Animal Spirits Podcast - Home Buyer's Remorse (EP. 458)

Episode Date: April 1, 2026

On episode 458 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss: recession fears, the stock market is bad at recession predictions, why this is an orderly sell-off, earnings are still rising, stocks rarely finish the year down, there are so many rich people, wealth inequality vs. socialism, house money pits, private credit redemptions and more. This episode is sponsored by Teucrium and Janus Henderson Investors. Find out more at https://teucrium.com/agricultural-commodity-etfs  Learn more at https://www.janushenderson.com/ 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

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like combining your portfolio plans and our in-depth strategy, your valued assets, and our valuable insights, your mission, and our vision. Always working in perfect harmony to find the right investment opportunities, Janice Henderson investors, investing in a brighter future together. Visit janicehenderson.com. 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. are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spurts with Michael and Ben. Ben, it's good to see you. You too, as always. You got a big profile on Barrens dropped this morning.

Congrats. Thank you. It was the first of probably many media appearances for my book that's coming out soon. Ah, okay. I was talking to Barry about this, how the book tour is now the podcast tour. There's still some legacy financial media, but I'll be doing a lot of podcasts in the weeks and months ahead. When does the book come out? May 12th.

Okay. All right, soon. All right. Speaking of Barry, Barry and the team are going to San Francisco, the week of April 14th. My partner, Chris will be out there. We'll have a bunch of financial advisors out there. If you are a prospective client, if you want to learn about how we work with clients here, or if you are a financial advisor right there who is looking to learn more about how we onboard advisors here, reach out to us. We'd love to hear from you. Info at ridholtzwaltzwalt.com.

See, you did it for my roast. What's that? You said my partner, Chris. Wait, well, I think I would be what did you say? Did I say that again? I said that. Well, nobody knows who Chris is. I know, but it's funny that you call him your partner. That's the funny part.

Okay. Well, there's an audience, Ben. I'm not just talking to you. When I'm talking to you, I don't call my partner, Chris. But when there's an audience, people who don't know who Chris is, I have to. I think it's funny when you call him your partner. That's all I'm saying. Well, what should I call him?

I don't know. My colleague, Chris. He's more than my colleague. We started this business together. He's my partner. Anyway, anywho. I've been waiting to drop it ostensibly, and I can't figure out how to do it. Oh, you know what?

I forgot to go back to the tape. I meant to ask Rob to, I want to tape check you and find out how often I actually use that word that I'm now subconscious about. I won't be using it. Oh, I bet we could word cloud that. How often do you say it ostensibly? Well, what is all the time mean? I feel like that's got to be at least once an episode, no?

Yeah, pretty close. It's just for a big word. I feel like, hey, I'm jealous. I wish I could use a big word like that. I will set the over under so less than one. I'm going to say, I'm going to say 0.5. I'm going to say every other episode tops. And I would even still take the under.

Okay. You sure about that? You sure about that every episode? No, I said not. I said every other episode. No, you didn't. You just said every. All right.

I said every other. I would even go as far to say as one out of three. you use that word way more than the average person. How's that? Because I've never used it. I've never used it. Keep moving the goalpost. Keep moving the goalpost.

All right. Okay. So a couple of weeks ago, I said into this here camera that the burden of proof is on you. Meaning, if you think that we are about to enter an actual bare market, then the burden of proof is on you. Because the market generally overreacts. So right now, it is just, it's just not overreacting. It is a, it is a very orderly sell-off.

That's a good way to put it. The Vix has not really spiked at all. Joe We We haven't had a 2% down day during this war. Yeah. And so I pulled all the returns. If you look at them, there's nothing. Like the worst return is like a negative 1.7% on a daily basis. We haven't even had one like day that's like, oh, geez, here it is.

is not even close. Okay. So all of this leads me to believe to stick with the courtroom analogy, the stock market has to be proven guilty beyond a reasonable doubt. And when I say stock market, I'm talking about things that actually drive the stock market on a longer term basis. Inflation, interest rates, and most especially earnings. And last week was anecdotally the first time that I started to hear the R word recession.

And I suspect, I could be wrong, but I suspect more than a little that this is a classic case of the stock market predicting nine of the last five recessions. And let me just introduce to you, ladies and gentlemen of the jury, two pieces of evidence. I pulled this from our friends at the transcript. This quote is from the chairman and CEO of Arthur J. Gallagher, which is a, I believe, an insurance brokerage type of thingy-majiggy. Through mid-March, our daily revenue indications from audits, endorsements, and cancellations are still in positive territory, indicating continued solid business activity and no signs of a broad slowdown.

We're just not seeing signs of economic weakness. And I'll give you one more, maybe more relevant to the broader economy. Paychecks, CEO. And paychecks processes, paychecks, accounts, all that sort of stuff. Ostensibly, they process paychecks for people. I look this up. Over 700,000 smaller mid-sized businesses in the United States, okay?

So they've got their finger on the pulse, so to speak. What we're seeing, this from the CEO, what we're seeing is a stable macro environment. no signs of recession in any of our data or indicators. Nothing that would indicate that we would change what we're thinking in terms of pace on any of our segments at this point in time. Now, of course, as always, you could point to the housing market weakness. You could point to the hiring weakness. You could point to AI fears and private credit fears and, of course, oil. And I'm not saying there's nothing to worry about.

So don't misunderstand me. But I think this is a wonderful. long-term opportunity for investors. I think that assuming that this ends at some point in time, and I don't know when it's going to end, and I'm not suggesting a V-shaped rally. And in fact, let me be very clear. The sellers are clearly obviously in control right now, right?

So I'm not saying like throw caution to the wind. I respect trend. And right now the trend is lower. The path of least resistance is lower. But that can and will change in my opinion. And I think once this, once all of these headings, when subside, assuming that the economy doesn't roll over, assuming that earnings stay positive, I think that this will, in the second half of the year, maybe next year, who knows, will be looked

back on as I can't believe I didn't buy. That's how I feel. I think it's important that you're distinguishing between a recession and a correction, because, listen, most corrections don't lead to recession. You're right, the stock market predicts them because guess what, we haven't had one, a real one in 17 years. So all the corrections we've had along the way that thought the economy was slowing, they were wrong. And every time, we do this every time. So we show the chart every year of the average of the max intry year drawdown and the average of overtime.

And what is it? 14%? Depending on when you look at a 14 or 16%. So every year on average has an intra year 14% decline. And right now we're at 9%. Yes. So I pulled this. But every year we forget that this happens every year.

Yeah, and my take on the economy would be, it's proven to be so strong. I totally agree with you that it's got to be lawyer speak beyond a reasonable doubt. This would have to, the whole energy crisis would have to last a lot longer for it to have an impact on the economy. That's my general feeling now. Now there is, there are, so again, we're just normal crutch entirety. You mentioned that the S&P from the highs is down nine. The Russell 2000 is down 11, so is the EFA, emerging markets are down 13, NASDAQ 100 is down 12, gold is down 16%. There are some areas that software is down 34%.

Silver is down 40% from the highs. Bitcoin is almost in a 50% drawdown. Ethereum down almost 60%. So there are places you can look at that. Okay, these are pretty bombed out things. 40% of the index last I checked of the S&P was down 20% and more. To your point, there's names that are getting absolutely destroyed. Let's look at a company like Micron, for example.

So Micron reported next week, and this is one of the best performing stocks, right? So it went straight up. So the fact that it's giving some back is whatever, pretty normal. But Micron fell 30% in a few weeks after reporting earnings. And this is what the CFO said on the call. Micron sent new records across revenue, gross margins, EPS, and free cash flow. Fiscal Q2 DRAM revenue was a record $18.8 billion. Up, listen to this, Ben, 207% year over year.

up 207% year every year, and the stock is in a 30% decline. For all the talk that we had in 2025 about the inevitability of a bubble forming, like it's coming, just wait for it. The fact that the market has rejected it with both hands, I think is awesome for long-term returns. So your point about this being a potential good opportunity, chart kid Matt, and he's got a blog too, by the way, people, chart kidmat.com, subscribe there for his charts. he shows, so I think you can make the case that if this is just a blip and there's no big economy-wide tail on this, then there's a lot of stocks that are probably pretty cheap because he shows that

the forward price to earnings is now at new all-time highs while the index is rolling over. And if you look at the, he shows how equity, and this is on Exhibit A as well, if you go there, Exhibit A for Advice.com. He's showing that this year's fundamentals, earnings growth is, is, is, strong 5%, dividends are kicking in a little, and peas have contracted by 10%. So the reason that stocks are down is because valuations have fallen. Now you could say, hey, wait a minute, that does kind of make sense. Inflation might be higher.

