Animal Spirits Podcast - Everything is Outperforming the S&P 500 This Year (EP. 470)

Episode Date: June 24, 2026

On episode 470 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss: why diversification is working again, how AI is creating more winners and losers in the stock market, why the Mag 7 is underperforming, the triple-digit club, why investors are holding more cash, rich people who complain too much, what makes America great, AI is disrupting self help books, the World Cup and more. This episode is sponsored by Betterment Advisor Solutions and YCharts. Learn more at https://www.betterment.com/advisors Visit https://go.ycharts.com/animal-spirits to start a free trial and get 20% off your initial YCharts Professional subscription (new customers only). 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

Every RIA knows the tension. You don't want to turn people away. You don't want to require high minimums, and you want to help clients who are just getting started because that's where the long-term relationships begin. But here's the truth. Those simple accounts, they take a lot of work, account opening, trading, rebalancing,

and before long, your staff and back office are underwater and trying to stay afloat. That's why established RAs are turning to Betterment Advisors Solutions. It's the platform built for segmenting your book and streamlining those smaller and simpler accounts. The onboarding experience is automated and paperless, The portfolio management is streamlined and tax-efficient.

The client experience is consistent and exceptional. Explore what segmentation can do for your firm today. Lower your operational lift, but keep your standard of service high. All with Betterment advisor solutions. Your biggest regret will be not doing it sooner. Learn more at betterment.com slash advisors. Today's show is sponsored by YCharts. Your financial advisor, you already know the hardest part of the job isn't finding data.

It's turning that data into clear, confident, conversations and visuals clients actually understand. Y charts helps advisors research faster, visualize market data clearly, and turn complex portfolio questions and client-ready insights. On average, advisors using Y charts, save around 20 hours a month across proposals, research, and client prep, and now, with built-in AI tools, advisors can quickly surface key takeaways, understand what changed and why and spend less time digging through data. Whether you're comparing portfolios, stress testing strategies, or answering tough client questions in real time, Y charts helps cut through the noise and keep your clients

focused on what matters most. Learn more at Ycharts.com or Click the link in the show notes to start a free trial and get 20% off your initial whitecharts professional subscription. New customers only. 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 Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. Michael, something is happening in the market that I don't think people really thought it was possible. As recently as 12, 18 months ago, everything is outperforming the S&P 500 this year. And I'm going to start with the, this is through the close on Monday. You know what? I got a bone to pick with you. Got it. Your attention. It's not there.

I feel like we need to go to couples counseling. There's a lot. I'm sorry. I apologize. All right. I want it right here. What's going on in your life? You got problems?

Yes. All right. Figure it out. I'm kidding. All right. Everything is outperforming the S&P 500 this year. And so I got Russell 2. This is through the close on Monday.

The numbers don't matter because things are changing today. But the Russell 2000 is outperforming by, it's like doubling the S&P. Small cap value outperforming by a lot. large cap value, reits, midcaps, emerging markets, dividend stocks, all outperforming the S&P 500, some by a very large margin. I don't think anyone thought this was possible before, and I think the only way people thought this could happen is if the S&P 500 had been falling. And it's up through the close on Monday, up close to 10% per year.

And so I think the idea would be, we talked about the dispersion thing last year, last week, remember? that happened in the tech bubble and then you had this other diversification stuff worked because the S&P didn't in the early 2000s. Now it's working when the S&P actually is having a pretty decent year. This is surprising. Yeah, because the Macs 7 are not participating in the rally.

And that is keeping a lid on the S&P 500 returns. It is weird. I don't think that anybody could have predicted that they would take a backseat and the rally would broaden out. It makes a lot of sense why this is happening. I saw a chart this morning.

It's not even really keeping a lid on it, though. It's up 10% 6-month through the year. True, true, true. I saw a chart this morning that the average P.E. for Microsoft, Amazon, Google, and one other name are at their lowest level in the last five years. Microsoft is trading like death.

It looks terrible. Not surprising. It is the largest software stock in the entire world. So AI is disrupting software. Okay, it makes sense. Obviously, Microsoft has many things. It's not just a software stock, but that's what it's trading like.

meta is trading terribly as well. Well, look at this next chart I have with all the drawdowns. Microsoft is down 33%. Meta's down almost 30. Oracle is almost 50% off the highs. Netflix is still crashing again. Are you still holding there? Still on 45%.

I own Netflix. I'm down 30%. I don't think I've, I can't say ever. In the last 10 years, I've never been down 30% on a stock. It's just not my style. I cut my losers fast. Netflix is, my smallest position, and I'm very comfortable owning it here. In fact, I hope it goes a lot lower

because I would be very comfortable buying a decent amount. Yeah, not to get on Netflix specifically, but the transition from a growth stock to a value stock is very messy. And I think that's what's happening right now with Netflix. All right, whatever. We want to talk about that. So we also have Google down a quick 13%, Amazon down 15%, Tesla's down 17%. Like this is, to me, SpaceX is down 25% from the from the highs stocks been trading for a week, whatever. I think this is good news.

The market is doing okay and all these companies that people have been relying on forever are getting dinged. I think this is great news for the market. It's not great news of these are your biggest stock. So I don't want to be insensitive. It sucks when people,

I don't like when anybody's losing money. But if you zoom out to the macro level, assuming that these hyperscalilers don't completely fall apart because, right, like, yeah, it's good now. But it's not Microsoft's down 60. wouldn't be so great for the overall overall market. I think I think the story makes sense. You're seeing the erosion of the halo that these stocks had. And I can't believe I just use Josh's word to describe that. But like the invincibility cape that these stocks had with all of their

gushing free cash flow. And finally, the market is saying, hey, wait a minute, like you're spending pretty much all of your free cash flow on CapEx. Asset light was good. Asset heavy, not so good. What if these companies disrupted them? They literally disrupted themselves by doing this. Demodron was on Kaiwu's podcast last week, the intangible economy. And he was talking about the fact that these companies, this is a huge, huge risk that they're taking. And he kind of said, listen, I don't know that they really understand the risk they took by doing this. By getting into the more physical world by building the data centers and becoming less asset light.

Maybe their margins go down by a lot. And that the fact that they're not as intangible as they once were. This is a huge risk. And is it possible that these companies disrupted themselves and all these other parts of the economy in the world are the beneficiaries of that? Yeah, I don't think, I don't think that they don't, that they didn't think about the downside of it. Like, I think that they're probably spending a lot of time thinking about that. But they all said the same thing. This is, we view, we view not participating as an existential threat.

