good music.

It was great for Zonkaner. out for 20-minute nap as the kids were watching it mid-movie because I knew I was going to watch it it again. But it's this existential movie about the meaning of life. But it was so well done and like Pixar is just amazing to me, how they keep coming up with these creative and original stories. I loved it. And I loved the part about the hedge fund manager as a loss soul. So it's about your soul when you come into a body and come out of a body. But they talk about a hedge fund manager having a law soul. Isn't that the easiest way to go like showing an unhappy finance person though? Because we watched the family man with Nicholas Cage, too. He's the unhappy finance guy.

That's a layup, right? If you show a finance person that's unhappy, That's an easy one. Of course, Rush, diehard. I just love the fact that Hans Gruber, the bad guy, says by the time they figure out what I'm wrong, we'll be sitting on a beach earning 20%. Here's my question for you. Did the Fed do away with heists? Because there's no, you can't steal bearer bonds for 20% anymore. Can we thank the Fed? Okay, one more. Midnight Sky with George Clooney on Netflix came out. How bad? Okay, a lot of people hated this and gave it really bad reviews. I liked it. There you go. I went in with a low expectation. It was actually pretty good. Clooney wasn't even. even that good, but they had an amazing space scene. You know when people are fixing something on a spaceship or a spacecraft? Like in gravity. And you know something bad is going to happen? I had a lot of bad reviews. And afterwards, I was like, maybe the low expectations help. I actually liked it. All right. So I'm going to piggyback on that and say that expectations are everything. I really liked the first Wonder Woman. It was an excellent movie. I'm very glad that I saw people less than thrilled with the new Wonder Woman. So I went into that movie expecting nothing. If I

went to a theater and saw, not knowing anything, I probably would have walked out pretty disappointed, maybe a little angry. There was a lot of problems with the movies. I totally get it. But I guess it's an expectation. Like I said, because I wasn't expecting much, I liked it. And I get that it made no sense, like really, truly, no sense. Matter of fact, Saul was so freaking creative. It was just so beautiful and brilliant. And Wonder Woman, this is what they came up with. Did you watch it? Not yet. But, I mean, don't they have to run out of storylines eventually for these movies. They've done so many superhero movies. The storyline was just really not good and all over the place. And okay, enough bad things. Was it at least entertaining? Yeah, I liked it.

Okay. I did. I'm not going to say it was a good movie. I think you're the first person I've heard say that. I'm not saying it was a good movie. I will not argue, I do not care to debate. It was not a good film, but I liked it. I thought Pedro Pascal as a type two charlatan was fantastic. He was deliberately ripping people off. It was fun. So if you go in with the right mindset, I think you could have a good time. I've never seen It's a Wonderful Life. I assume you've seen it? Yeah. That was like my mom's favorite movie. Okay. So I saw it this week and just beautiful, right? You liked it? Okay. Oh, I loved it. What's not to like? Jimmy Stewart was one of a kind for sure. I mean, I'm sorry, it took 35 years, but I righted that wrong.

I had a girlfriend in high school who made me go to play of It's a Wonderful Life with their parents. That's a bit much. That was a little over the top, yes. Yeah, I would draw the line there. But yeah, no, excellent movie. Okay, lastly, Dr. Sleep, the sequel to The Shining with Ewan McGregor as grown-up Danny. I've actually never seen The Shining before. Okay. Watch it.

Okay. It's a good movie. Very good movie. So Dr. Sleep was like the outsiders, that crappy, in my opinion, that Stephen King, was that HBO this year or was that last year? Yeah, that was this year. It was this year? Okay.

So Stephen King, both Stephen King's, it was good. I don't think this got great reviews. not expecting much. When did it come out? Dr. Sleep? Yeah. 2019. Okay.

I never heard of it. It was a fine movie. Some scares, good story, throwback to the original. It was very good. All right. So speaking to movies, we are going to record some of our favorite recommendations of the year. We've actually had people ask this, like, could you keep a list of them somewhere?

We've just never got around to it. Maybe we need to hire an intern for the show. I got a mental list. Okay. So we're going to do our favorite TV show, his favorite movies. Podcasts. Favorite podcasts? Blog posts.

Some of our favorite blog posts. Some of our favorite blog posts and some of the ones that were the most popular, some of the stuff we've talked about here. So we're going to do that. That's going to be Friday, kind of our year in review, animal spirits year in review, something like that. In conclusion, go to liftoffinvest.com, leave us a review at iTunes, and go to wealthbase.com, and email us, animal spiritspod at gmail.com.