Like, you know, these things do happen where earnings and stock prices don't always exist in the same. They don't always follow each other. So that could make sense. But I think that if this is a blip, this is a Taco Liberation Day kind of thing, you're going to go, man, there are some cheap stocks out there that were getting bombed out that I could have bought. Yeah. So the sell-off makes sense. I'm not saying like people are being stupid for selling their stocks. I understand why the stock market is following. We had a bunch of emails

about the taco stuff. And this is a very fair point. It takes two sides to taco in this case. It's like, what if Trump is like, all right, mission accomplished, we're done. And then Iran's like, well, we're not done. We're not done. This is not as easy as the tariff thing. I totally agree with that. There's a lot more going on here. So duality research has a similar chart that Matt did, where he breaks down the sector returns of the S&P into the price return, the EPS growth, and the P.E. multiple. And every sector has positive earnings growth, every single one. And the only three sectors with multiple expansion, obviously energy stocks and utilities

in Staples. But where it really matters, technology. Earnings are up 18%. 18%. And yet technology stocks are down 12%. That's 25% multiple compression. I actually think that some multiple compression is warranted in tech stocks. Of course it is. With all the money that they're spending and they're becoming more asset heavy and less asset light and less intangible, like the valuation compression there makes a lot of sense to me. But has it gone too far?

Two things can be true. The market is, the market is sniffing something out that doesn't smell too good. Redpoint did a big report on what's going on in software. And they estimate that 95% of the current price action is by terminal value. So that's why all these companies, Adobe, Duo Lingo, where you see, their earnings per share on an all-time high, and the stocks are down 70%. Right. Yeah, the market's not dumb.

It doesn't matter. It could put up record earnings for the next six quarters. But if the market believes that ultimately Adobe's business will be a fraction of what it is today in 10 years, that's all that matters. Yes. And that's why stock picking is hard. because you could probably buy a basket of companies right now and be okay. But if you try to buy a few stocks that you think, well, the market is wrong because I got the P and I got the E.

I can calculate that. It's not as easy as that. Yeah. So anyway, interesting market as always. Carl Kintanated tweeted this is from Goldman. Since the start of the war, long only trading activity on our desk has essentially been non-existent. It is eerie. I worry that we are now approaching the point of this conflict where the long-only community will become unfrozen and start.

cutting some real risk. I think every day investors are looking at the screen and, you know, we market fell, uh, market fell yesterday. I tried to open high or sold intraday. But where is like the, where is the trap door down 3% day where the VIX gets to 45 and people like, now there's always a camp in a bear more in a correction. There's always a camp that says you need capitulation. I don't know where that comes from.

I mean, I get it. You know, you need people to like really like throwing the towel and the same way that's coming from. But you don't need it. No offense to the vampire squid, though. But are we really, I can't really put Goldman in the same bucket as like the long-term vanguard target date investors. Like, those are real long-term investors.

I don't put Goldman in that bucket. No offense to that. It didn't say long-term. It didn't say long-term. It said long-long-long-old. Sorry, long-only. Yeah. So you mentioned the volatility being normal thing.

I just had to, I've been totally claw-pilled. I just wanted to go on record saying this. It probably took me too long. Dude, wait till you discover coffee. But it's by far the, it's by far the best financial analysts of all of the LMs. It's not even close. Is that fair?

From our perspective and what we use it for? Yeah. So I did this thing where a chart kid Matt helped me create this chart that showed just volatility is normal, right? And the number of drawdown since 1928. We looked at 10% worse, 15. And someone said, okay, Ben, what's the forward return from there? I said, all, yeah, you know, I've probably done this in the past with me.

And so I just said, at the end of a month, the S&P finishes down 10%, 20% or 30%. What are your forward returns look like? Okay, so I still had to do some calculations because I want to make sure I get these numbers right at. I don't quite trust it 100% yet. So I did some calculations really quick. It takes me five minutes. And then I upload that spreadsheet to Claude. I say, I need you to figure out from these dates mix and match these returns that I calculated with these specific drawdown points, right?

And it does it immediately. Now, this probably would have taken me, if I did this five years ago, like I would have by hand, it would take me two hours, probably. It did it in 30 seconds. And oh, by the way, it said, hey, just so you know, I color-coded these drawdowns for you, and I color-coded the gains as well. And I calculated the average returns and the win rates. Okay, so I still have to go and check these

because I want to make sure, but it just shows, look at the win rates. If you buy at the, again, this is the end of the month. The reason I did end of the month is because I like total returns, right? I'm not a price return guy. I'm a total return guy. But the win rates are all in the 90%. If you just buy down 10%,

your average returns going forward are like, for the next 12, 36, and 60 months are 15, 42, and 72. It's pretty good. They're all pretty close if you buy down these 10, 20, or 30 percent. And the win rates are all 93, 94, 90, 99. Like, it's really, really high win rates if you buy stocks and they're down. But when you don't win, you lose bigly. Yes, obviously.

Yeah. I thought this is kind of interesting, too. Now, some people will say, like, why does it matter how long it takes the Earth to rotator on the sun, right? Why do we care about calendar years? I don't know. This is kind of fun. So since 2009, and I knew this. Wait, hold on.

You think calendar years are kind of fun, but birthdays aren't? And to be clear, I am not a birthday guy. So even though Ben is a birthday grinch, it's not like I'm like, oh, everybody texts me celebrate my birthday. Like, I don't like to celebrate my birthday. In fact, I hate to celebrate my birthday. So I am not a spotlight guy. I get like social anxiety in large crowds like that.

Last year in Miami you did that. I did what? you got socially anxious when everyone's celebrating you in that steakhouse with the fireworks. Yes, yeah. So that, I don't get anxious about a lot of things, but it makes me sweat.

I just, I really feel uncomfortable in those situations. For my bar mitzvah, I get so uncomfortable that I had like a sports party because my nightmare was for bar mitzzo as they bring the boys and girls out and like all the people look at them and they dance with the dancers. And like that's the worst thing for me. So anyway,

back to calendar years, Ben. Let's hear why you like calendar years. Since 2009, there have been exactly two down calendar years in the S&B 500. okay. So we're like 17 years. There's been two down years. 2018 was negative 4%. 2020 was negative 18%. Okay. That's it. Those are the only down years that we've had since 2009. So far, 2026, as of the closed Monday, was down 7%. The point is, down years don't happen.

Now you can say, well, this has been an extremely great run. So from 2000- Who cares? Give us a down year. I mean, I don't want to fall 30%, but if we, fall, if the S&P closes down 7% this year, is that, is that the end of the world? No, that's what's funny. If the S&P closed down 7%, it would be the worst year, it would be the second worst year since 2008 essentially. It's just crazy to think about that. Like right now, that's how good investors have had it.

Because, yeah, the market fell of four out of 10 years from 2000, 2009. So my point is that like, this is. And to be clear, investors have had it so good. and they have because companies have delivered so good. And now obviously two down years, but there's been plenty of corrections along the way. That's what I'm saying with going on the sun. Okay, Torsten, I just think it's fascinated to think that as much worry as there's been.

There's been literally two down years in almost two decades. All right. So this is my whole point about as much anxiety about the market and the economy with AI as people have. And the market's only down 9%. Right. I just don't buy that war whistling past the graveyard. Sorry.

I mean, maybe there's a lot of egg on my face coming if there's a financial crisis that I missed, but I don't know. Not my base case. Okay. So Torson's Lock says the same thing. Markets are too focused on the near-term challenges from higher oil prices. The real tradeoff for investors is four to six weeks of instability, paying off 50 years of stability in oil market supply chains in geopolitics.