We have no choice. So, um, except for Apple, basically. Yeah, true. But as Mark Zuckerberg, like, oh, no, my. stocks in a 30% drawdown and I made a giant mistake. I really don't think so. No, because he's a, he's a psychopath. He doesn't like think about this stuff. It doesn't, doesn't impact him at all, right? I mean, well, that's the benefit of having a founder, CEO with biggest shareholder. He has the ability to look past rightly or wrongly, you know, well, time will tell. But a 30% drawdown,

whatever, he's down to his last $300 billion. So I think a couple weeks ago, we showed the exhibit a chart about the S&P 500 versus the 493 versus the Mag 7. And this lead by the 493 is widening over both the S&P and the Mag 7. This is honestly, this is very surprising. It is. Yeah. We don't have a chart showing the difference between the two. Like, over a three-month period, I'm going to guess that the 493 has not outperformed

the Mag 7 by this margin in a long, long time. And I'm here for it. I think it's wonderful. So we also got the net, we're recording this. 9-10 a.m. Tuesday before the market open, which usually when we record, the NASDAQ 100 is down 3% opening pre-market. The South Korean stocks got wallop last night. They're down 10% or something. This is the second time in what three weeks this has happened, where we've had this, like, really big flush. South Korea falls a lot. The NASDAQ falls. Again, I think this is good

news that they're having, they're having this pullback, these two steps forward, one step back, and people keep getting slapped on the wrist in these stocks to go, hey, listen, if you want these high flyers, these stocks that have gone absolutely bananas, you're going to have to deal with some give and take as pullbacks. This is the market,

the market like the biting the hand that feeds you, essentially. I continue to think this is good news until it isn't, and this happens more often than not. Yeah, I've more on this later on the dock, but let's keep it moving. Okay. Morningstar had this piece last week

about the number of stocks that are in the triple digit club, and they looked at stocks this year that are up 100% or more. Sorry, in the past 12 months. So they looked at the Morning Star Large Mid-Market Index. So they said in the past year, 42 stocks have more than doubled. That's more than twice the 10-year average. In the past six months alone, 12 stocks are up 100% each.

Obviously, a lot of them are dealing with AI infrastructure boom. And so they chart these out. And it's the stocks that we've been talking about, Sandusk and Micron and Western Digital and Dell and Intel and all these companies. But then this is kind of cool. They looked at like how often the rolling 12-month stocks up at least 100%. And the biggest one here is the rebound from COVID when there was a huge crash. Then they came back.

This is crazy. S.K. Heinex, this is before the little fall yesterday, was up over 300% on the year. Not the last 12 months, just this year, six months into the year. So the fact that you have these 10% flushes or these 3% flushes to NASDAQ 100, that should be expected when you have gains this big. this is the thing that you talk about, like the profit taking happens faster. It should happen faster when you have gains this big. But obviously, it's funny because we keep, I think we've been saying all decade,

this kind of thing isn't normal, but we just keep seeing stuff that's abnormal becoming normal. These like these huge moves in short periods of time. What if that is just the new normal? That's such a good point. There is no such thing as normal. Everything is, every market environment is a little bit different. I mean, what's normal? Like, when you say this isn't normal,

where do people's heads go to a normal time in the market? 2015? I mean, what are they? But seriously? This century, there hasn't been one like normal environment, if you want to call it that. So the Wall Street Journal had this chart the other day, showing change from the start of the war through last Friday.

It's gold oil in the semiconductor index. And if you would have said, hey, we're going to go to war in the Middle East. Oil prices are going to spike. 60% on the year or something, what do you want to own? And it's not gold, because gold is down

since the start of the war. Gold's down 20% since the start of the war, which is kind of crazy. Oil has essentially round-tripped almost. It's now only up 10% from the start of the war,

and semiconductors are up 70%. So you'd say, how do you hedge a war in the Middle East by semiconductors? Duh. But I guess the point here is that there really are no true perfect hedges

for every situation. Can I be you for a second? The best hedge is a diversified portfolio. Of semiconductors oil and gold, I guess. Yeah. Goldman Sachs, I think Mab Faber had this one in his idea farm email. And if people don't have that, it's pretty good. He pulls together all the best long-form research pieces and sends him out once a week,

MEP and his team. And Goldman Sachs had this, had some really interesting charts on valuation that thought were we're talking about. So they compare the CAPE ratio to the ROE on stocks, which ROE is always Buffett's favorite indicator, right? And this is something that you and I, I feel like we were really ahead of the game on this. I don't know, 10 years ago saying that valuations should be higher. And this is just showing that valuations have followed ROE higher, which makes sense. I think what we did a good job of was putting a little bit of context around the PE. Because I think a lot of the context, it was just the number.

with no look through to the fundamentals of what was actually driving the number. The funny thing is, so if you look at this next one, it's the trailing four-quarter ROE, and it's just shot higher this decade especially. And in my book, I wrote a piece about Buffett talked about how inflation impacts stock

because the ROE is relatively stable over time. He said it's like 12 to 14%. That's like the ROE. And he wrote this in the 70s. And he's like, the ROE really doesn't change over time. Which is kind of funny to think about now, actually technology did change it. It's in this, it's in like this new level.

And then finally, this last one is just kind of hilarious. Wait, hold on, hold on. I don't want to leave this. This is so important. The return on equity was one of the most cyclical data series in all of finance. It was down and up, then up and down, and back and forth for 45 years until these companies that we've discussed and nauseam rewrote. the physics laws of business of what we thought was possible,

what an incremental dollar invested can generate. And by the way, that is changing right now. It's going the other direction for the hyperscalers. And, you know, so what's happening with their stock price makes sense, and it's really, really interesting. Yeah, you're right. This is like a new level. But look at the next one.

This is kind of hilarious. It shows a semiconductor trailing 12-month net profit margin. in this it was a, I don't know, a low of 25% as recently as 2024. It's projected to be 49% in 2027. We spoke to Dr.

Ancourt Crawford for a talk of book episode that came out on Monday. And she's one of the best voices in my opinion on what's happening in the semi-space across all areas of the supply chain.

And it's really easy to look at the price and say bubble. And I'm guilty of that too sometimes where I say, oh boy, don't like this. And you can have that opinion, but you really need to have an understanding, a little bit of an understanding of what is causing the margins and the earnings to skyrocket and, of course, the stock's following suit. Well, the question is, what is this incentivized if other competitors see a 49% net profit

margin? What does that do? I don't understand this industry enough, obviously. Nothing. my limited understanding is Taiwan Semi is not the type of company that you could just spin up. This is the most high-tech. You know, like, you know the scene?

You probably didn't see the New Jurassic World, where they walk into the... I did see it. It was awful. Okay. It was terrible. In the opening scene where they walk into the T-Rex, what do they call that thing?

The Domingus, the Domino's, I don't know, whatever it was, the fake, the alien T-Rex, where they walk in with those hazmat suits. and everything is like a Snickers wrapper got in there and destroyed the integrity of the unit, that's what these fabs are like, where they manufacture these semiconductors. The amount of technology in these places

is to an extreme level that there's a reason why there's only one Taiwan semi. You can't just bring supply to the market. And that is why there is a bottleneck at almost every area of the chain. There is just a shortage, and I'm not saying anything that's not very obvious

and potentially in the price of these stocks, but you can't just bring supply to the market. You can't just snap your fingers and fix the issue. It is interesting in what feels like we live in a world of abundance now when it comes to technology, that there's still our bottlenecks. Great point. You'd think that it wouldn't exist anymore.

It's kind of like, how is this street of Hormuz still a bottleneck for energy? But it is. There's still these points, that make things difficult to expand as much as we want to. Ben, one of my favorite categories in our doc is the investor behavior section. And I know we're on this beat a lot, but I'm going to keep doing it because I think it's important. There's so many different sources of investor behavior and different pieces of data that you

could point to and say, see, XYZ. Yeah, back to your shoe shine thing from last week. Whatever narrative you want to spend about the market, you could find it. in various sources of investor behavior data. So, for example, according to Citadel securities, Frank Shapiro tweeted this, the day of SpaceX's blockbuster IPO marked the largest single day of net retail stock buying ever recorded by the firm,

which handles roughly 35% of U.S. retail trading volume. And in fact, nine of the 10 largest trading days ever observed on our platform have occurred in just the last month, including seven during the first half of June alone. Okay. So factually, factually, there is a mania around the SpaceX IPO. Retail traders are having a moment of euphoria.

They are trading a lot, a lot, a lot. Now, is it all bullish trades? I don't know. I don't know how much money went into the 2X SpaceX leveraged ETF, the inverse, which by the way was down 43% to two days, I think. So bullish bears, they're trading their asses off. And then I'm on the daily chart book this morning and I see equity positioning.

Now, this says consolidated equity positioning. It's a weighted average of Z scores for positioning indicators. And they're looking at this is from Deutsche Bank asset allocation. Okay. So I think they have like a pretty good view on whatever pool of investors they're looking at. And if you're looking at this, you see nothing. equity positioning sits in the 42nd percentile, still far from crowded and leaving plenty from further upside.

So you see this, you go, huh, how do you square this with what I just said? And then I see another one. Discretionary, so again, from Deutsche Bank, they break down discretionary versus systematic stock equity positioning. And again, nothing there. Discretioning investor is 41st percentile. Systematic is 48 percentile exposure to equity. in terms of like how allocated you are.

And you say, you scratch your head. You're like, I don't, I don't get this. Make it make sense. All right. Well, there's another chart from Bloomberg that shows speculators are getting shorter inequities. This shows the net positioning of the S&P, the NASCAR, the NASDAQ, the down midcap futures as a percent of open interest.

And it's getting more negative. Huh? They're getting more short in the market. And then you say, okay, okay. Well, this makes sense. We're looking at the prime book. so hedge fund exposure, gross and net to semiconductors. And it is parabolic.

It has gone from 8% at the beginning of the year to 22% today. So hedge funds are all in on semiconductors. And then you see retail piling to semi-stocks flows for all U.S. semi-ethefs listed on Bloomberg. Completely, completely insane. All right. So, like, there's just so many different sources in here. So, yeah, everybody, everybody is overweight semis.

There is a, the DRAM ETF as it went for, we said 10 billion last week, now 20 billion. Okay. So clearly, clearly, clearly, everyone in their mother is all in on semis. Rightly or wrongly, is it going to fall 30%, 40%, is it going to double from here? Who knows? But there's a lot of, there is a lot of optimism, perhaps beyond optimism, with retail behavior and professional behavior in semiconductor stocks. But everything else, at least according to the charts,

that I just shared, and I'm sure there's others. Well, Kevin Gordon had on from Vandotrack. He said retail single stock net buying is falling to the lowest since COVID. Make it make sense. I don't know if they just moved all to the, the ETFs or what? So anyway, I guess my point is I love these charts as much of the next guy, but I think they're really noisy. And I think you should just consider the source,

not in terms of like the underlying data, but who is showing you the data and what narrative are they trying to spin because it's very easy to make any case based on any of these charts. Yeah, what was the Munger quote from a few years ago if you're not confused, you're not paying attention, something like that? How about this one?

I've got a theory in it. So Citadel had this really good report that they put up monthly. They said, household cash as a percentage of total financial assets is now 8%. That's higher that it's been at any time since 1990. Okay? What's your theory for why household cash

as a percentage of total assets is so much higher than it's been in the last, since 1990s, 20 years ago, right? Yeah, okay. In my mind, 1990 is always 20 years ago. No, 1990. That was 13 years ago. Okay, the only thing that I could think of

without having thought about this prior to the last 10 seconds is people are putting money aside to save for a house? I didn't think of that one. I'm going to say no. Here's my thought. Okay.

I have two theories. I put this out on Twitter and I ask because this is another one of those, and you go, how could you have a speculative mania when people have more cash than ever? And I think there's two things going on here. One is just we lived through a period that was so long with like financial repression and no rates.

And now finally you can get three to four percent in cash. People are okay with that. I think this is just baby boomers decided. And people trading down from fixed income and going, I got nailed in bonds when interest rates rose. I'm going to keep more money in cash, and I'm retiring, so I need some money in cash. So I think this is mostly a baby boomer phenomenon.

Yeah. That'd be my theory. I subscribe to that theory. That's good. That's better than mine. It's a surprise. Another surprising thing, though, right? You go, wait, this is a speculative mania and people are holding more cash than ever.

This is the episode of surprises, I guess. By the way, SpaceX, I believe, debuted at 150 when it first opened. Is that correct? Ish? I think it opened, yeah, something like that. Yep. It's back down there at premarket today. So it round-tripped.

So who is the bag holder in that scenario then? No, because the index funds, it didn't really. It's still getting there, right? So who cons is the bag holder now? I guess people that bought at the top and are still holding on. I don't know. All right.

Anyway, that was kind of fun. But the amount of trading that happened in SpaceX? Yeah, the volume was crazy. There's just so much volume. So, I mean, is anybody holding the bag? I don't know. Everybody's training their ass off. Some people made money.