The Gulf region will be more stable and even more closely integrated with the global economy. and I put the Tobias Fumke thing in here. Did it work for those people? No, it never does, but these people somehow dilute themselves. I think it might, but it might work for us. What's this meme from? It's an arrested development one. I mean, you really, I might have to rewatch the whole first three seasons of the show.

It's one of the great sitcoms of all time. And it's full of memes that you don't understand. And the thing is it wasn't a popular show and it's not. Wait, hold on. Is that Bateman and Will Arnett? Yes. It was like that was Bateman's comeback essentially from being in non-existent forever. That was his and Will Arnett's...

Did you watch the Madison? I did not yet. Okay, Will Arnett makes a very interesting appearance in that show. Not exactly the person I thought would be on screen. Okay. All right. And I feel like there's too many Taylor Sheridan shows. I can't keep up with all the shows.

We'll get to that later. What about, what about DTF, the Bateman show? Yes, I'm still under that one. I like it. I can see how a lot of... I can see how some... people would be turned off by it and wouldn't like it and go, ooh, what is this? I, I think the guy from Stranger Things, his name is escaping me. I think when he does the sign language,

interpretation, interpretive dance, I think he's hilarious in this show. It's very funny. Yeah. But anyway, my point is, I just, the idea that this is all the sudden, things in the Middle East are going to be fixed, I feel like every president has said, like, I'm going to go in and fix the Middle East. And I just don't think it's fixable for us. I don't think we can fix it. Well, yeah, there's been thousands of years of conflict. I think you're probably right, Ben. All right. So my worry is like, okay, Iran goes, oh, this trade of Hormuz is more important than ever.

Like, we're going to use this as a choke point. This is going to be a worry for the next 20 years of them using it as a choke point. Like, I can't imagine this is the last we're going to hear about this. Even if we say, all right, we're done. We're out of here. Like, this is more important than it was before this. So I don't, 50 years of stability. I don't, I don't buy that at all.

No way. Yeah, I don't think anybody buys that. I mean, hello, what you're born yesterday? The Bloomberg made a chart of the difference between European gas prices, natural gas specifically and U.S. And look what the fracking revolution did to our country and our energy independence, which was like very much a political issue in the 2010s, right? like that was a very heated argument and it turns out

Energy Independence is a good thing So I'm my new audible is I'm listening to How the World Really Works Backlov Smeil is his name I think I can pronounce that right And it was one that I tried to read and I just couldn't get through it But I put on audiobooks and the whole point of the book is Everyone a lot of people think that fossil fuels are bad

And they're really bad for the world And they're destroying the world But he says like we would not have gotten to where we are as a society without fossil fuels. And it's looking at kind of both sides of this and saying like how much more energy efficient we've gotten over time. And it's kind of like the leaps forward are insane. But it's an interesting look at just like, listen, the world is not the way it is if we didn't have fossil fuels. You can hate them if you want. But it's anyway, interesting look at it. So what this chart is showing is that our natural gas prices are basically

on change of the last four years. There was a blip, short-term spike that came back down. But look at what it's doing to European gas prices. I'm really interested to see how much bigger the European response is going to be because they have to think, listen, we didn't do anything. We didn't start the Ukraine-Russia war. And we got hope. Our energy prices spiked. We didn't start the Iran war. Our energy prices spiked. Like, what is their response going to be? They're not just going to sit there and take this, are they? Forever? I mean, I just wonder if their fiscal defense spend is just going to go through the roof, because they can't just sit there and take this every time something happens at their energy prices spike, and ours don't. I just asked Claude,

okay, roughly 40% of European homes use natural gas as their primary heating source, and it's higher in other countries. So, yeah, this sucks for them. A lot of lot. Right. Yeah. Like, this really hurts. I guess the good thing is that it's not the winter, but still. They don't use air conditioning in Europe. So in the summer, they're going to be okay. Everyone just walks around sweaty with B.O. So it's like, it's like medieval times. All right, so I put this price of, I put the long-term chart of U.S. retail gas prices in here. The spike is insane. I'll quickly went from three to four dollars a gallon. I continue to think that if we, it's just a temporary spike, I don't think gas prices matter anymore.

Like, I know people see the big signs and they get angry with them, but I don't think for the economy, gas prices matter all that much. Is that a dumb statement? Yeah, it's pretty dumb. I think a short term spike, a short term spike. I don't think a short term spike, I'm saying for the economy. I'm not talking about people's pocketbooks. Yeah. I, for the overall economy, does a short term, does a short term rising gas prices matter? I don't know, probably very, very, very much on the margin. I don't think you'll see this in the data.

That's what I think. It's going to be marginal if it's just this short-term spike. All right, DFA had a cool chart. They looked at the correlation between oil price changes and energy sector returns from 1964 to 2025. And the correlation was 0.29, which is kind of shocking. You would have think oil and energy would move in lockstep. I don't even, I don't believe this.

Look at the chart. You don't believe it? Nope. If this is trying to show that energy stocks don't react, to the direction of oil prices, then I reject this chart. Okay, so they show, for example, oil was up more than a hundred. They might be saying like over the long term, it might not matter as much to think, fine. Nobody, not everybody lives in 10-year periods.

But they're showing annual returns. They're showing 12-month periods, okay? And they say, for example, oil was up more than 150% in 1974. Energy stocks fell. On the other hand, energy stocks were up in 2025, despite a market drop in oil prices. So what? everything, every stock fell in 1974. And every stock rose in 2025.

This chart doesn't do it for me. Sorry. Not impressed. I think the point is there's a lot of people who think energy stocks are a perfect, like why buy oil when you can just buy energy stocks? And the point is, it's not always a one-to-one hedge. That's the point. Have you seen energy stocks?

Yeah, they're doing well this year. But the point is it's not always like that. Yeah. Okay. All right. Rejected. Rejected. Recy bias wins.

Reject the historical. data. You're right. Oh, what? Because of 1974, energy stocks fell? This chart is crap. They show every year since 1964. How about this?

Okay. There's no rhyme or reason to this chart. Show it. Show a chart. Show this data presented differently. Show me rolling 30-day returns of energy stocks. And I bet you this looks a lot different. Yeah, you're zooming out.

I'm zooming in. Okay. The zoom out is 12-month period, though. I think that's not like a totally like takes away all the little. It's a, it's a zoom out. Okay. agree to disagree. All right.

No, you just agree to not trust the data sometimes. You're a data truther at times. Nope. You can manipulate the charts to show what you want. That's fair. I'm not data truth. The data is the data, and I don't like the way that this data is presented. All right.

I think it's interesting. The correlation being that low is surprising as all. There's no, I think the whole point is that. Energy shocks don't last 12 months all the time. This is, you're measuring the wrong thing. All right. Right. So I mentioned before, like, tech valuations probably should be compressed. And this chart from the FT, this is the reason why. So it shows revenue generated per dollar of fixed assets.

And for Facebook and Google and Microsoft and Amazon, it's going down, down. And for Apple, it's continued to rise a little bit because they're not spending money. All this means is that there's much, these companies are going more from intangible to tangible because of all the investments in AI. And it will be very interesting to think, like, listen, we had to do this. But is this the thing that finally changes this cycle of the tech premium. But it's more than a short-term blip. This changes it maybe forever. Like this whole 15-year cycle or whatever we've been on, this is the AI thing is the thing that finally changes it. The cost of data setters and the cost of compute, it's going to finally change this. This is a very, this is a very plausible

story. I could buy this. So if these companies were out, were, we're, we're living in a world. of 40 to 70% operating margins with high cash flow. And now this is, we have reached an inflection point. And that's the thing. And people go, wait a minute. Earnings are still growing 15% per year. Why is my stock going down? Or why is the valuation compressing?

I think that's going to be a thing that people are saying about a lot of these stocks going forward. I don't get it. That's what happened to Microsoft after the dot-com bubble. Earnings were growing like crazy. And the stock did nothing. People are going, this doesn't make any sense. Why isn't it matching the fundamentals?