Some people lost money. Okay. Did you put this survey in here? 8% of investors believe there isn't a bubble in air-related stocks? Oh, okay. This is interesting. So sort of getting back to what we spoke with Dr. Crawford about and something that I take, and I want to be careful saying this, a little bit of worse, where there's still early,

does, early might be the wrong word here. I think what I'm trying to say, Ben, is I love that there is still so much doubt. Now, just because, just because everybody thinks that this is a bubble, that doesn't mean it's not, okay. So I'm going to be very careful. It doesn't mean just because everybody thinks that doesn't mean everybody's wrong. But it does mean that there is a lot of doubt. There are still a lot of people that are non-believers that these things aren't going to come crashing down. So the AAI-I sentiment survey, they asked, is there a bubble in air related stocks? And no, there isn't a bubble only 8%. Now, to be fair, I don't think that I would say that because I think that you could credibly make the case that

there is a bubble in some areas of the AI industrial complex. This is also the way that this survey is worded. It says 51% of people said some, but not all AI-related stocks are too expensively valued. Yeah, that's probably what I would. That's where I would fall. Anyway, whatever. The fact that there has been people who have been calling for a bubble for 12 years in a row,

just because those people continue to call a bubble, doesn't mean there's not going to be a bubble at some point, right? So, correct. use that as a like disqualify. Like, hey, this person's still calling a bubble. That means it can't be. Correct. You can't use that as a to qualify.

I've somebody worded this better than I'm going to be. But they said usually, and again, not disqualifying what we just spoke about, usually tops happen because everybody's looking to buy. Right? Like there is when there is nobody left to buy, there will be a top. Yeah. But there's still so many people that are just saying like, this can't continue.

But to your point about there being so many different investors, there is no like everyone in the boat anymore. It's not going to happen. It's too many diverse set of investors today. There is no everyone. All right, let's talk about spending. Mike Sikari tweeted this in Bank of America. Consumer spending momentum is remarkably robust

with total card spending rising 5.1% year over year in May, the strongest growth in nearly four years. Now, of course, there are some reasons for this, gasoline being one of them. but strongest growth in nearly four years. So whatever you want to say, people are spending. We've talked about this before. I need someone to explain this to me.

So the average credit card rate is somewhere in the range of 20 to 25 percent, depending on who you ask, right? It's really, really high. They pay out the rewards. I know you spend the 2 to 3 percent at the vendors. But I keep getting these, I think I sent you a picture of one. I keep getting these things for, hey, zero percent rate for 21 months or something. How do we live in a world where the credit cards can charge 25 percent,

but also zero percent for 21 months. Because the 25 pay for the zero. That is insane to me that that. So we did like a zero percent financing for our flooring we did last year. Of course I'm going to take it. They gave me 0% for 18 months. When that runs up, I found a 0% for 21. I'm going to roll some of it over to that and just keep having the 0% go.

Like why, and solely paid off? Why wouldn't I do that? I just can't believe that that's actually an option, that they give you 0%. This is like the reverse Robinhood, stealing from the poor to give to the rich. It kind of is. And obviously, when you apply, they don't give you a huge limit.

And also your limit, I'm sure, is determined by your credit score. Not to brag, got a good credit score, of course. But I can't believe that these things exist in today's day and age. That's all I'm saying. Now, you could say that, like, and I'm sensitive to this argument,

that these rates are punitive, there is a reason why subprime borrowers have to be charged a high rate. It's because they're risky to loan money to. I know that sounds cold, but like, come on. It's completely unsecured debt. Right. There's no recourse. Right. All right. More decent economic news from bespoke retail sales. Breath in this month's report was remarkably strong with just two sectors showing negative growth. So it's not just gasoline. Following these results, our diffusion index, which measures the six-month average net number of

sectors expanding ticked up to the high end of its recent range. Good news. All right. Wait. The diffusion thing got me. I don't know. That's just a lot of terminology. Don't worry about it. Don't worry about it.

It's very technical. If you look at that chart of retail sales that just had the one, it sprung up from COVID. And obviously part of that is inflation. It's not all everything. But that was another thing that is on a completely new level. Like the trend was broken forever. And we just spend more. And everyone has just moved on.

It didn't come back. All right. Hold on. The market is open. Let's see. Envita is down 3.4%. Let's take a look at the... The NASDA is down 2.5%.

Yeah, probably finishes green by the end of the day. To the point that we were making earlier about everyone in semis. I mean, everyone in semis. Yeah, there's going to be bigger air pockets. So Micron is down 11%. Santhis is down 11%. I think Micron reports after the bail.

Guess what? There should be. Micron can and probably, probably, whether I would know. Micron could fall 30%. Matter of fact, I know I said this every episode. It just did in March. Micro could fall 30% in a week and still being an incredibly strong upturned. Like the shakeouts are probably going to be just as fast as the rise.

So, no pain, no gain, as I said. Yeah, exactly. All right, cool one from Strip Upgonautics here. They look at new business applications. I think this is one of the things I think that. Wait, why do you skip that? Rich people complain of the worst. I think it's a good topic.

I want to do that? Okay. Yeah, I am, these are the absolute worst. Yes, so this is from the Wall Street Journal. Okay. America's economic anxiety is rising up the income ladder. And they ask people a set of questions, do you think America's political and economic systems are stacked against people like me? And the upper middle class people in 2017 said 29% said yes. In 2026, 65% of people said yes.

And also, do you lack confidence that their life will be better for your children than it is for theirs? In 2019, it was 64% and said yes. 2026%, 86%. So they lacked confidence that their children would have a better life than theirs. Stacked against is, give me a fucking break. Yes. Now, I know that it's hard to live in,

it's hard to live in expensive areas. Long Island being one of them. I am sympathetic to that. But stacked against you, come on. There are people who actually have, the system is stacked against certain people. Yes, we are not one of them. You're in the upper middle class.

yes, just that rich people, this is such a big pet peeve of mine, rich people who pretend or say their middle class or complain about their lives when there's other people who have actual complaints that are worth telling. I hate it. All right. This is what makes America great. New business applications. This is something we never could have possibly foreseen. Remember all the conversations we had? Like, what is COVID going to do? Like, what is the thing that it's going to change forever? And we had all the, and there was a lot of wrong predictions. There was some right. This is something no one ever would have predicted, that you see this huge increase in business applications. There's a reason for it back

then. So Ernie Tedeski and team at Stripe wrote about this. They said the PPP program, there was a small business loan program that required an EIN, a little else for eligibility. So you got like these loans and it was like, hey, guess what? If we make it easier for people to start businesses, they're going to start businesses. And you saw this huge rise in business formation. But then it stuck. And now you're seeing another acceleration. And the team at Stripe is saying, there is no program now that's causing this. What's causing it? AI. And so they break it down by saying it's easier for people to start businesses now because of AI. And I think this is actually a very good, this is a great thing that's happening. And look at the numbers from 2005 to 2018 or so.

These numbers were stuck. They didn't move much at all. And now we've essentially seen more than a doubling of business applications of people starting their own businesses because it's easier. Yeah. There is a lot to celebrate about what's happening in the country. It's very, very easy to lose sight of that, given all of the negativity. And a lot of the negativity is genuine. I'm not trying to sweep the negativity under the rug. There's a lot of shitty, terrible things happening to a lot of people.

But there's so much good stuff happening too. Just think about how delusional you have to be to start your own business, though. It's really, really hard. It's pretty psychotic. But so many people do it in this country because, like, there's this idea that, yes, These surveys talk about things getting worse, but you don't start a business if you don't think that it's going to work or that you're not somehow optimistic.

I think that's a great thing. Let's pivot to the dark. It's enough positivity for one day, right? Okay. So Tim Ferriss wrote a post describing that his books sales are crashing. Now, Tim Ferriss is probably the modern day king of the self-help, like the, the, wait, this is not dark. I think I'm going to go on record and say,

is a good thing. Yeah, no, I'm just saying, like, no, I totally agree. I'm just saying the transition to AI, dumerism. I think this is a great thing. But he's all like the, the self-help hacker book,

right? Like the four-hour work week, the four-up body, the four-th, this, the-th, he basically said that... There's still a stuff that he talked about

in the four-hour body that I do today still. Like, there's some workout stuff in there that he laid out that it's a really big book and most of it was useless to me, but there was some stuff that I still used to this day

from his book, from that four-hour body book. So his case, catalog will sell roughly 80% fewer print copies in 2020. And of course, the self-help books are being displaced by Claude because you could ask it anything. And I think that's great. But Ben, what's your take on this? No, I, that, the self-help genre, I think it's useless to 95% of people. I think you read one of these self-help books and you go, yes, I'm going to change my life. And then you don't do anything. It gives you this initial pop. And so I have, I have very mixed

thoughts on this. Are we sure, though, that this is all AI related? Is this too much of a causation thing? Or is this, what if this is just, what if this is just a Tim Ferriss thing? I don't, I don't, I... No, let's just say it's 80% AI. Maybe Tim Ferriss has run its course. His book's been out for a long, long time.

Yeah, that's the thing. This is pretty... This is pretty... I wouldn't have thought this, but it does make sense. I think self-help is sort of like, how some people feel about religion. Some people, like, say, religion is is bad for reasons X, Y, and Z.

And it's nonsense. Okay, fine, you might feel that way. But there are genuinely people that get a lot out of it. Anyway, it gives people hope. Right. Okay. So I think self-help is the same. That's true.

But when you read your first self-help book, you are sort of energized and charged and like, I'm going to change the world or change myself, at least. Most of the time it doesn't happen. I think the number I read it up. People are mad at the self-help creators. It's not mad, but it's like, oh, that person is a Charlotte and right? They're getting rich by telling people a lot of the way to do.

I think that's generally the complaint. There shouldn't need to be more self-help books, but it's true that sometimes the way the message is crap that just needs to be changed. And sometimes people find comfort in that stuff. So I don't want to be too big of a hater. No, no, no. Listen, there was someone who said, like,

hey, Ben, there's nothing new in your new book. And I thought like, well, yeah, my, someone told me a long time ago. Someone told me a long time ago, hey, listen, no one goes to church on Sunday expecting to hear an 11th commandment. Sometimes you just need... Boom.

Love it. Sometimes you just need to be reinforced. Yes. And that's why self-help books will always... But I got to say, this is not one of those outcomes I would have predicted. It's pretty interesting that this is happening. Yeah. So add this to the mile long...

But don't you think... Sorry. One more thing. Don't you think podcasts are also part of it too? I think podcasts have replaced books for... People always say like, oh my gosh, no one's reading anymore. I think podcasts have replaced book for a wide, for a big... segment of the population.

Of course. Why would I want to read Tim Ferriss's books when I could listen to his podcast? I'm sure that's part of it too. Yeah, it's easier. All right, so add this to the mile long list of things that we might look back on and say, what in the world? How was this not more clear that X was going to happen? Here's a tweet from Cherish.

They are putting data centers in the ocean now. Pantalasa, a startup from Portland, just raised $140 million. dollars. They build floating platforms that sit out at sea and run AI. No power grenade. The ocean's waves make all the electricity. The seawater keeps the chips cool. Big floating balls bob up and down the waves. That motion makes power. The power runs the AI chips inside. Back by Tito-Teele, company now with almost a billion dollars. All right, why not? I mean, what do I know? Sure. It looks like a scene. The picture looks like a scene from a Star Wars movie. Sure, why not? It is funny because there's obviously roadblocks to data centers and now that that's a lot of

municipalities and cities are saying, no, we don't want them here. Obviously, it's so important for these hyperscalers to get this stuff out, but they're going to put them wherever they can. They keep talking about putting them in space and in the ocean, and it is kind of insane. So I guess part of the push and pull that we keep talking about is we're looking at the prices of semiconductors. We're looking at the valuation of SpaceX.

And it feels how it feels. Let's be honest. We all feel in a certain way, right? Like this feels like 99. What time is it? Who knows? And I'm reminding myself of what Gavin Baker said, where he's like, look, think about all the the shortage of compute that we keep talking about.

And just think about the fact that literally less than 3% of the world, maybe even less than that, is actually even using AI. And so like, all right, well, that's one end of the spectrum versus the other. And how do you think about like investing through those two prisms? And it's hard. I do think it's helpful to read both finance people and tech people, now to keep yourself balanced. I feel like if you just focus on one, not the other, you're not seeing both sides of this and you're not having a more balanced view.

Right? Because again, we've talked about the finance people tend to be lean more bearish on this stuff, the tech people more bullish. This is a, you know, generalization. But I think it's important to read both accounts. All right. I'm going to keep a positive here. I'll give a Talking Wealth plug again. So Talking Wealth is our YouTube channel and podcast for financial advisors. We talk about everything, all things wealth management. Last week, you had Jason Wank on the show from while Choweth talking about their new AI platform called Hazel. We're putting out good stuff. Yeah.

It's really, I was thinking, though, like, chat GPT, calling it chat GPT was like one of the biggest fumbles in history, the fact that they didn't call it a name, like a verb or a noun or name. That, that there has to be a rebrand at some point to call it something because every new AI system now is a name, right? It's kind of a cutesy name, right? You have to make it something people will back on to. How about this? Just drop the GPT. Just chat. Yeah, you're right.