Yeah. The difference is the stocks were, the valuations were absurd back then. So like Facebook is trading at 16 times forward earnings. So yes, obviously, obviously investors are saying timeout, this is not 2021 anymore. But I would also argue that at 16 times forward earnings for Facebook and 20 for Microsoft or whatever, the re-rating has sufficiently de-rested these stocks. I'm not saying, like, Microsoft is a business screaming by today, but, like, I think if you could, if you could put the stock away for a couple of years, I think you're going to make money.

Duncan asked me the other day, like, all these stocks that have gotten crushed, where would you look? And I said, my boring answer, and we talk about this and ask the compound, I get, I could go through a lot of different charts. It's just, I think you'd probably say, if I wanted to go bottom fishing right now, these stocks are down 30% or more. Every time meta and Microsoft fall like this.

If you're going to bottom fish, bottom fish in a mega cap name. Yeah. And guess what? One of these times maybe you're wrong and it takes a lot longer to come back. But that's where I would do it. That's like the safe answer, I would say. We had a really good podcast. Josh and I did a really good podcast with this guy, Jonathan Boyer, who's a value

investor. And I said to him, like, there's no extra points for difficulty with investing. And if you are a value investor and you're buying stocks because, is do you think the market is wrong? The burden of proof is really high. And guess what? Most of the time, most of the time,

the market's not wrong. And buying 52 week lows is a really, really, really, really, really bad long-term strategy. So I asked him, like, why not just wait until these stocks stop crashing? I'm not saying that you can know when the bottom is. Who can? But why at least, like, wait for some sort of signs that, okay, the selling has stopped, right? Like, the stock's not crashing anymore.

It's bottomed. rallied, it failed, it failed, like it's gone sideways, some consolidation. And he basically, he had a good, he had a good answer. He said, I do. I buy over time. And that's as good advance there as any. So, uh, just for the listeners, like if you, you know, I wouldn't say don't go all in on a stock that's in free fall. That's not a great, that usually doesn't work out well. You don't blow your whole lot on the first dip, right? Because I'm probably going to keep dipping. Uh, all right, 2025, it turns out was a really, really bad year for stock pickers.

79% Man, I thought it was going to be a stock pickers a year. Shoot. Well, 2026 is. Should be. No, it is. No, yeah, first, I'm saying it should be. I don't know that we don't know how the stock pickers are doing.

Okay, that's a good point. So, so yesterday, the equal weighted index was flat. It was down 1% than the year. And the S&P was down 7%. So by definition, it is a stock picker's year. I hope they picked the right stock. So I hope they avoided the mega. I hope they were underweight.

Listen, they're underwent at that's the point. Yeah, yeah, yeah. I'm sure. I'm sure. You figure out how many, are you a closet index around? That's what you figure out. Yeah. The crazy thing to me is that I wrote about this a little bit after we talked about last

week. If you look at the, for this Beeva report, if you look at the 10, 15, 20 year numbers and it's across, it's not just large cap, it's small cap, mid cap, it's all these different categories international. It's something like 90 to 95% of active managers underperform the index. And my baseline was always for indexes. funds, and I don't even make fun of you know what an index funds. But I assumed it would be 70, 75%. That seemed like a good baseline to me. Like that, that's how many active managers you all

perform just because of costs and fees and all that stuff usually. The fact that it's been 90 to 95 is kind of insane to me. I didn't think it would be that high. Yeah. And you could say, you could say this is the hardest period ever for stock pickers, and I wouldn't argue with you. Has been. But the fact that it's that high is pretty crazy to me. The fact that like indexing became so so popular. and people were talking about it being a bubble and it's going to lead to all these things and guess what, it worked better

than it's ever worked in history for indexing. That's the crazy part. All right, this story from the Wall Street Journal was flying around. People love to share these charts. They're rich but not famous and they're suddenly everywhere.

The number of Americans worth eight or nine figures is upmarkedly. It's transforming the U.S. economy. Now, they show this chart and they show there are 430,000 U.S. households worth $30 million or more. Hold on. Time out.

430,000. Isn't that crazy? And this is as of 2022. So this number is definitely higher. 74,000 people that are worth $100 million or more. Okay? Even adjusted for inflation,

the wealth of the top 0.1% of households has grown more than 13-fold over the past 50 years. Again, adjusted for inflation. That is a face-blowing stat. That's hard to believe. Wow. So they break this down.

They show the number of households by 30 million up, 50 million up, and 100 million up. But again, they're adjusting for inflation for these figures. And the 100 million of one just keeps going up. Even 50 and 30 is kind of a little more volatile. But there are so, so many rich people these days. And this is why there's like rich person anxiety too. You saw that viral story from the New York Times last week about the couple in New York who makes $500,000 a year.

and they say they're middle class. Okay. That shit really pisses people off. Oh, yeah. Rich people claiming that they're working class people. For good reason. That's, if you have make a half a million dollars a year in the top 1%, but this is why those people feel that way.

Because they go, yeah, sure, I make half a million dollars a year, but I'm not worth $30 million. Like my neighbor is Park Avenue or whatever. And I just... 430,000 households are worth $30 million or more? You sure that's as of $20 million? 22. It's insane, right?

Yes. As of 2022, because that's the last date of the Fed data for this. All right. And think about how much more the stock market is up, which is where all the wealth is since then. So what is it now? $700,000? That's the thing.

That is honestly like a, that is hard to believe. Wow. 2022 is also a bare market. So think about that. So yeah, it's probably now $600,000. So a couple things here. One, I think if you take this and the fact that. that it's not just like the top 10% of the top 5%.

It's really, it's not even the top 1%. It's like the top 0.1%. Yeah. I may be even short here. In the next 12 years, we're going to elect a socialist president in this country. No, stamp it. Rubbers with AI. AI is going to make inequality worse.

Okay? Think about what happened in New York. This is going to happen on a national basis. I hope the rich people collude and have as much power as we think they do to make sure that we don't get a socialist president. I'm just saying, if, If this trend keeps being in place and AI is going to make it worse, and we see all the corruption going on in the government right now, okay?

We are going to elect a socialist president. All right. So I don't know. Mark it down right now. Anything about... Obviously, I'm not saying I want that. I'm saying this is going to happen. This is where the country is going. Right, but isn't it, but isn't it really expensive to put somebody in office?

It is. So where does the money come from to get a socialist person to the top? How did the guy get elected in New York? I don't know. I think it's different at the national level. All right. I just, I think that's,

I think we're going down a bad path here. That's all I'm saying. I think that's where we're heading. Well, yes. This is, this is tough. Because again,

AI is going to make this worse. A. is not going to make inequality better. It's going to make it worse. But why? Why? You're going to be able to start a business with far fewer people. Guess what?

That's more, that's more money in the hands of, fewer people. Let me ask you a question. I'm being serious. So when we say wealth inequality is going to go get worse, let's just assume that the bottom, I don't know, 10% will see no improvement from AI, the bottom, bottom of the K.

What if AI impact, what if AI lifts the, lifts 70% of the economy? Then it would be a miracle technology if it did that. I don't think it's like, I don't think it's been. decided that this is going to make things a lot worse. I'm not saying that it's going to make things better. So that's not what I'm saying. But I don't know, I don't know that we can say that. I'm more sure about this than anything right now.

Really? Yes. AI is going to make inequality way worse. Think about starting a company with fewer people. And you can, you keep all that equity yourself. All right. Let me, let me read an email that we got. Okay.

Okay, this is actually exactly what we're talking about. I own a manufacturing firm in the rural Midwest. Cutting to the chase, my production people employees are generally lower quarter in IQ. Now, this sounds mean. I don't think this person is trying to be mean. It's hard for many people to imagine. But if I ask them to pick a half gallon 1% organic milk out at a grocery store shop, they would be flummoxed.