Where's Justin Timberlake when you need him? So I talked to David Lowe this week, and that's going to come out on Thursday, I believe. And he is in the insurance industry. And I asked him, like, hey, AI has to somehow have an impact on the insurance agency, right? Because it's quantitatively based. It's numbers-based, actuaries, these types of things. And what he told me is that, okay, so we have a financial advisor group come to us and they have thousands of clients. And within those clients, there might be two to 300 different insurance policies.

And in the, you know, and they could be, what are they called? Why am I blanking on the term when you receive monthly income? Annuities. Thank you. My brain. So you have 300 annuities. And there's all these different legalese terms. And he said, now we could just, he said in the past, we would have kind of given a blanket statement on these things.

Now we just upload statements for two or three hundred of these annuities. And we can give perfect analysis like, hey, you should probably trade that one in for a new one. And he's like, we're doing work we couldn't do in the past. So sick. You know, this reminds me of my annuities. days or my insurance days, where in which I never sold a single policy to anybody outside my family. But there was, there was like people whose literal job it was to run the numbers. I mean, obviously, but of course it was a job.

See ya. But he's saying, he's saying the thing is we keep talking on AI, like what task is AI going to replace and, you know, that's fine. But what tasks is AI going to allow you to do that you couldn't do before? He's like, listen, we never could have done this before. We couldn't have looked at that many policies and that much data and that many perspectives. He's like, AI can do it for us now in the blink of an eye. And that's a cool thing I think that we're not thinking enough of like, what are the,

what are the things we can do that we didn't do before? Speaking of which, mid-journey, I knew Mid-Journey as this company where I think you, you started doing this first where you could type in a prompt and it would give you a picture. And this is before it was easier to do on all the LMs, right? My kids love this. Make a picture of Venom fighting Darth Vader. Yeah, so I had a mid-Journey account.

I think I paid for it at first. Now I don't need to anymore because I'm paying for it. for like the other stuff. Last week, Mid Journey decided that they came out with this full medical body scan that you could do a full, and remember, you didn't you just do this or something? You did a full body workup of something. I did blood work. Now, I remember we got a few people who said, hey, Michael, you might not be, a few medical people reached out and said, hey, Michael, you're not be covering everything by doing this full blood work, blah, blah, blah, blah, blah, and I think a bunch of people said this too. I just think it's kind of cool that we can have

something like this, that the future is going to be crazy is all I'm saying. Like stuff is coming, and I think it's really cool to see this. Even if it's, even if this is not a full proof, because there's a lot of medical people. Well, no, way, way, wait. All right, one more piece of good news. Are you, I can't imagine you're under the World Cup at all. Are you a World Cup guy? Not at all.

Okay, you were under the NBA. I kind of got into it. My kids are enjoying it. It's funny because my kids get a lot of their sports takes from YouTube, right? They watch YouTube kids and my son, his NBA takes are just all kind of broke because whoever YouTube he follows on YouTube. You know, he's telling me like, this person is the god. James Harden is so much better than Jalen Brunson.

Yeah. So I have to like, so he's like, oh, Rinaldo is the goat, not messy. And I'm like, no, no, no, you don't realize. Messy's like, he's the best player ever. You don't get it. You're listening to the wrong YouTube person. So Messi had like five goals. Anyway, there's all these stories going.

ABC News had this story about how people from Europe are coming in and they're going viral because they're talking about, I'm sure you've seen some of this stuff on Twitter. The people in Europe going viral talking about the normal things we have in America. And so here's something from ABC News. Many visitors have expressed a prize that conveniences Americans often take for granted, including free ice, refill stations, 24-hour retail operations, and the overall friendliness of the consumer. And they interviewed this person. He said, what Americans consider ordinary is often extraordinary to visitors.

And obviously, there's some of this when Americans go to Europe, too, right? There's things that they have that we don't. But I think it's just a great thing that it's funny. They said travel researchers have long found that tourists do not simply consume landmarks. They consume daily life. And it's like the people, not the place. that matter anymore. And I just think that there's this thing

on social media that we should all hate each other, right? And it's so cool to see people have like positive experiences, right? And it's like, we hit the Europeans and they hate us and the European mind can't comprehend. It's like, no, no, no, no. When they come here, like, they're optimistic and positive. Kind of the way we are when we go over there.

I think it's just really cool to see. I agree. Very cool. Love it. Yeah. All right. All right, let's do some stuff on prediction markets. So Schwab is getting in the game. Prediction markets are, they're not going away. They are going to be a lot bigger in the future than they are today. I don't know how big deal.

Can you really see Schwab customers using them? Yeah. Just for some binary bets. Like, is it going to be a big part of their business? No, I don't think so. But will the S&P 500 be up on Fed Day? I think there is an appetite for this. I just feel like the degenerate economy stays to the,

original degenerate places and not, I feel like if like Vanguard and Schwab try to get into this stuff, it's not going to work. You know what? Maybe I'm wrong. What's a harm in turning it on? Fair.

Right? It's like, they're not going all in. Like, whatever. They're going to offer it, um, where appropriate. They're not going to like,

let you do sports parlays or anything like that. But that's the thing, as we've seen, that's what it's used mostly for as sports parlays. It's like 90, it's still like 90 plus percent sports. Right. Um, all right,

I did like this. I've been, I've been critical of, of some of the stuff that's happening, So credit where credit is due. Cali plans to require users disclose where they work to make certain trades. This is from the Wall Street Journal. Cali has planned to require that participants in some prediction markets disclose the identity of their employers.

After an advisor committee recommended tight of security measures to combat potential inside of trading and market manipulation. Duh. I mean, who says no? Who says no to this? It's pretty easy. This happened. Accounts belonging to military spouses on Cali made accurate bets on whether or on when former Venezuela president Nicholas Maduro

would be ousted just days before he was seized by U.S. officials in January. At least one of those accounts was referred to federal investigators with this. I mean, what the fuck? No. Straight to jail. You can't do this?

That sounds like trade us. Can you imagine someone in like betting on when D-Day is going to happen back in the 40s or something? Gross. It is very gross. I didn't miss this one. A Google employee was charged with insider trading on Polly Market.

This person made more than a million dollars using non-public information to bet on who would be the most searched people of 2025. Gosh. Oh, here's a tweet from Ryan Chern, speaking about what people are actually using it for. This is the primary source of prediction market nihilism. Two years ago, prediction market volume was over 90% politics and economics. Today, these same categories are under 6% of total volume. So it's basically, it's all sports and parlias and sports parlays.