Too many ideas to hold at one time. Let's remember what AI is. artificial intelligence. In the same way the barcode scanner allowed a new cohort of people to be checkout people versus keying in all groceries or how spell check helps some people communicate by fixing almost every word, the adoption of AI actually extends the runway of employment for lots of people that graduated high school at the fourth grade reading level, which is a sixth of the population. He said one sixth of the population can't qualify to be in the military due to low IQ.

So this is a real issue. That's wild, but whatever. Different topic, I suppose. In short, the AI dumerism about it spreading the gap among halves and have-nots forgets that a lot of have-nots can use even the simplest AI to extend their skills on the workforce. That's a good alternative. Yes, I hope so.

Yes, I agree. The ability to do it will be there. A lot of these discussions, because obviously the same thing with every discussion, it's either all good or all bad. Yeah, right. The barriers to entry have been completely flattened if you want to learn about something. Right? You can ask as many questions.

Yeah, you're right. If you want to learn about a specific topic, it can give you step by step. It's, yes, it's there. The ability is there if people take it. Wow, 430,000 people with $30 million net worth. It's just unbelievable. All right, here's another one. So, speaking of the upper upper end of the K, so Delta Airlines, they said our consumer is really

healthy. We live at the top end of the K that people talk about, the premium end of the K. And that's where over 90% of our revenue is sourced from. The group of folks that want to travel, they're investing in themselves, they're investing in the experience economy. We've seen eight of the top 10 sales days in our history this quarter. And five of those within just the last two weeks, within just the last week of this past March, even with fuel prices, even with the war going on, our bookings are up 25% year of year. So I'm sorry. I'm I mean, I'm not sorry. I just think that the stock market is leading a lot of the discussion right now.

And assuming that we don't get a recession that earnings don't contract, from the point of view, the stock market, it's the oil market that's leading the discussion. Right. This is good. This is good stuff. For years, we talked about when will the travel boom stop? Remember, we thought it was, okay, this is just people are going to take a couple trips after the COVID, and then it's going to stop.

And it hasn't stopped at all. 30 million. I mean, okay, I keep popping at the 30 million. go down like two steps. How many people are $5 million? Right. And what stops then? All right.

Back to my socialist stuff here. This is from Alison Schroger at Bloomberg posted this. Financial nihilism is generational. And it's saying that more young Americans say they feel behind financial and believe speculative investments will help them reach their goals. Now, it says 80% of Gen Z feels this way and 75% of millennials. I understand the zeitgeist behind these kind of things. But these, I think if you look at the difference between people online and people in the real world, it's never been starker.

Because the whole thing that... Preach. People think that this financial nihilism exists. And the only way you can do it is by speculating on crypto and prediction markets. And what percentage of the population is that really? It's people online who talk about it. If you go in the real world, most people are happy. Most people are doing fine.

When you talk to regular people, they're not like dread. I don't think most people are happy. I want to go that far. But I would say most people aren't miserable. Yeah, most people you interact with on a regular basis, when you go to your kids games and you go to the school events and when you go out to dinner at restaurants, do you see people who are moping and unhappy? No, most of the time you see people smiling and having fun and laughing. And I think this idea that everyone is miserable and everyone wants to just speculate because their life is horrible, that's supremely 100% online people and that's it. The real world is not like that.

I could not agree more. Okay. So yes, carnal, like more than a kernel of truth as to why people are, are doing this, and there is a segment of the population that's doing this, obviously. It's not all nonsense. But this idea that it's like an epidemic. I think the number is something like 2 to 4% of people who gamble on sports become totally addicted and it ruins their life.

That's a way higher number than it should be. And it's not everyone. And 2 to 4% of people that are doing it, unfortunately, is probably hundreds of thousands of people whose lives are ruined, whose family's lives are ruined. So it's fucking tragic, obviously. but let's not conflate that with the idea that everybody is like that.

All right, so you started out with a recession stuff. I use Claude again, and I said, hey, so the National Bureau of Economic Research, they're the ones who say it's a recession. And usually they tell us like six months later. They have to wait for confirmation.

They have these six different indicators they look at to determine, are we in a recession or not? And they have to look at the weight of the evidence, right? They look at payrolls and personal income and consumption and industrial production and households. employment, and then manufacturing

and trade sales. And I did this. I said, Claude, make me a dashboard of this. And they show, is it weakening? Is it positive? Is it slowing? So right now, it basically says elevated watchfulness. That's what Claude tells me. My little French buddy, Claude.

This is certainly the, I'd say, like, the worst state the economy has been going into one of these conflicts. Is that fair to say? Yeah. I think that's where That's why. I think that's why people are worried.

The economy is is flat. Flat to weak. Yes. I think that's, if you look at this data, you'd go, yeah, it's flat. It's not doing great.

It's not doing horrible. It's just, eh, it's okay. Yeah. Speaking of Claude, how do you feel, we haven't spoken about this, how do you feel about the A24 remake of Bloodsport?

Oh, really? I don't know, man. Can they find a guy with a chest as big as him I could make a dance like that. What was a guy's name? Chunley or something? The bad guy?

What's Chumley's name in real life? That guy was terrifying. I had to introduce my son to Van Dam the other day because he's watching Expendables 3. And he goes, wait, who's this guy? The new bad guy is Van Dam. I said, we'll have to get through his catalog too, I guess. I love Van Dam.

George will love sudden death. Yeah, you're right. He will like that one. So good. He knows all these guys now Because every single cheesy action star is in Expendables at some point So for the younger audience

John Claude Van Dam was this really handsome Amazing kickboxer Martial artist I suppose He's not a kickboxer The kind of guy who would never be in movies today Because there'd be too much unintentional comedy Yeah it was just the movies are hilarious He's an artifact of the 90s

Yeah So in sudden death There's a bomb in a hockey store stadium. Is it Pittsburgh? Is he a penguin? I can't remember. And he becomes the goalie. I saw that in the theater with a friend and we were just like, I don't know. And no, no, no. In the 90s, you did not question it. At least I, I mean, I was too young to question it. I probably thought that could happen. He made it. He made, he made a save because he was like, yeah, it was so good. The 90s were a simpler time, much simpler time. A lot of self-awareness back then.

All right, Torson Slok, no signs of AI replacing offshore workers. So they're looking at this chart super blurry. But he said, we are monitoring the unemployment rate in the Philippines and India for any signs that AI is reducing the need for outsourced workers in corporate America. So far, there are no signs of AI replacing offshore workers. So I feel like my AI thing is inequality. Your AI thing is labor replacement, right? We both have our sort of like, dumerism.

We're dabbling in doomerism for AI. At what year would you have to say, okay, I was wrong. about this. Like, what, what year were the unemployment would have to spike enough to, to be like, okay, fine, maybe this isn't going to happen? Would it be like 2028, 2030? Like, at one point, if the, if the unemployment was still like five or six percent, would you go, okay, AI is just not having tier of impact like I thought it would. That's a good question. I would love to know what the end date is. Like, end of this decade, if we haven't had a huge spike in unemployment in productivity, like, then maybe it's just not going to happen. I don't even think you need to

go that far. I would say, if, if, if, if by the, if, if by the end of next year, the labor market looks similar as it does today, then, yeah, we should be okay. Right. Because, again, we're still not seeing mass layoffs. We're not seeing, it's just people have kind of stopped hiring. But it's, but it's hard because it's never just one thing, because what if there's a recession? Are we going to blame AI for that? I do think the recession will be the thing that, like, do people get hired back?

That's when you'll really know. Because in a recession, people don't, they, the companies don't mindling. They'll lay off. They don't care. Will they hire people back? That'll be the tell. Check this out. So I mentioned Redpoint earlier.

The Lincoln bio, what do we call it? Lincoln Show Notes, if you want to see this report. They have a chart showing, so it's a 2026 market update. They go deep into the software and venture and what's going on and all that sort of stuff, comparing public markets to private markets and valuations and all that good stuff. All right. So I thought this chart was fascinating. they're showing the top 20 largest VC deals as a percentage of total enterprise software

funding. And it was 8, 6, and 7 percent in 2020 through 2022. That it spiked to 23 percent to 2023, 31 percent to 24, and 44 percent of 2020, 2025. And OpenAI and Anthropic and XAI are sucking up all of the funding. So just like the public markets, private markets are extremely. be concentrated. Yeah.