The idea was, yeah, you're going to be, because sometimes the market doesn't react to the headlines very well, the data. But it's like, no, you don't have to worry about that over your underreaction by the market. You can actually bet on the actual outcomes, but no one wants to use it for that. Polymarket got busted. There was an investigative report done by the Wall Street Journal. They looked like they were getting rich on polymarket, but none of it was real. That's a headline. Basically, they, hey, let me not.

Let me just read it. In his videos, George Machiara appears to have a lucrative side hustle making bets on Polymarket. In January, the college student posted a video that showed him winning $100,000 on a wager that President Trump would public say the word McDonald's that month. The bet was one of 445 that Machiara appeared to place in Polymarkets website between January and in May based on his videos, bets adding up to almost $410,000. But none of those bets were real, according to a Wall Street Journal investigation.

So apparently they paid a lot of influencers. to post fake trades and fake wins and not awesome. Oh, I thought this guy was faking. But Polly Market was trying to show. They paid a bunch of influencers to post fake shit. The journal reviewed 1,105 videos posted by 10 creators, endorsed by Polly Markets contractor between December 20, 25, and mid-May. 70% of the videos are creators placed a bet.

Clues in the videos showed that none of the bets, $1.9 million in total were real. Oof. These 118 videos depicted creators winning almost $900,000, and in reality, those bets would have lost more than $166,000. Not awesome. Not awesome. Yeah, that's, oh, not good.

Yeah, that sort of stuff is frowned upon. So, the fact that this is all sports betting, what if just another better platform for sports betting comes along? That's what, how are these companies, what moat do these companies have at all? Because they, they just stole from draft kings and Fandul. If you're not going to use it for politics and economics, and obviously when the presidential election comes around, it'll be more politics-based.

But I don't see what kind of moat these firms have. It's regulatory. But that, that's not a moat if regulations can get you. Yes, it is. These companies spend tens of millions of dollars on legal and lobbyists and all that sort of stuff. It's definitely a moat. All right. Well, yes, obviously it helps when the president's son is on the board or something.

But what happens if there's a change in office? At that point, these companies aren't hugely under pressure. I don't know. All right. Let's talk about crypto. I'm going to talk about Ethereum. Because look at the price of this thing. It's essentially back to almost the 2017 highs, which was like 1,400-ish. Okay?

I remember this piece. Paki McCormick wrote this in 2021. It called Own the Internet, the bulk case for Ethereum. He talked about Patrick O'Shaughnessy had Justin Drake on business breakdown to discuss Ethereum. James Wang wrote a great post on Ethereum's Q&U results. Bloomberg's Joe Wisenthol wrote about a post about finance normally is getting ETH pill. Generally, a lot of the smartest people I know are getting very excited about Ethereum. And the idea was, remember, it's like, hey, if you could invest in the HTT or HTML or whatever, that's like what Ethereum is.

Right? It's smart contracts. It's like the smart way instead of Bitcoin. What happened? I don't know what happened to this thing? It just seems to be nothing happening with it. Why was everyone so wrong about this? If you're asking me what happened to the Ethereum network and the prices,

I don't know that I could give you a great answer. What happened to this thing being like, I'm going to own the internet. Ethereum is owning the internet. Smart contracts. A lot of people were saying this. I want to know what happened. Because I feel like a lot of this stuff, we have the hype, and then there's no explanation afterwards when the hype doesn't come true.

Well, what's really interesting is that crypto is having a moment. It's just the blockchain and not the tokens. And I know that sounds like punch yourself in the face, asshole. Remember, that was the funny meme. Like, I'm bullish on the blockchain, not Bitcoin. But I'm serious. Look at what's happening to all of the exchanges are getting destroyed. That's more of actually a Kalshi listing there perpetual's issue than a crypto thing.

But look at Visa and MasterCard. These stocks are getting hurt pretty bad. Their multiples are coming down. And a lot of the chatter is... Do you think that's a stablecoin thing? It's because of stable coin and the future of crypto and what's going to happen there. And just this week, Andrew Cromo, the former governor of New York, will co-chair a joint venture between the owner of the New York Stock Exchange. and the crypto exchange,

OKX, the two companies, the project will focus on taking New York Stock Exchange listed assets and tokenizing them or putting them into blockchain wrappers. So there is stuff happening. Yeah, Visa's 12% off the highs. Come on.

Visa is 12% off the highs? Yeah. That's it? Yeah. I'm just saying, I want an explanation for what happened. Because there's a lot of people saying, like, this is it.

This smart contracts. These are the thing. Nothing happened with this stuff. Nothing. All right. Well, here's an explanation. They were wrong. I mean, what more do you need?

All right. Fine. I just think it's good to remember that. I think people lost their minds in 2021. Remember this thing? People sold an NFT for $69 million. You remember this? This is one of my favorite post from Drew Dixon.

He posted this Ethereum Rock was selling for $2.2 million. And he put it against a house in Florida on the water. That was also selling for $2.2 million. And he said, which one would you choose? I think people forget, people lost their goddamn minds in 2021 for a period of time. So, 2021 was the drunkest experience of investor euphoria that I've ever witnessed. It's kind of, I mean, I know that we had a lot of stocks that fell 50, 60, 70% back then. And obviously, Bitcoin had a crash.

It is kind of crazy that it didn't really spill over to the rest of the market, which obviously wouldn't happen these days. If AI really blew up, you wouldn't have that scenario where the market only falls 20% or something. Yeah. Anyway, I just think it's a good reminder of that. People really lost their minds back then. Mm-hmm. I think that period was way more of a speculative mania than the current one. And I don't think it's close.

Oh, I agree. I totally agree. That was a speculative mania. This current environment is different. I'm not saying that it's not speculative. Of course, there is an element of that, no doubt, but it's being driven by real shit. Yes, there's way more real stuff. Like, I don't know, earnings and margins. Right.

All right. This is a chart from Morgan Stanley. I don't know how many people would actually believe this. They look at affordability going back to 1991. And they break down affordability, basically showing the current levels it's fallen because I think incomes have risen. So this is monthly payment as a percentage of income. Now is the same as it was in 2007, 2004-ish, and then like 1994. How many people do you think would believe this if you show them this?

That affordability is that... Not that many, right? I think one of the hard parts for this, like the forwardability thing might be the same is in terms of income because incomes have risen, but it's just the activity is so much lower. That's what makes it harder. Because, yes, you can't, there's not enough houses to buy in most places. So even if you have the ability to buy, it's hard.