Everything is, it's concentration all the way down. Right? That's right, Ben. That is interesting. I also, I saw a chart from Balchunas. I didn't put in the show notes about people complaining about how concentrated the

U.S. stock market is. And then he showed it compared to the rest of the world. If you look at South Korea, which has been an extremely volatile market lately, huge run up. And now it's, I think it's down 20% now.

Two stocks make up like 45% of the index. It's way more concentrated elsewhere. I think Japan is really the only one that's more diversified than us. All right. Mike Duda said this tweet. Let's talk about crypto. Total crypto market cap is flat over the past five years despite significant inflation from existing protocols

and plenty of new protocol launches. You don't need to look particularly far beyond this chart to understand why crypto sentiment isn't great right now. So this is going from another peak, obviously, a little bit. But still, this is kind of crazy. I guess all the VC dollars that poured into crypto, all the different protocols, all the different layers, it is pretty surprising at this point that more hasn't come out of it.

Besides Bitcoin essentially being... Well, stable coins is a huge, huge industry. I would say also one of the other problems with crypto is that I'm doing, this is not my world, but I'm just assuming that a lot of the talent is gone and is now in doing coolest shit in AI, probably not going back. That was the thing where it was like everyone is going to work in crypto now. This is the new cool thing. Obviously, AI is probably that.

No, I tend to agree. So what's going to be the thing? Are we ever going to get the thing for crypto? Is it just stable coins? That's it? I think if that's the outcome, most people in crypto would call it a failure. From what they laid out of the beginning of this, I think if stable coins are the thing, that would be looked at as like, we didn't do what we set out to do.

Is that fair? I would agree. But it's still a $2 trillion asset class. Yeah, that was effectively created out from thin air. Yeah. Mark a check. S&P is up 1.5%. The NASDAQ is finally bouncing.

NASDAQ is up 1.7%. I don't know if there's news or not, but, uh, all right. The news was last night. What happened? Basically, Trump said, like, even if we don't take back the Strait of Haramu's, I'm willing to end the war. He's ready to call it. Like, all right.

So I said what happened. Last night, actually, in any other day, Ben, I would have known what happened. but guess what? I finally blocked Twitter on my phone. Okay. I do wonder about this. I got this thing called Brick,

and I installed it yesterday. What does it do? And so I blocked Twitter on my phone. I can't go on Twitter. I do think about that like... Because of Twitter, I see all these headlines, I see the stories,

and there's all these stories people are talking about. And I often wonder, like, there's obviously people who aren't on it who never have any idea of these things are happening. Because most of the stuff like this reported on Twitter, like it rarely jumps into actual news lexicon or like the big,

you know, sometimes Twitter moves the news. But all the stories that people pay attention all the time, that's just online people paying attention to them. So I mean, it's on my computer, so I'm still here. But the reason why I did it,

I feel like most of the time that I'm on, that I'm on Twitter on my phone is when I'm home with my kids. That's not a good feeling. So I don't need to be on Twitter and laying in bed with them. Sure. Obviously. All right. Let's keep moving.

All right. Torsten Slack had the housing update. And he shows the average monthly mortgage payment on a new 30-year mortgage. Okay. And it goes back to January 2000. And this thing is remarkably stable from January 2000 to January 2020. Obviously, housing prices crashed. Mortgage rates came down.

But it's kind of crazy that the price, the price, monthly mortgage payment wasn't that much higher in January of 2020 than it was in January of 2000. I think this period they're going to look back on and go, that was a historical anomaly. That will never happen again. So this is also obviously, obviously a huge part of why people are pissed off. So we mentioned 20 minutes ago that a lot of it is social media and true. Yes, social media is amplifying it.

But the spike in inflation that we're still living with, the, the, the, the, the, the unaffordability of home prices has nothing to do with social media and everything to do with, this just genuinely sucks. I have a movie idea. I'm going to pitch you. Okay. You want to now? Yeah, right now.

So I think there's two premises and movies that always work for me. Body swap and time travel. Those two premises always work. So here's what I'm going to do, okay? Movie producers, feel free to call me. I'll help you with a script. Hold on that. The last body swap movie on Netflix was awesome.

Which one is that? The other one that you, me and you. you watch to get where they sit in a circle and swap bodies. Yes. Body swap Netflix. That was called It's What's Inside. Yes. You gave me that. That was awesome.

That was a very good movie. I watched it and then I made my wife watch it with me. I like that one too. That's a very good movie. So here's what I want to do. My Body Swap movie is going to be a baby boomer. Okay. Has to be a young person now with housing costs where they are.

And a young personnel, so a Gen Z person has to go back to 1980. Okay? When housing costs were way lower, But there's no technology, nothing to do. Send, send Ramp capital back. So Ramp loves to hate on the boomers. It's going to be a person who's a boomer swaps to a young person today to see what it's like. And a young person today has to be a young person back in 1980 when housing prices were lower,

but there's a lot less to do. There's a lot less technology. So that's my body swap movie. All right. So if Ramp goes back to 1980, immediately he does the Jack from Lost. We need to go back. Yeah. So there's got to be.

Nobody wants to go back. Social media. Yeah, come on. Nobody wants to go backwards. That's a good premise. All right. So last week, we were talking about people potentially regretting buying a house. Yes.

And speaking of socialism and housing, there was a line in the book The Prize, which I finished, which was a, that was a long-ass book. Good listen. It was the history of oil, which is obviously the history of economics and policy and the world. And it was, that was a great book. So there was a line in there from this guy, Bill Leavitt, who started Levitown, one of the first suburbs on Long Island. And he said, no man who owns his house and a lot can be a communist. He has too much to do. We can use more Levittowns in this country.

So I thought that was a nice segue into this email that we got. In June 2024. So this is a person who's like, yeah, guys, man, buying a house. In June 2024, we closed on a three-bed, two-bath ranch. in Long Island. You may recall I reached out about two years. Okay. Oh, this is the guy who reached out about how his friends became competitors.

Remember that? Oh, yeah. Like buying a house? Yeah. So he said, while my wife and I don't have full-blown buyers or more, holy shit is this home a money pit. All right. So here's how it's gone so far.

June 2024, he closed on the house. June in July, new water heater. $2,500. bucks. We knew it was old, but didn't realize the prior owners were living with lucwarm water. By the way, I'm living through that. Not great. I went out of hot water.

Like, not a lot of water. Wait, isn't that any, can you, isn't that any inspector? The inspector missed that? Oh. I'd go back to the inspector and say, hey, I want a refund. You missed this? Isn't that one of the things they're supposed to inspect? Love it, Ben.

Thank you. Good idea. All right, August 2024. One week after our daughter was born, rain coming through. the ceiling, new roof, 12K. January 25, basement renovation. All right, self-inflicted, he said. Fair enough.

June 2025, two AC units died. And it would have been 6K to replace all of them, so we want central air, which is that was the best decision they made. 14 grand. December 2020-25, new dining room table and couch. I'm like adding up these things in my head. Yeah, that's a choice, but nevertheless,

like, yeah, you know, table on the couch. April 2026, winter destroyed our old front porch, bricks falling off beyond patching 10K, not including the landscape and we'll need now. So and this, you know, this is like, this happens. This is what, this is what it's, this is what owning houses. It is. This is a particularly shitty experience, but so, yeah, I mean, needless to say, anytime, oh, our parents bought a house for $200,000 and then 30 years later, it's like, hey, buddy,

first of all, that's, that's, that's, it's 2.4% compounding over 30 years, you know, compound interest. But what about taxes? What about all this stuff? Like, don't tell me that a residential home is, your primary home is not an investment. So my parents bought their home. My parents have lived in the same home since 1991. Still live there.

And the house is probably built in like the 1970s. And they've spent more on renovations, I'm sure, than they paid for the house. Of course. Between new siding, new deck, new hot tub, new. Probably two times over. New floor, yeah, exactly. New windows. They replaced the whole house, essentially.

Are you a hot type guy? I think we've done this on the show. I do like how my wife is been pushing. My parents have had them for years. My mom goes in it every single day. She's home. She's in a hospital, at least once a day. She brings a book and a beer and she goes in it.

That's her thing. Every day she relaxes in a hot tub. A book at a beer. I love it. Yeah. Good for a hot tub. Yes. My wife has been pushing for one for a while.

Who's not a hot tub person? Guess what? I would much rather have a hot tub than a cold tub. All right. So when you come here, we're going to go to Chris's house. We're going to Schffitz and we're going to sauna. And we're going to, we're going to, Cold plunge. Although, I don't want a cold plunge. I'm not for me.

No. How about this? I prefer a hot tub to a sauna. I like both. Okay. Yeah, I don't mind, I don't mind. But yeah, cold plunge, you're not going to pay me to do that. Okay, let's talk private markets a little bit. This is from the Blue Al CEO. Or Blue Al something. There was a big story in Bloomberg about this. The industry could have done a better job explaining these dynamics in terms of illiquidity, how the hard to get out. between us and the advisors who sell our products, I don't think we made it clear enough. I can't believe they said this out loud. I don't know who has a worst PR team,

people in private credit or AI people. Because they say a lot of stuff that they probably shouldn't be saying out loud. That's the whole thing. You have to talk to your clients about what illiquidity risk means. How hard it is to get your money out. That's the number one thing with these products.

Hotel California. It is. Do you want to get into all this other stuff? about like what stops these redemptions and I don't know if that I don't know if there's anything new to say on private credit at this point. So yeah, I guess just there's so much to say, but I do want to say this. One of the one of the problems that is not discussed enough is if you could get your money out. Now, I don't think anybody's actually doing this. So maybe this is sort of hypothetical. But if you could take your money out of private credit out of one of these

intervals at NAV, right, which is basically at an ultimate high, if you can get a dollar out for a dollar and then you could turn around and buy a publicly traded, BDC that's trading at a 25% discount, why wouldn't you do that? Right. I'm sure that people are doing that. That's what Matt Levine said. Like, what if the underlying assets are really worth 80 cents, not 100, but you have to pay out NAV?

So you're getting more money than you probably should right now based on the marks? So what stops this paradoxically, what stops us is if these private funds, the private BDCs and the Interval Funds, if they say, all right, you got us, we're going to mark it down by 15%. Then maybe investors say, ah, you know what? We'll just ride it out. Problem is, I don't think they can afford to mark these things down because of the leverage requirements.

Because then they're even more upside down on the leverage. And then do banks start pulling some of these financings? So that's a bit beyond my pay grade, but it's not that simple. So their hope right now is just that these redemptions slow down. They will slow down. But it might take six quarters. But I think we're learning that there's way more hot money in this space than that people thought. One of the big, big problems here is that the media is all over this.

And it's not their fault. I mean, some of it is. But it's not like this is their job to report on this stuff. And the real problem is in terms of like slow redemptions is that guess what? If 20, 25% of these portfolies are in names that are that are going to be impacted by AI. And these companies will be impacted by AI and there's more bankruptcies and there's more reporting on the bankruptcies. There will be more redemptions. And I don't know what slows that down.

So this could be this could be a minute. Now you would think at you would think at some point after. I don't know, 10 quarters of 5% redemptions, if you were going to sell, if you were going to sell, you probably would have at that point. But I don't know, man, this is going to be, this is not going away overnight. No, it's not the thing like the public markets where if something comes back, you go, okay, if I'm not going to sell it now. Like, this, these are long held assets.

It's not like this all of a sudden rectifies itself quickly. I can't believe that they're still thinking about that they're still rubber stamping and greenlighting the putting alternative assets to 4NK plans. This is going to be a disaster. So great timing here from the U.S. Department of Labor. They released this yesterday. U.S. Department of Labor proposes a landmark rule to democratize access to alternative investments in 401K plans. It's just wonderful.

Great chef's kiss. Nailed it. If advisors and their clients aren't able to stick with this stuff, people in 401K plans, this is going to be an utter disaster. The only place for these to go is a target date fund. That I kind of agree with. Yeah, that makes the most sense to me. And I would trust, I would trust Vanguard to steward that process. If they want to, if, if they want to have an option, but it's got to be an option.

It's got to be opt in. It can't be forced into these target date funds. It's got to be like a different share class or not whatever, a different, like a different fund that people opt into. Yeah, I don't know. I just, there's no way that's going to work. All right. So, so Ben, I teased earlier about about you discovering coffee after Claude. you you got into

Seltzer How did this even happen? Like how does one get into Seltzer at the ripe young age of 40, however old you are? I never was big in it. I think my wife probably had more of a pop addiction than I did for like Diet Pepsi's.

And she said, you know, I have to stop drinking so much so I'm going to start drinking these seltzer and I started drinking too and Fonzom I like. The Whole Foods brand one is really good. I like simple sparkling water. That's it. I don't like the flavors.

Salter. Yeah. I don't like the flavors very much. Although, let me ask you a question. So I call it Seltzer, but I think some parts of the country call it club soda. What do I? I don't, I'm trying to think of what I call it. It says sparkling water on the case.

That's what I call it, I guess. Sparkling water? Yeah, that works. Sure. All the same. Sounds cuter, right? Oh, this made me laugh. So subject line, the cable guy shit in my toilet.

That's pretty good. I had to laugh this morning when listened to the most recent episode where Michael brought up the repair guy, I should get his bag again. The cable guy was at my house. two weeks ago to repair spotty internet service. He was in a completely different part of the house and proceeded to shut up my bathroom without asking. I would have had no idea, but he decides to tell me on his way out.

I'm curious if he was flexing me or just being polite. I live in Milwaukee, so I'm guessing it was the Midwest polite thing to do. Sneaking one in, that's a move. So when he said, I would have had no idea, but he decided to tell me, I emailed him back. I said, what did he say? something of the longer of the eyes up, hey man, I had to use your bathroom.

How to colonoscopy yesterday? And my stomach hasn't been the suns. That's that. And then the emailer, chef kissed this and said, I guess it could have been worse. At least he did an upper deck me. Wow.

That's basically, I totally blew out your toilet. You should have it clean. I can call it asking me. All right, before we get the recommendations, my wife used my own advice against me. So kids got really into Michigan basketball this year. They're one of the best teams.

And they were playing their regional matchup this weekend in Chicago, not that far from us, right? Less than a three-hour drive. They won their game on Friday. They played again on Sunday after my wife said, let's surprise the kids with tickets to the Michigan game. They have Michigan Tennessee, Michigan's favorite. Let's go watch the game.

And I was like, No, it's kind of expensive. And you have to drive down there. You have to park, drive back. You have to all these crowds of people. You're more of a live sporting person than me. You go to way more live sporting events than I do. My thing is like movies, the experience at home is way better watching sporting events and watching it live.

That's not true. It's true. It's true for football. It's 100% true to be watching at home as a better experience. That's true. That year at basketball is different. And so we got pretty good seats. My wife said, listen, our kids are only going to be young once.

Isn't this kind of stuff we want to spend our money on? I said, you know what? She got me. She used my own stuff against me. We got tickets like the day before. Surprise the kids that night. He said, hey, lay out all your Michigan gear. And drove down to Chicago, went to the United Center.

It was awesome. It was so much fun. The energy in the building for like a March Madness game was spectacular. Michigan destroyed them. They looked awesome. We had these really drunk, obnoxious Tennessee fans sitting behind us who were just going crazy. They were using like karate kid lines like, like put them in a body bag, Johnny, like with the southern accent, which was actually kind of funny.

But so my kids, like my daughter Katie's the cutest little thing. She has Michigan jersey on, Michigan hat. She's got Michigan socks pulled all the way up. She's got, they said they wanted to make signs. We're like, no, you can't make big poster boards because the people behind you, they can't see. So they made little signs like with construction paper. And they made little signs. My son George has his foam finger, you know, and they both got on the Jumbotron with their signs.