Mike Simons looked at this thing, like, how is it going to, how is it? is speaking of normal, that there being no such thing as normal. How long will it take to get back to a normal level of activity? And he's showing if rates are at 5.5% or 6.5% and he's looking at these different ranges. And he's saying it's probably somewhere like the early 2030s. And it's funny because getting back to the whole there being no such thing as normal, there hasn't been a normal housing market this entire century, right? We went from a housing bubble in the early 2000s to a housing bust. I don't think. you could even call the 2010's normal because people were still such shell shock. No.

And they weren't building. And then 2020 is of course is not normal. So I don't think you could you could plot a path out saying what's going to happen in a more normal environment because there's no such thing as normal in the housing market. I mentioned a couple, I mentioned a few times on the show that I think housing might be, might be turning a corner. We saw a jump in it in existing home sales. And I point to some of the stocks that are, you know, working a little bit. And then I look at Zillow and I say, well, maybe not. So Zillow stock is 66% off its highs in the last three years, but it made a new, it made an all-time high earlier.

So it's 85% off the all-term highs. It, in 2021, during the mania, it had a $48 billion market cap. It is now under seven. Holy. I made the mistake of buying this company. It was down 40%. Then I think it dropped another 30 from there. I'm like, all right, fine.

I'm out. This is shocking to me with how, how strong of a brand that they have. Yeah. You would think the Zillow brand alone is worth, I don't know, make up a number. 15 billion. It's shocking. So 48 to 7 billion.

Holy cow. And still just getting hammered all the time. Is there any like takeover activity possible for a name like this? I mean, at some point, if it gets to $5 billion, like, I don't know. Who would be the buyer? No idea. private equity. Yeah.

All right. The latest Social Security report came out. They do this annual report every year. And they run the numbers based on the demographics and how much payouts have happened. And they look and they said between now in 2032 or 33, they can handle 100% of the payouts from all the taxes coming in and the current Social Security fund. By 2034, it will drop to 83%. That's a projection. by 21, the year 2100,

still be 65% based on, so in 2034, when it drops 17%, what happens? Do they cut Social Security benefits? Or does the government actually just decide, we're going to pay more? They'll pay more. Right, they'll just go into debt to pay it. All right.

We have five minutes to wrap this up because Verizon is on their way to my house. All right, Toy Story, five. Monster, open with $160 million, according to Eric Davis, that is the biggest opening of 2026, the biggest opening for a Toy Story movie, the second biggest opening ever for an animated movie, and the second biggest opening ever for Pixar behind The Incredibles, too. I thought this is great.

I mean, obviously, it's Toy Story. Like, they don't miss. It was wonderful. It's a great movie. You watched it already? Did I fall asleep twice? Yes, I did. But my kids loved it, and it was good.

I agree with Tarantino. This should have ended after the third one. I know why they keep making these But I thought the Like the way that they wrapped the third run up I thought it was perfect The kids left and they didn't need to make more of these But I get why they're doing it

All right, Widows Bay This show had a lot of hype And I think like everybody else When there's a lot of hype, you underreact I think that probably is what happened to me I like the show just fine When you describe the premise of the show And the way that the show came out

It's a ridiculous premise the island is haunted and blah, I mean, it's nonsense. And it was a serious show. Like, they did a really good job with it. I just don't know that I loved watching it. And again, maybe it was because I thought, like, maybe I was just infected by the hype machine.

But what are your thoughts? Did you love it? Because I didn't love it. I liked it. See, I never got into the hype machine at all on this for somebody's and listen to anything on it. I just, I heard about it. So I'm taking the other side of this.

I liked it. You said, you said this is a one-season show. I thought they left, they probably left way too much on the table in terms of, like, two open-ended at the end to want a season two, but I can't wait for season two. I like,

I really, really liked this show. I thought it was very good. He was good. And it just, it made me kind of want more. I wish they would have done a little more with the finale. My wife was like,

oh, that's it. That's the payoff. It wasn't much of a payoff at the end. It was a seven. I enjoyed it. And yes, and I'm excited for season two now. But,

so I stayed away from the hype machine. So maybe my expectations didn't be too, too inflated. Okay. I watched the hand that rocks a cradle. they did on the rewatchables. It's on Netflix. I watched it too.

I'm pretty sure I saw this movie in the 90s, but I can't quite remember. I watched it one time in the 90s on TNT or something. Okay. It's such a, it's such a 90s movie.

First of all, great title. Are you kidding me? The Hand of the Box Cradle? Yeah. And it's just, it's just a classic 90s thriller. Like, by the way,

it's not rewatchable. Like, that is not, I guess it's only just like, they did it further rewatchable because it's like, it's hilarious. That's a movie you watch

Watch once and don't need to revisit. Yeah, ever, ever, ever. But it did remind me, it's like they don't make thrillers like that anymore. Just like the slow burn thriller, which was a staple of the 90s. And as a matter of fact, Apple did revive it. Cape Fear, Cape Fear feels like a modern day thriller, the Apple TV show. Because it's a remake of a 90s movie. Yeah, they're doing a good job there.

I know you got to learn. I got a quick story here for you. I got to tell. Two minutes, go. I have a good morning lady at my office. So I walk out of my office a couple weeks ago, and this lady, you know, walking in with like three purses and sunglasses on and coffee. And she goes, good morning.

And I said, hey, and I don't know what this is. I said, hey, good morning. And she said, that's all I get. And I said, oh, come on. She's like, you're a man, a few words. I'm like, okay, I don't know you. Anyway, I walk out of my office this morning. I'm going to the bathroom.

This woman is 10 feet behind me. She says, good morning. And I thought she's on the phone or something. And she said, excuse me to me. And I'm walking to the bathroom. I said, are you? talking to, are you talking to me? She said, yes, I said, good morning to you. You could say it back. And I said, I'm sorry, I didn't realize you were talking to me. I'm 10 feet ahead of you.

And, and she said, geez, you could have said, I'm like, I wanted to be like, hey, what, what's going on here? Sorry. I like, I like it. We, you know, positivity in the world. I love it. That is funny. I guess. Yeah, she wants more than a good morning. And, um, all right. Next, just give her hug next time. I guess so. What about, what do you want for me, lady? Gosh. All right. Animal Spirits pod at the compound news.com.com. Where is confused as you are About the stock market and where it goes from here Interesting times

All right, we'll see you next time Thank you for listening You one of those media strategy people Clicking through slides scrolling spreadsheets Yes? Good, this is for you Because on Spotify there's an audience that's different Locked in, Loyal, Invested,

They're called fans Fans don't just listen to music They feel seen by it Like it belongs to them So when your brand shows up on Spotify That's who you're talking to And you're right next to artists like me, Lizzo. So, are you ready to talk to fans?

Spotify Advertising, you're among fans.