Oh, no way. Michigan's best player is Yaxel Lendabor. He's from Puerto Rico. and they call him Dominican LeBron. And my daughter made a sign that said, go Dominican LeBron. And he put it up on the jumbotron. And her whole face turns red.

And then George got on later. And so we say it afterwards for them to cutting the nets down and stuff. And man, it was fun. It was just an awesome, awesome experience. So my wife is right. I was wrong. And you're right. Basketball is better in person.

Yeah. Anyway, fun time. Now we're on to the Final Four, which we're going to spring break because people keep asking me, like, hey, you're going to the Indianapolis one. The Final Four is in Indianapolis one. And I probably would have thought about it if not for the fact that we're on spring break. But also, I don't want to go to a final four game and see if they potentially lose because

them in Arizona is like the two best teams. It's a toss up. Yeah. I'm so unplod. I don't watch college sports. Who are they? Michigan's playing. Who you said, Arizona?

Michigan, Arizona. They're the two best teams by far. And it's going to be a, it's a toss up. I think the spreads like a point, point a half. It's they're both played the best all year. they had the best records, essentially. They're the best two teams, and they're playing in the first game to final four, or the second game in the final four.

And it's going to be an epic game. I can't wait. It's kind of game where, like, if they lose, it's like, okay, it's a really good team. I'm not going to be upset. My sports consumption has crashed, and I think it's a permanent bare market. And I'm not upset about it. It just is. It is life, right?

We're getting older. Yeah, I've been like that, too. So I stopped completely listening to. So from 2015 until, like I said, listen, you grow up. I stopped listening to Howard Stern. It was like, it was like a massive part of my life, like a massive, massive, massive part of my life. Like, part of my identity was listening to Howard. I stopped listening to Simmons and Rucillo, like, because I'll listen to it now is audiobooks.

I don't have time for anything else. So between that and. Yeah, listening to sports podcasts. Just around big events, I listened to him now. So that was, that was how I was plugged into a lot of the NBA. And like, I'm even like, I've, like, missed Nick, Nick's games, which I never, ever ever did. But this is, I've gotten more into it now. I had a lull, too.

Big bear market. Now that my kids are into it again, now I'm watching more. Like I gave up in college basketball essentially. But my kids get back into it because we've got a good team. So I watched them anyway. Okay, speaking of experiences. Never thought it would happen to me, Ben. It's crazy, right? Stuff happens.

So I took George to see Project Hill Mary. You said take him. It was unbelievable. Just the kind of movie that makes you realize why you love going to movies. Smile on your face all the whole time. People keep saying it's 20 minutes too long. They're probably right, but I didn't really care. that's an 8.5 movie.

It's just, it should have been a summer blockbuster probably, I don't know if it matters. Gosling has the movie star belt. I think there's, there's only a few people

who could have handled that role. It's a Tom Hanks, Matt Damon, Tom Cruise kind of thing. Like, that not only is a performance good, but it's, that's a movie star person

that does it, you know? And I think he has that belt right now over anyone and it's not even close. Question for you. So you, there's this whole idea

in shittification going on that, like things are getting worse, quality is worse. And I go in a movie theater and I think this is crazy. When I grew up, I had a little fold-down seat.

It was so uncomfortable. My movie theater is stunk growing up. Now you can recline, lay back. You have a heater on your seat, you know, huge recliner. And I'm thinking about this, but the people next me in the whole row it's all these young teenagers.

They take their shoes off at the movie theater. That's straight to jail, right? Are you kidding me? Yeah, multiple kids. Shoes off underneath their seat, socks, and I'm thinking, new, no. We're not getting that comfortable.

Teenagers, high school, probably. And my son absolutely loved it. I took Kobe to see it. And I cried, not like, not like, I mean, I had two little tears. I got emotional. Not even over something in the movie, but just seeing the movie with him. So like your kids, he's nine years old. And I just, I got emotional making like a lifelong experience from him.

Like, he will 100% remember seeing that the way that we do, remember seeing movies when were kids. Yep. It was, it was, well, it was better the second time for mix his

out with him, but I just, it's just different when you see a movie a second time. First, first second movie that I've seen in

the theater, and I can't even tell you how long. Probably since I was a child. My wife's gonna make you go back with her. His, there was many points

for my son's jaw was open, like, like he was just blown away, but he loved it so much. And how funny was it? Yes, the whole rocky thing. He loved the alien,

for sure. It was such a great movie. It made me very, very, very happy. did it, like from the book. And I like, I had to go, but I'm reading the book again because I've never done it with piece of fiction because I want to get more of the, because the movie didn't go into the science as much as the book, obviously. I thought that was one of the cool parts of the

book, but yeah, very well done. So $54 million in its second weekend. That's a bigger second weekend than Sinners Oppenheimer and Dunn. But think about, and Dune too. Think about how massive, massive Oppenheimer was. So this movie is getting tons of word of mouth, obviously. bigger than Oppenheimer. Holy shit. It was so phenomenal. It just made me happy. Yeah, well done.

Oh, based on your lead. I watched Anaconda with Kobe. He loved it. It was terrible. Really bad movie, but it made me laugh like four or five times. Like actual, actual laugh.

It was kind of, there was some really, it was a really dumb movie. It was way too meta, like with the original Anaconda. But George's like, Ice Cube at the end? Yes.

Ridiculous. One more wreck from me. I listened to the Amy Pol Amy Poller's got a new podcast. I can't remember what it's called. She's been out for a year now. So she interviewed Steve Correll. I don't think I've ever heard Corell on a podcast before.

But listening to them, having been a huge watcher of the office and Parks and Rec, for both of those shows, I was out immediately. Like, I don't want to watch Office. That looks dumb. And I got into it. And I'm like, oh, Parks and Rec is just a, it's a female version of Michael from the office. Like, that looks dumb. But Parks, like both of those shows, I love both of them.

And hearing them talk about the shows together was awesome. It was really well done. He was on Howard years ago. He is just a regular, regular guy. That's what it's, it does seem like that he is kind of down to earth. Yes. What you see is what you get kind of deal. Okay.

So watch the Madison with your wife. All right. This is a borderline table. It's a table pounder. All right. I'm Michelle Pfeiffer fan. I'll watch it. She looks incredible.

And who, wait, who's the lead in it with her? So here's the plot. Kurt Russell, right? It's a six episode show. Okay. I can handle that. And it is not anything like Taylor Sheridan's other stuff. So the premise is, and I can't not spoil it.

But can I reveal a spoiler if it happens 10 minutes into the show? Or should I just not do it? Hit me with it. Okay. So this is a spoiler for the Madison. The spoiler happens in the first 10 minutes. We got a few emails about spoiling that there was an alien in Project Hemer, even though that was in the trailer.

So I'm sensitive to split this too. Okay. So fast forward if you want. So Kurt Russell and Michelle Pfeiffer are a very wealthy couple that live in Manhattan. They have two stuck up spoiled daughters that are grownups, 27 and 36. The 36 year old has two kids and divorced. And the 26 year old is married. Kurt Russell goes to a hunting cabin in Montana with his brother.

He's been going there his whole life, his whole adult life. life and they go fly fishing and they just they do what dudes and bros do and he's begged his wife and his family come out there they won't come out there there there's no there's no indoor plumbing so in the first 10 minutes of the episode of the show maybe his first 20 minutes he goes out there fly fishing and he dies in a plane crash and so the rest of the show is about Michelle Pfeiffer and the family going out there and just experiencing it and so I watched the first episode Robin comes in she's like what what is this oh Michelle Pfeiffer on so she uh she uh So she took ahead and she went ahead without me and then I caught up.

But probably not a show that I would have liked that you would think I would have liked. But it was just awesome. It was just a good show. Okay. Talk me into it. Really enjoyed it. All right. And that is about that.

So mark a check. All right. Holding gain so far. But 4 o'clock is a long way. Why? You got to start somewhere around. All right. We get a 2% update maybe, but not a 2% down day.

Yeah. All right. We'll say. Anyhow. Thank you, as always, for all. of the emails, Animal Spirits at the Compound News.com. Remember, if you want to see us in San Francisco, info at writholtswealth.com. We'll see you next time.